Pescatore v. Pan American World Airways, Inc.

• Decision Date: 09 September 1996
• Docket Number: No. 928,D,928
• Parties: 45 Fed. R. Evid. Serv. 624 Faith PESCATORE, as personal representative and administratrix of the Goods, Chattels and Credits of Michael C. Pescatore, deceased, Plaintiff-Appellee, v. PAN AMERICAN WORLD AIRWAYS, INC., Pan Am World Services, Inc., and Alert Management Systems, Inc., Defendants-Appellants. ocket 95-7637.
• Court: U.S. Court of Appeals — Second Circuit

Page 1

97 F.3d 1

45 Fed. R. Evid. Serv. 624

Faith PESCATORE, as personal representative and

administratrix of the Goods, Chattels and Credits

of Michael C. Pescatore, deceased, Plaintiff-Appellee, v. PAN AMERICAN WORLD AIRWAYS, INC., Pan Am World Services,

Inc., and Alert Management Systems, Inc.,

Defendants-Appellants.

No. 928, Docket 95-7637.

United States Court of Appeals, Second Circuit.

Argued March 4, 1996.

Decided Sept. 9, 1996.

David M. Schuller, New York City (Aaron J. Broder, Meryl I. Schwartz, Steven M. Nathan, Adam Polo, Bailey & Broder, New York City, on the brief), for Plaintiff-Appellee.

Richard M. Sharp, Washington, DC (Frederick C. Schafrick, Valerie E. Ross, J. Bradford Wiegmann, Shea & Gardner, Washington, DC, Keith D. Dunnigan, Bai, Pollock & Dunnigan, Bridgeport, CT, on the brief), for Defendants-Appellants.

Before MINER, JACOBS and CABRANES, Circuit Judges.

JACOBS, Circuit Judge:

On December 21, 1988, a bomb in a suitcase aboard Pan Am flight 103 exploded, causing the aircraft to crash at Lockerbie, Scotland. All 243 passengers and 16 crew members died. Many of the decedents' survivors brought wrongful death actions under Article 17 of the Warsaw Convention against Pan American World Airways and two affiliated corporations, Pan Am World Services and Alert Management Systems (collectively, "Pan Am"). See Convention for Unification of Certain Rules Relating to International The district court initially anticipated that the jury that had rendered the liability verdict would consecutively hear the damage cases arising from the Lockerbie disaster. However, after conducting three prolonged damages trials before the same jury, the district court granted Pan Am leave to appeal (i) the court's decision to permit recovery for loss of society and (ii) the liability verdict. We affirmed both the ruling on loss of society in two of the cases, vacated the loss of society ruling in one of the cases, and affirmed the liability verdict. In re Air Disaster at Lockerbie Scot., 37 F.3d 804, 829, 830 (2d Cir.1994) ("Lockerbie II "), cert. denied, --- U.S. ----, 115 S.Ct. 934, 130 L.Ed.2d 880 (1995). Familiarity with that opinion is assumed. Of critical importance to this appeal, we held that "damages in a Warsaw Convention case are governed by federal common law principles," and that the compensability of damages for loss of society and companionship is determined "by an examination of maritime law." Id. at 828.

                Transportation by Air, Oct. 12, 1929, 49 Stat. 3000, reprinted at 49 U.S.C. § 40105 note (hereinafter, the "Warsaw Convention").  These cases (including plaintiff Faith Pescatore's case) were consolidated in the Eastern District of New York. 1  Although recovery under the Warsaw Convention is generally limited to $75,000 per passenger, that limitation does not apply if death or injury occurs as a result of a carrier's "wilful misconduct."  Id. art. 25(1).  In a bifurcated, thirteen-week jury trial on the issue of liability, the plaintiffs succeeded in establishing that the deaths of the passengers and crew aboard Pan Am flight 103 were proximately caused by Pan Am's wilful misconduct
                

Faith Pescatore's case then proceeded to trial on the issue of damages. ² As we had instructed in Lockerbie II, compensability of damages at that trial was determined in accordance with federal maritime law. Pescatore sought damages for loss of society, loss of services and loss of financial contribution resulting from the death of her husband, Michael C. Pescatore, plus prejudgment interest. Pan Am appeals from a $19,059,040 judgment entered in favor of Pescatore after a twelve-day jury trial in the United States District Court for the Eastern District of New York (Platt, J.), and an order entered May 26, 1995, denying Pan Am's motion for a new trial.

Prior to oral argument in this appeal, the Supreme Court decided Zicherman v. Korean Air Lines Co., --- U.S. ----, 116 S.Ct. 629, 133 L.Ed.2d 596 (1996). Briefly stated, Zicherman holds that the Warsaw Convention leaves it to adjudicating courts to specify what harms are cognizable, and that the "particular law of the United States [that] provides the governing rule" with respect to damages is "the law that would govern in absence of the Warsaw Convention." Id. at ----, 116 S.Ct. at 636. The Court specifically disapproved of this Circuit's determination (in our opinion in Zicherman, 43 F.3d 18, 21-22 (2d Cir.1994)) that Warsaw Convention cases are uniformly governed by general maritime law, and instead held that the Warsaw Convention "leave[s] the specification of what harm is legally cognizable to the domestic law applicable under the forum's choice-of-law rules." Id. at ----, 116 S.Ct. at 637. In Zicherman, because the disaster occurred over the Sea of Japan, the damages issues were governed by the Death on the High Seas Act, 46 U.S.C. app. §§ 761-768 ("DOHSA").

In this case, the disaster occurred over Scotland. No federal statute governs the compensability of damages caused by air disasters that occur over foreign lands. The We agree that Zicherman embodies an intervening change in controlling law that requires us to alter the law of this case. ³ The normal federal disposition is for a federal court to apply the relevant state's law as the federal rule of decision absent a "significant conflict between some federal policy or interest and the use of state law." O'Melveny & Myers v. FDIC, 512 U.S. 79, ----, 114 S.Ct. 2048, 2055, 129 L.Ed.2d 67 (1994) (internal quotation marks and citation omitted). For reasons addressed in this opinion, no such conflict is asserted here. We therefore hold that the law that governs damages in this case must be determined in accordance with the choice of law rules of the forum jurisdiction. See Zicherman, --- U.S. at ----, 116 S.Ct. at 635. We further conclude that, under choice of law rules applied by New York and by the federal courts in federal question cases, the applicable body of substantive law governing damages is the law of Ohio (the plaintiff's domicile and residence), not federal maritime law.

question that we therefore must answer is which sovereign's law would govern the issue of the plaintiff's damages in such a case "in [the] absence of the Warsaw Convention." In re Air Disaster at Lockerbie, Scot., 928 F.2d 1267, 1282 (2d Cir.) ("Lockerbie I "), cert. denied, 502 U.S. 920, 112 S.Ct. 331, 116 L.Ed.2d 272 (1991), and Lockerbie II hold that federal common law--as set forth in federal maritime law--furnishes special rules governing damages. Pan Am argues that we must alter the law of the case because of the Supreme Court's holding in Zicherman that the Warsaw Convention does not "empower us to develop some common-law rule--under cover of general admiralty law or otherwise--that will supersede the normal federal disposition." Zicherman, --- U.S. at ----, 116 S.Ct. at 636 (emphasis added).

At trial, the plaintiff recovered damages for loss of society and loss of financial support. Ohio law permits recovery for such loss. Pan Am argues, however, that a new trial is required because Ohio permits the introduction of evidence of a plaintiff's plans to remarry, and because Pan Am was prohibited from introducing such evidence. Because we find no authority for Pan Am's argument that Ohio law requires the introduction of plans to remarry, we reject Pan Am's claim that a new trial is necessary. We agree, however, with Pan Am's contention that the district court abused its discretion in making and allowing reference to the liability jury's finding of wilful misconduct, but we hold that that error is insufficient to warrant a new trial. We reject Pan Am's argument that the jury awards of $5 million for loss of society and $9 million for loss of financial support are excessive under Ohio law, and therefore affirm both awards. Finally, we remand to the district court for a determination as to whether the plaintiff is entitled to prejudgment interest under Ohio law.

BACKGROUND

Michael C. Pescatore, a 33 year-old vice-president of British Petroleum Chemicals of America (a subsidiary of British Petroleum, or "BP") was killed in the Lockerbie disaster while en route to the United States from his post in London. Michael Pescatore had excelled in a succession of challenging managerial positions, and was being groomed, at the time of his death, for one of the very top positions at BP.

Plaintiff Faith Pescatore, his wife, was one of the plaintiffs who established Pan Am's liability for wilful misconduct. She sought damages from Pan Am for (i) loss of past and future financial contributions, (ii) loss of past and future services, (iii) loss of society, and (iv) prejudgment interest on the verdict.

Then-Chief Judge Platt made two significant rulings on issues common to all future damage trials. First, in an unpublished pre-trial order dated March 28, 1995, the district court denied Pan Am's motion in limine to exclude, among other things, reference at trial to the finding of wilful misconduct made by the liability jury. The district court reasoned that the damages "jury must be fully informed as to why damages are not limited to $75,000 [by the Warsaw Convention] in The damages issues were tried to a jury from April 3 to April 17, 1995. The plaintiff offered the testimony of several of Michael Pescatore's colleagues, including four senior officers of BP, to prove loss of past and future financial contributions. Each of these witnesses described the decedent's past career successes and his potential for future success. The plaintiff also offered the expert testimony of Dr. Edward Glaeser, a labor economist, who estimated the plaintiff's lost financial support at from $25.5 million to $73.8 million in 1988 dollars. Pan Am's own expert witness valued the loss of the decedent's financial support at approximately $2.398 million. The plaintiff testified as to loss of society and loss of services.

                this trial."   Second, in an order

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