Scott v. Middle East Airlines Co., SA

• Decision Date: 26 February 1965
• Citation: 240 F. Supp. 1
• Parties: Frances Louise SCOTT, as Executrix of the Estate of William Anthony Scott, Deceased, Libelant, v. MIDDLE EAST AIRLINES CO., S.A., Respondent.
• Court: U.S. District Court — Southern District of New York

240 F. Supp. 1

Frances Louise SCOTT, as Executrix of the Estate of William Anthony Scott, Deceased, Libelant, v. MIDDLE EAST AIRLINES CO., S.A., Respondent.

United States District Court S. D. New York.

February 26, 1965.

Speiser, Shumate, Geoghan & Law, New York City, for libelant; Charles F. Krause, New York City, of counsel.

Symmers, Fish & Warner, New York City, Proctors for respondent.

PALMIERI, District Judge.

This is a motion brought by the libelant for an order granting leave to file an amended libel and for an order overruling the respondent's exceptions to the libel.

The libelant is the executrix of the estate of William Anthony Scott who died in a crash of one of the respondent's planes en route from Beirut, Lebanon, to Dhahran, Saudi Arabia. The action is brought under the Death on the High Seas Act, 46 U.S.C. § 761 et seq., and more particularly § 764.¹

The respondent's sixth exception to the libel was based on the libelant's failure to properly allege the foreign law on which the action was based. Iafrate v. Compagnie Generale Transatlantique, 106 F.Supp. 619, 622 (S.D.N.Y.1952). The libelant now agrees with the respondent citing Bergeron v. Koninklijke Luchtvaart Maatschappij, N.V., 188 F.Supp. 594 (S.D.N.Y.1960), for the proposition that Lebanese law is the applicable law, and hence proffers the amended libel. This amendment sufficiently pleads the foreign law, and it is allowed.

The respondent's fifth exception to the libel is based on the libelant's failure to comply with Section 160 of the New York Decedent Estate Law, McKinney's Consol.Laws, c. 13. Although this Court is far from agreeing with the respondent that the libelant must comply with Section 160, Iafrate v. Compagnie Generale Transatlantique, supra, 106 F.Supp. at 622, the question need not be decided, for the libelant has represented to the Court that she would in fact comply with that section.

There remain four exceptions which constitute the heart of this dispute. The first three allege that the respondent is not amenable to process within this state and that service was improper. The fourth exception alleges that in any event this district is an inconvenient forum for the trial of this cause.

After hearing oral argument, decision was reserved pending the deposition of Mr. Labib Majdalani, Sales Manager, North and South America, of respondent Middle East Airlines (MEA), the person upon whom service was effected.² This deposition has now been completed and is before the Court.

Recently this respondent urged the same contentions in a suit arising out of a similar air crash. Wahl v. Pan American World Airways, Inc., 227 F.Supp. 839 (S.D.N.Y.1964). Judge Bonsal of this Court ruled that MEA was amenable to process here and refused to dismiss the suit on the ground of forum non conveniens.

Normally, it would suffice to simply cite Judge Bonsal's decision as dispositive of this motion, but the respondent has raised two contentions which it says distinguish the Wahl case. First, MEA argues that the Wahl decision is grounded on the theory that the deceased passengers, of whom the plaintiffs were the survivors, were Americans who had purchased their tickets in America. Presumably this means that Judge Bonsal applied the New York long-arm statute, C.P.L.R. § 302(a) (1), and not a more general "doing business" test. C.P.L.R. § 301.

Second, respondent argues that since the Wahl decision, the New York law has been clarified by the Appellate Division in the case of Bryant v. Finnish Nat'l Airline, 22 A.D.2d 16, 253 N.Y.S.2d 215 (1964). This case indicates, says the respondent, that the Wahl decision was wrong and that it should be held here that MEA is not subject, as a matter of law, to personal jurisdiction in this state. These two points will be discussed in inverse order.

Threshold questions are presented before the effect of the Bryant case can be considered.

It has been assumed that the test of amenability to suit in this case is the well-known "doing business" within the state test. The assumption is not that easy to make. At issue is the jurisdictional power of a federal court in admiralty, not the jurisdictional power of a state court. The test of "doing business" and its liberalization (the minimum contacts test) derived from cases which were concerned with the constitutional limits imposed by the Fourteenth Amendment on the states in the exercise of their jurisdiction. See e. g., Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878); First Flight Co. v. National Carloading Corp., 209 F.Supp. 730, 734 (E.D.Tenn.1962); Green, Federal Jurisdiction in Personam of Corporations and Due Process, 14 Vand.L.Rev. 967 (1961). Logically, these cases do not apply to federal jurisdiction, especially in federal question cases.³ First Flight Co. v. National Carloading Corp., supra at 736-740. See also the Green article, supra; Hart & Wechsler, The Federal Courts and the Federal System, 960 (1953). However, the requirement that a defendant corporation have "minimum contacts" with the state in order to be subject to suit has long been applied for various reasons⁴ — many unstated — in the federal courts even where the suit is under the original jurisdiction of the federal courts, and even where the defendant is an alien corporation. See e. g., People's Tobacco Co. v. American Tobacco Co., 246 U.S. 79, 38 S.Ct. 233, 62 L.Ed. 587 (1918) (suit brought under the Sherman Act); Barrow S. S. Co. v. Kane, 170 U.S. 100, 111, 18 S.Ct. 526, 42 L.Ed. 964 (1898); Arrowsmith v. United Press Int'l, 320 F.2d 219 (2d Cir. 1963) (diversity jurisdiction); Arpad Szabo v. Smedvig Tankrederi, S. A., 95 F.Supp. 519 (S.D.N.Y.1951) (suit in admiralty under Jones Act); Paragon Oil Co. v. Panama Refining & Petrochemical Co., 192 F.Supp. 259 (S.D.N.Y.1961). Cf. Polizzi v. Cowles Magazines, Inc., 345 U. S. 663, 666-667, 73 S.Ct. 900, 97 L.Ed. 1331 (1953).⁵

Given the array of precedents in this area, this Court cannot take it upon itself to change the law, as did Judge Wilson in the First Flight case — no mean feat for a district judge.⁶ See Judge Friendly's reminder in Arrowsmith, 320 F.2d at page 225 note 5. Thus, in order to acquire jurisdiction over the respondent it must be found that the respondent has sufficient ties not merely with the United States but with the state of the forum to make jurisdiction over it consistent with "our traditional conception of fair play and substantial justice." International Shoe Co. v. Washington, supra, 326 U.S. at 320, 66 S.Ct. at 160. There is, furthermore, an additional reason for not abandoning this test here. MEA is a Lebanese corporation and, unlike an American corporation, there is the possibility that it is not "present" in the United States at all. Thus, it is not simply a question of in which state shall the respondent be sued but whether it should be sued in the United States at all. In such a case there should certainly be required a finding that MEA has the necessary contacts with the United States to allow suit and, for the reasons noted, with New York as well.⁷ Of course, a finding of the latter would necessarily mean a finding of the former.

Since the accident here did not arise out of the activities of MEA in this state, the appropriate test is "doing business", and not the more liberal single-act or long-arm test⁸ which has spawned such state acts as C.P.L.R. § 302(a) (1). Cf. Hanson v. Denckla, supra, 357 U.S. at 251, 78 S.Ct. 1228; Seawind Compania, S. A. v. Crescent Line, Inc., 320 F.2d 580, 583 (2d Cir. 1963).

Having crossed this first threshold, the Court is faced with a second preliminary question. Is this Court obligated to apply state law to determine whether MEA is doing business, or should a federal test control? The respondent citing Arrowsmith v. United Press Int'l, supra, argues that state law governs. As noted, however, jurisdiction in Arrowsmith was based on diversity, while here it is based on admiralty. As a matter of fact, this action is within the exclusive jurisdiction of the federal court, Devlin v. Flying Tiger Lines, Inc., 220 F.Supp. 924 (S.D.N.Y.1963), even though New York state courts have exercised jurisdiction in Death on the High Seas Act cases. See e. g., Ledet v. United Aircraft Corp., 10 N.Y.2d 258, 219 N.Y.S.2d 245, 176 N.E.2d 820 (1961). Arrowsmith, then, is not automatically dispositive of the question here. Judge Friendly, writing for the majority, made the following statement:

"We express no opinion whether a `federal standard' may govern jurisdiction over foreign corporations in federal question litigation * * *. Suffice it to say that the considerations favoring the overriding of state policy would be far more persuasive than in an ordinary diversity suit." 320 F.2d p. 228 n. 9.

Cf. Seawind Compania, S. A. v. Crescent Line, Inc., supra, where the Court (including Judge Friendly) did not so much as mention the possibility of state law as controlling. Also cf. United States v. Cia Naviera Continental, S.A., 178 F. Supp. 561 (S.D.N.Y.1959). See also Friendly, In Praise of Erie, 39 N.Y.U.L. Rev. 383, 404-405 (1964).

In Levinson v. Deupree, 345 U.S. 648, 73 S.Ct. 914, 97 L.Ed. 1319 (1953), the Court held that Erie R. R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), was "irrelevant" in admiralty. 345 U.S. p. 651, 73 S.Ct. 914. As in that case, the issue here is not an integral part of a state-created right. In point of fact, the right here is created purely by federal and Lebanese law.

Although it may be true that in some cases the Erie doctrine may have application in admiralty, see Bell v. Tug Shrike, 332 F.2d 330, 332 (4th Cir. 1964), Black, 13 Mo.B.J. 173, 175 (1942); but cf. Pope & Talbot, Inc. v. Hawn, 346 U.S. 406, 409-410, 74 S.Ct. 202, 98 L.Ed. 143 (1953); Friendly, In Praise of Erie,...