Korean Air Lines Disaster of Sept. 1, 1983, In re

Citation829 F.2d 1171,265 U.S.App.D.C. 39
Parties, 56 USLW 2195 In re KOREAN AIR LINES DISASTER OF
Decision Date01 September 1983
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Appeal from the United States District Court for the District of Columbia (Misc. No. 83-00345).

Milton G. Sincoff, New York City, with whom Donald W. Madole, Washington, D.C., and Steven R. Pounian, New York City, were on the brief for appellant.

George N. Tompkins, Jr., New York City, for appellee.

Before RUTH B. GINSBURG, WILLIAMS and D.H. GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge RUTH B. GINSBURG.

Concurring opinion filed by Circuit Judge D.H. GINSBURG, in which Circuit Judge WILLIAMS joins.

RUTH BADER GINSBURG, Circuit Judge:

This case arises out of an air disaster and raises turbulent federal questions. On September 1, 1983, Korean Air Lines (KAL) Flight 007, a commercial craft departing from Kennedy Airport in New York and bound for Seoul, South Korea, was destroyed over the Sea of Japan by Soviet Union military aircraft. Wrongful death actions were filed against KAL in several federal district courts; the Judicial Panel on Multidistrict Litigation transferred these actions to the District Court for the District of Columbia for pretrial proceedings pursuant to 28 U.S.C. Sec. 1407 ("[C]ivil actions involving one or more common questions of fact ... pending in different districts ... may be transferred to any district for coordinated or consolidated pretrial proceedings.").

The nub of the controversy relates to the per passenger damage limitation of the Warsaw Convention, 1 raised to $75,000 by an accord among airlines known as the Montreal Agreement. 2 By motion for partial summary judgment, plaintiffs sought a declaration "that [KAL] is liable without fault for compensatory damages without any limitation of $75,000." Joint Appendix (J.A.) at 26. Plaintiffs grounded this motion on the inadequate type size of the liability limitation notice printed on KAL passenger tickets. The notice appeared in 8 point type; the Montreal Agreement specifies 10 point type. Denying plaintiffs' motion, the district court, on July 25, 1985, held that KAL could avail itself of the $75,000 per passenger limitation. In re Korean Air Lines Disaster of September 1, 1983, 664 F.Supp. 1463, 19 Av.L.Rep. (CCH) 17,584 (D.D.C.1985). In so ruling, the district court considered and rejected contrary Second Circuit precedent: In re Air Crash Disaster at Warsaw, Poland, on March 14, 1980, 705 F.2d 85 (2d Cir.), cert. denied, 464 U.S. 845, 104 S.Ct. 147, 78 L.Ed.2d 138 (1983).

On September 24, 1985, the district court certified for interlocutory appeal under 28 U.S.C. Sec. 1292(b) the question whether KAL "is entitled to avail itself of the limitation of damages provided by the Warsaw Convention and Montreal Agreement despite its defective tickets." We ruled that the requirements of section 1292(b) were met and that "wise exercise of our discretion dictates that the appeal be allowed." D.C.Cir. Order filed April 8, 1986.

On January 30, 1987, after argument of the appeal, we remanded the record for clarification of the scope of the district court's order denying plaintiffs' partial summary judgment motion. Specifically we observed that the cases consolidated in this appeal

can be grouped into three categories on the basis of the fora in which they were originally filed and to which they are to be remanded at or before the conclusion of pretrial proceedings, unless the actions are earlier terminated: (a) the Southern and Eastern Districts of New York; (b) the Eastern District of Michigan and the District of Massachusetts; and (c) the District of Columbia. The district judge, in his order denying plaintiffs' motion for partial summary judgment, did not expressly consider the contention that, by analogy to the principle set forth in Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964), he was bound by Second Circuit precedent in resolving the claims of plaintiffs in the first category enumerated above.

The extent of a transferee court's authority under 28 U.S.C. Sec. 1407 independently to resolve issues of [federal] law already passed upon by the federal court of appeals for the circuit in which the transferor forum is located is apparently a question of first impression, and our consideration of this issue is hampered by uncertainty as to which plaintiffs were covered by the district court's July 1985 order.

D.C.Cir. Order filed January 30, 1987.

By Memorandum dated May 7, 1987, 664 F.Supp. 1488, the district court held that its July 25, 1985 decision denying plaintiffs' partial summary judgment motion applies to all three categories of cases described in this court's January 30, 1987 remand-for-clarification order. We now affirm the district court's dispositions. On the Warsaw Convention/Montreal Agreement $75,000 per passenger damage limitation issue, we adopt as our opinion the comprehensive July 25, 1985 decision of the district court, reported at 664 F.Supp. 1463. We set out below our reasons for concluding that the district court properly adhered to its own interpretation of the Warsaw Convention/Montreal Agreement in all actions, including those transferred from district courts within the Second Circuit.

_____

The Supreme Court, in Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964), addressed and resolved this question: when a defendant in a diversity action moves for a venue transfer under 28 U.S.C. Sec. 1404(a), 3 which state's law applies post-transfer? The state law that would have applied in the transferor court adheres to the case, the Supreme Court held; in the Court's words, "with respect to state law," the venue change will accomplish "but a change of courtrooms." Van Dusen, 376 U.S. at 639, 84 S.Ct. at 821. 4

The Van Dusen interpretation of 28 U.S.C. Sec. 1404(a), as the latter applies in diversity actions, rests on principles advanced in Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and cases in the Erie line. Van Dusen, 376 U.S. at 637-40, 84 S.Ct. at 819-21; see particularly Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) (on issues of state law arising in diversity cases, federal courts must apply choice-of-law rules of states in which they sit). Justice Goldberg explained for the Court in Van Dusen:

[O]ur interpretation [of Sec. 1404(a) ] ... is supported by the policy underlying Erie [.] ... [W]e should ensure that the "accident" of federal diversity jurisdiction does not enable a party to utilize a transfer to achieve a result in federal court which could not have been achieved in the courts of the State where the action was filed.... What Erie and the cases following it have sought was an identity or uniformity between federal and state courts; and the fact that in most instances this could be achieved by directing federal courts to apply the laws of the States "in which they sit" should not obscure that, in applying the same reasoning to Sec. 1404(a), the critical identity to be maintained is between the federal district court which decides the case and the courts of the State in which the action was filed.

Van Dusen, 376 U.S. at 637-39, 84 S.Ct. at 820 (footnotes omitted).

Defendants in Van Dusen sought to transfer the case from the Eastern District of Pennsylvania to the District of Massachusetts. (Massachusetts, but not Pennsylvania, limited the damages plaintiffs could recover.) Were the transfer to be made, the Supreme Court ruled, though all further proceedings would take place in the Massachusetts district court, Pennsylvania law, not Massachusetts law, would furnish the governing state prescriptions.

The question before us is whether the Van Dusen rule--that the law applicable in the transferor forum attends the transfer--should apply to transferred federal claims. It is a question meriting attention from Higher Authority. Congress, it appears, has not focused on the issue, 5 nor has the Supreme Court addressed it. The Judicial Panel on Multidistrict Litigation assumed, on at least one occasion, that the Van Dusen rule would apply to transferred federal claims, see In re Plumbing Fixtures Litigation, 342 F.Supp. 756, 758 (J.P.M.D.L.1972), 6 but the Panel, from what we can glean, has given the matter only fleeting consideration. 7 Recognizing that the question is perplexing, particularly in the context of 28 U.S.C. Sec. 1407, a statute authorizing transfers only for pretrial purposes, we are persuaded by thoughtful commentary that "the transferee court [should] be free to decide a federal claim in the manner it views as correct without deferring to the interpretation of the transferor circuit." Marcus, Conflict Among Circuits and Transfers Within the Federal Judicial System, 93 YALE L.J. 677, 721 (1984); see also Steinman, Law of the Case: A Judicial Puzzle in Consolidated and Transferred Cases and in Multidistrict Litigation, 135 U.PA.L.REV. 595, 662-706 (1987).

As the district court stressed in response to our remand, the Erie policies served by the Van Dusen decision do not figure in the calculus when the law to be applied is federal, not state. Given the reality of conflict among the circuits on the proper interpretation of federal law, however, why deny to a plaintiff with a federal claim the "venue privilege" a diversity claimant enjoys? Plaintiffs in the Van Dusen situation could effectively pick Pennsylvania rather than Massachusetts law and retain the benefit of that choice after transfer. Why deny a similar right of selection and retention to plaintiffs who would fare better under the Second Circuit's interpretation of federal law than under the D.C.Circuit's interpretation?

The point has been cogently made that venue provisions are designed with geographical...

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