Reed v. Wiser

Decision Date26 April 1977
Docket NumberD,No. 233,233
Citation555 F.2d 1079
PartiesRuth Ann REED, as Administratrix of the Estate of Dan William Reed, Deceased, and as parent, natural guardian, and best friend of Cynthia Ann Reed, Debora Lynn Reed and Julie Marie Reed, all infants, et al., Plaintiffs-Appellees, v. Forwood Cloud WISER, Jr. and Richard E. Neuman, Defendants-Appellants. ocket 76-7247.
CourtU.S. Court of Appeals — Second Circuit

John J. Martin, New York City, (Edward M. O'Brien, Bigham Englar Jones & Houston, New York City, of counsel), for defendants-appellants.

Melvin I. Friedman, New York City (Lee S. Kreindler, Milton G. Sincoff, Stanley J. Levy, James D. Veach, Kreindler & Kreindler, New York City, of counsel), for plaintiffs-appellees.

Speiser & Krause, P.C., New York City (Charles F. Krause, Joseph J. Pierini, New York City, of counsel), for amicus curiae Sotirios Karras, et al.

Before MANSFIELD, VAN GRAAFEILAND and MESKILL, Circuit Judges.

MANSFIELD, Circuit Judge:

This case, arising out of an aircraft disaster on the high seas, presents the novel and important question of whether airline employees are entitled to assert as a defense the liability limitations of the Warsaw Convention ("the Convention"), 1 as modified by the Montreal Agreement. 2 We hold that employees are entitled to do so, and reverse and remand with instructions to reinstate the defense.

On September 8, 1974, Trans World Airlines ("TWA") Flight 841 from Tel Aviv to New York via Athens and Rome crashed into the high seas some 50 nautical miles west of Cephalonia, Greece, killing all 79 passengers and 9 crew members on board. Under the Warsaw Convention, as modified by the Montreal Agreement, TWA would ordinarily be absolutely liable for the deaths of the 79 passengers, but its liability would be limited in amount to $75,000 per passenger unless plaintiffs could show willful misconduct. Instead of suing TWA, however, the administrators and executors in this case sued the President of the company and his Vice-President of Audit and Security in the United States District Court for the District of New Jersey, alleging that defendants were responsible for security on TWA flights and negligently failed to prevent the placing on board of a bomb which is alleged to have exploded and caused the disaster. Defendants denied negligence and also pleaded the liability limits of the Warsaw Convention as modified by the Montreal Agreement. On January 26, 1976, the Judicial Panel on Multidistrict Litigation transferred all federal court litigation arising out of the accident to Judge Frankel of the Southern District of New York. In re Air Crash in the Ionian Sea, 407 F.Supp. 238 (Jud.Pan.Mult.Lit.1976). Plaintiffs moved to strike the defense of limited liability and Judge Frankel granted their motion, certifying to this court under 28 U.S.C. § 1292(b) the question of whether these defendants are entitled to assert the Warsaw limits.

In a carefully considered opinion Judge Frankel, after finding the language of the Convention to be silent on the issue before him and gaining little light from its legislative history, pointed to several factors leading him to the conclusion that the Convention's liability limitations should not be extended to airline employees. In his view the deciding factors were the Convention's failure expressly to extend the limits to agents or employees even though agents were mentioned in some other respects, the fact that limits were no longer needed to protect air travel as an infant industry, the strong policy against stipulations by carriers restricting tort liability based on the negligence of their employees, the criticism voiced of the Convention's limitations by some quarters in the United States, the Supreme Court's refusal to extend similar liability limitation provisions of the Carriage of Goods by Sea Act, 46 U.S.C. § 1304(5), to stevedores or other agents, and the failure of the United States to ratify the so-called 1955 Hague Protocol, adopted by most of the Convention's signatories, which expressly extended the Convention's liability limits to a carrier's employees and agents acting within the scope of their employment. From this decision the TWA officer-defendants appeal.

DISCUSSION

The question of whether an airline employee sued for damages for personal injuries suffered in an international airplane accident may invoke the Convention's liability limitations is of great importance to international air disaster litigation and, so far as we know, is here raised for the first time at the federal appellate level. The few American trial court decisions on the issue have split. Compare Pierre v. Eastern Air Lines, Inc., 152 F.Supp. 486, 489 (D.N.J.1957) (employees not protected), with Chutter v. KLM Royal Dutch Airlines, 132 F. Supp. 611, 613 (S.D.N.Y.1955) (agents protected), and Wanderer v. Sabena, 1949 U.S. Aviation Rep. 25 (Sup.Ct.N.Y.Co.1949) (agents protected). Although victims of international air disasters have hitherto almost without exception limited themselves to seeking redress from the airline company owning or operating the plane involved, or from the manufacturer of the plane, the pilot ordinarily may also be held liable for damages caused by his operation of the plane, either under the common law doctrine of res ipsa loquitur 3 or the civil law doctrine that the person controlling the vehicle is absolutely liable for injuries resulting from an accident, regardless of the absence of fault or negligence. 4 Similarly, as in this case, other employees can often plausibly be alleged to have been negligent or otherwise responsible for the injuries. Should employees not be covered by the provisions of the Convention, the entire character of international air disaster litigation involving planes owned and operated by American airlines, would be radically changed. The liability limitations of the Convention could then be circumvented by the simple device of a suit against the pilot and/or other employees, which would force the American employer, if it had not already done so, to provide indemnity for higher recoveries as the price for service by employees who are essential to the continued operation of its airline. The increased cost would, of course, be passed on to passengers.

The most immediately relevant provisions of the Convention are Article 17 (imposing on the carrier liability for the death or injury of a passenger arising from an accident sustained on an aircraft), Article 22 (limiting the carrier's liability for each passenger to a fixed sum of francs) and Article 24 (providing that any action for damages under Article 17 is subject to the conditions and limits of the Convention). The pertinent portions of these Articles, in the official French text ratified by the Senate, 49 Stat. 3000, 5 and in an unofficial English translation used by the district court, 6 are as follows:

Article 17

French

(Official)

"Le transporteur est responsable du dommage survenu en cas de mort, de blessure ou de toute autre lesion corporelle subie par un voyageur lorsque l'accident qui a cause le dommage s'est produit a bord de l'aeronef ou au cours de toutes operations d'embarquement et de debarquement."

English

(Unofficial)

"The carrier shall be liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking."

Article 22

French

(Official)

"(1) Dans le transport des personnes, la responsabilite du transporteur envers chaque voyageur est limitee a la somme de cent vingt cinq mille francs. . . . Toutefois par une convention speciale avec le transporteur le voyageur pourra fixer une limite de responsabilite plus elevee."

English

(Unofficial)

"In the transportation of passengers the liability of the carrier for each passenger shall be limited to the sum of 125,000 francs. (In 1934, about $8,300) . . .. Nevertheless, by special contract, the carrier and the passenger may agree to a higher limit of liability."

Article 24

French

(Official)

"(1) Dans les cas prevus aux articles 18 et 19 toute action en responsabilite, a quelque titre que ce soit, ne peut etre exercee que dans les conditions et limites prevues par la presente Convention.

"(2) Dans les cas prevus a l'article 17, s'appliquent egalement les dispositions de l'alinea precedent . . . ."

English

(Unofficial)

"(1) In the cases covered by articles 18 and 19 any action for damages, however founded, can only be brought subject to the conditions and limits set out in this convention.

"(2) In the cases covered by article 17 the provisions of the preceding paragraph shall also apply . . . ."

The foregoing provisions raise two important questions of interpretation bearing on the issue before us. The first is whether, in the absence of any definition of the term "transporteur" (carrier) used in the Convention, that term is limited to the corporate entity, in this case TWA, or was intended to embrace the group or community of persons actually performing the corporate entity's function. Although under the common law, as the district court noted, "the liability of the wrongdoing agent is a separate and clear source of redress, distinct from and logically prior to that of the principal," the Convention was intended to act as an international uniform law, see Block v. Compagnie Nationale Air France, 386 F.2d 323, 337-38 (5th Cir. 1967), and therefore must be read in the context of the national legal systems of all of its members. 7 While we have not attempted to familiarize ourselves with the legal systems of the over 100 member states, it is clear that in at least some jurisdictions the language of Art. 22(1) would have the effect of limiting the liability of the carrier's employees as well as that of the...

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