Rep. Nat'l Bank of NY v. Delta Air Lines

• Decision Date: 19 June 2001
• Docket Number: DEFENDANT-APPELLANT,PLAINTIFF-APPELLEE,Docket No. 00-9536
• Citation: 263 F.3d 42
• Parties: (2nd Cir. 2001) REPUBLIC NATIONAL BANK OF NEW YORK,, v. DELTA AIR LINES, Argued:
• Court: U.S. Court of Appeals — Second Circuit

Page 42

263 F.3d 42 (2nd Cir. 2001)

REPUBLIC NATIONAL BANK OF NEW YORK, PLAINTIFF-APPELLEE, v. DELTA AIR LINES, DEFENDANT-APPELLANT.

Docket No. 00-9536

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Argued: June 19, 2001

Decided: August 29, 2001

Delta Air Lines ("Delta") appeals the judgment entered in the United States District Court for the Southern District of New York (Martin, J.), denying Delta (as carrier) the conditional right to limit its liability for lost cargo under the Warsaw Convention, and awarding the shipper the full amount of its loss on a lost currency shipment.

Affirmed.

Craig S. English, Kennedy Lillis Schmidt & English, New York, NY (Charles E. Schmidt and Matthew T. Loesberg on the brief), for plaintiff-appellee.

Francis A. Montbach, Mound, Cotton, Wollan and Greengrass, New York, NY (David W. Kenna on the brief), for defendant-appellant.

Before: Jacobs, Parker, and Sotomayor, Circuit Judges.

Jacobs, Circuit Judge

A 26-pound bag containing $1 million in currency went missing en route by air from New York to Moscow. The shipper, Republic National Bank of New York ("Republic"), has sued the carrier, Delta Air Lines ("Delta"), for the loss. Delta interposed as a defense the per-pound limitation of liability for lost cargo under the Convention for the Unification of Certain Rules Relating to International Transportation by Air, Oct. 12, 1929, 49 Stat. 3000, T.S. 876, reprinted in note following 49 U.S.C. § 40105 ("Warsaw Convention"; "Convention"; "Article").

Delta now appeals the judgment entered in the United States District Court for the Southern District of New York (Martin, J.), denying Delta (as carrier) the conditional right to limit its liability for lost cargo under the Warsaw Convention, see Republic Nat'l Bank v. Delta Air Lines, No. 98 Civ. 8729 (JSM), 2000 WL 815896 (S.D.N.Y. June 23, 2000) ("Republic I"), and awarding Republic (as shipper) the full amount of its loss, see Republic Nat'l Bank v. Delta Air Lines, No. 98 Civ. 8729, 2000 WL 1644483 (S.D.N.Y. Nov. 2, 2000) ("Republic II").

The limitation of a carrier's liability under the Warsaw Convention is conditioned upon, inter alia, the inclusion of specified particulars in the air waybill, which is the paper used to process the cargo. See Arts. 8, 9. One indispensable particular is the waybill's place of execution. See id. at Art. 8(a). The waybill at issue was executed at John F. Kennedy Airport in New York, but there is no entry for the place of execution in the spot designated for that datum on the face of the waybill; "JFK" appears on the face of the waybill, but in only the spot marked "Airport of Departure." The district court, after employing a "reasonable person['s] reading" of Delta's air waybill, concluded that the waybill lacked one of the required particulars, and granted summary judgment to Republic. See Republic I, 2000 WL 815896; see also Republic II, 2000 WL 1644483.

We affirm.

I.

A. The Shipping Arrangements

On December 9, 1997, Republic shipped 12 bags of U.S. currency from John F. Kennedy International Airport ("JFK") to the Moscow Collection Board at the Sheremetyevo International Airport ("SVO") using Delta as its carrier. One 26-pound bag, containing $1 million in cash, was missing when the shipping container was opened in Moscow.

Delta submitted affidavits, which are credited for purposes of summary judgment, showing that Republic and Delta had an arrangement whereby, in exchange for a reduced freight charge, Republic would prepare the waybills for its shipments, using blank Delta forms.

Republic would then deliver the currency shipments together with the completed waybills to Delta at the airport of departure.

B. The Warsaw Convention

This claim arises under the Warsaw Convention.¹ The Convention "regulate[s] in a uniform manner the conditions of international transportation by air in respect of the documents used for such transportation and of the liability of the carrier." Warsaw Convention (Introduction). If the requirements of the Convention are observed, a carrier's liability for lost cargo is limited. See id. at Art. 22(2); see also Trans World Airlines, Inc. v. Franklin Mint Corp., 466 U.S. 243, 256 (1984) (noting that "[t]he Convention's first and most obvious purpose was to set some limit on a carrier's liability for lost cargo"). It is uncontested that, if the Warsaw Convention's limitation on liability applies, Delta's liability for the lost money-bag is limited to 250 francs per kilogram, i.e., nine dollars and seven cents a pound, for a total of $235.82. See Art. 22(2); Trans World Airlines, 466 U.S. at 255-60 (affirming Civil Aeronautics Board's currency conversion rate).

The limited liability provision requires that the air waybill contain, inter alia: "[t]he place and date of [the waybill's] execution" and "[t]he place of departure and of destination." Convention at Art. 8(a), (b).

C. The Air Waybill

The lost bag was one of twelve money-filled bags transported under air waybill no. 006 5800 5570 ("the Air Waybill"). Delta's form of air waybill contains numerous blanks and boxes for the entry of information. One box is designated "Airport of Departure"; and another (as shown in the margin²) recites that the waybill was "Executed On" a "Date", at a "Time", and at a "Place". On the back of the waybill, an additional clause reads: "The first Carrier's address is the airport of departure shown on the face hereof."

The "Airport of Departure" on the Air Waybill is given as "JFK - SVO"; the "Executed On" section is blank except for the sub-entry "Date", which is given as "12/9/97".

The New York branch of Republic is in the practice of typing "NY" in the blank for place of execution; the Air Waybill in question, however, was prepared by Republic's London branch, which makes a practice of leaving blank the spot that calls for "Place" of execution. [A 70-75] Delta does not dispute that notwithstanding Republic's help, Delta had ultimate responsibility for ensuring that the Air Waybill contained the necessary particulars. Appellant's Reply Brief at 8.

D. Prior Proceedings

Republic filed suit against Delta on December 10, 1998, and moved for summary judgment dismissing Delta's limited liability defense on the ground that no "place of execution" was contained in the Air Waybill. Delta cross-moved to enforce the limitation.

On June 23, 2000, the district court ruled that because the Air Waybill did not contain the place of execution as required by Article 8(a) of the Warsaw Convention, Delta could not benefit from Article 22(2)'s limitation of liability. See Republic I, 2000 WL 815896, at *2. On November 2, 2000, the court granted Republic's summary judgment motion for an award in the amount of $1 million (plus prejudgment interest). See Republic II, 2000 WL 1644483, at *1-2.

II.

It is undisputed that this case is governed by the Warsaw Convention, and that the Warsaw Convention limits Delta's liability for the lost currency only if the Air Waybill "contains" the "place of execution". See Art. 8 ("The air waybill shall contain the following particulars: (a) The place and date of its execution;..."); Art. 9 ("[I]f the air waybill does not contain all the particulars... the carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his liability.").

On appeal, Delta urges two closely related arguments. First, Delta argues that because (a) the Air Waybill was executed at JFK Airport in New York, and (b) "JFK" appears on the face of the document as the "Airport of Departure", it therefore cannot be denied that the document "contains" "JFK" and thus contains what we know to be the place of execution. Second, Delta argues that the terms printed on the reverse side of the Air Waybill state that the airport of departure is also "[t]he first Carrier's address", and that caselaw supports the view that the first carrier's address is the place of execution. "Delta's position is that one need look no further than the Air Waybill itself for the [required] particular." Appellant's Reply Brief at 8. As Delta emphasizes, the Warsaw Convention does not prescribe where or how the required particulars must be presented on an air waybill. See Brink's Ltd. v. South African Airways, 93 F.3d 1022, 1034 (2d Cir. 1996).

Republic is apparently unable to deny that the Air Waybill was executed at JFK, and it is incontestible that "JFK" is contained in the Air Waybill under "Airport of Departure". Republic argues, however, that the document contains nothing about the place of execution, that the entry for that datum is blank, and that there is no basis for inferring that "JFK" is the place of execution because there is no basis for finding that the airport of departure is always the place of execution.

The district court found that "a reasonable person examining the waybill in this case would not be able to determine where the waybill was executed. The airport of departure is not necessarily the place where all air waybills are executed. It is not clear from the air waybill exactly where the document was executed.... Thus, a reasonable person could not be certain that JFK was the actual place of execution." Republic I, 2000 WL 815896, at *2. The court therefore granted summary judgment to Republic. See id.; see also Republic II.

III.

We review the grant or denial of summary judgment de novo. See Federal Ins. Co. v. Yusen Air & Sea Servs. Pte. Ltd., 232 F.3d 312, 313 (2d Cir. 2000) (per curiam). Summary judgment is appropriate only where no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c). Here, the parties agree that there are no disputed material facts; the only issue is whether Delta is entitled, as a matter of law, to limit its liability under the terms of the Warsaw Convention.

The first principle is that we may not "alter[] even slightly the plain,...