Tai Ping Ins. Co., Ltd. v. Northwest Airlines, Inc.

• Court: U.S. Court of Appeals — Second Circuit
• Writing for the Court: Before LUMBARD, MESKILL and MINER; MESKILL
• Citation: Tai Ping Ins. Co., Ltd. v. Northwest Airlines, Inc., 94 F.3d 29 (2nd Cir. 1996)
• Decision Date: 08 August 1996
• Docket Number: No. 95-9278,95-9278
• Parties: The TAI PING INSURANCE COMPANY, LTD. and Jetergar Ltd., Plaintiffs-Appellants, v. NORTHWEST AIRLINES, INC., d/b/a Northwest Orient Cargo, Defendants-Appellees.

Page 29

94 F.3d 29

The TAI PING INSURANCE COMPANY, LTD. and Jetergar Ltd. Plaintiffs-Appellants, v. NORTHWEST AIRLINES, INC., d/b/a Northwest Orient Cargo Defendants-Appellees.

No. 95-9278.

United States Court of Appeals Second Circuit.

Argued May 15, 1996.

Decided Aug. 8, 1996.

David L. Mazaroli, New York City (George P. Hassapis, Michael W. Lodwick, Fisher & Porter, Long Beach, CA, of counsel), for Appellants.

Charles E. Schmidt, New York City (Kennedy Lillis Schmidt & English, New York City, of counsel), for Appellees.

Before LUMBARD, MESKILL and MINER, Circuit Judges.

MESKILL, Circuit Judge:

Plaintiffs-appellants The Tai Ping Insurance Company and Jetergar Ltd. (collectively "Tai Ping") appeal from a judgment of the United States District Court for the Southern District of New York, Griesa, C.J., Tai Ping Ins. Co. Ltd. v. Northwest Airlines, 897 F.Supp. 127 (S.D.N.Y.1995), denying their motion for summary judgment, granting defendants-appellees Northwest Airlines, Inc.'s and Northwest Orient Cargo's (collectively "Northwest") cross-motion for partial summary judgment and entering judgment against defendants-appellees in the amount of $1,320. We conclude that the district court erred in its application of Articles 8 and 9 of the Convention for Unification of Certain Rules Relating to International Transportation by Air, Oct. 12, 1929, 49 Stat. 3000, T.S. 876 (1934), reprinted in note following 49 U.S.C.A. § 1502 (the "Warsaw Convention" or the "Convention"). Accordingly, we reverse the judgment of the district court and remand the cause for further proceedings consistent with this opinion.

BACKGROUND

The following facts are not in dispute. Jetergar Ltd. of Hong Kong was the purchaser and intended consignee of a $232,155 shipment of aircraft parts insured by plaintiff-appellant Tai Ping Insurance Company. Northwest contracted with the shipper and seller of the cargo to provide air transportation from Chicago, Illinois to Hong Kong. Northwest did not deliver the shipment to Jetergar Ltd.; the shipment was lost prior to its intended arrival in Hong Kong.

The air waybill ¹ issued by Northwest for the shipment was a two-sided printed form dated December 10, 1992. The face side of the waybill disclosed that Northwest maintained insurance, listed data relating to the shipment, and listed the airport of departure and the airport of final destination. Although it identified the origination flight as flight number "901/10"--flight 901 on December 10--the actual departure date was December 15 and the shipment was to be transferred at Narita, Japan to flight 907. Although the flight routing to Hong Kong included regularly scheduled stops at Anchorage, Alaska and Narita, Japan, the designated spaces for the listing of stopping places between Illinois and Hong Kong were blank.

The reverse side of the waybill contained boilerplate text. The text included statements that the agreed stopping places were "set forth on the face [t]hereof or shown in Carrier's timetables as scheduled stopping places for the route" and that the timetables were "made part [t]hereof." Northwest's published timetable disclosed regularly scheduled stops in Anchorage, Alaska and Narita, Japan for all trans-Pacific freighter flights on December 10, 1992. The waybill also included a statement that it was subject to the Northwest tariff, which was made "part [t]hereof." The tariff in turn provided that the effective timetables were those on the date on which the shipment was received, but that Northwest did not guarantee any particular flight or time for commencement of carriage.

In the proceedings below, Tai Ping filed a motion for summary judgment seeking to recover the full value of the missing cargo, $232,155. Tai Ping contended that the failure to list the scheduled stopping places en route to Hong Kong on the air waybill violated Article 8(c) of the Warsaw Convention and, pursuant to Article 9 of the Convention, deprived Northwest of the limited liability protection provided in Article 22(2). Northwest cross-moved for partial summary judgment, seeking to limit liability to $1,320 under Article 22(2) of the Convention. Northwest contended that the reference to its timetables on the reverse side of the waybill incorporated those timetables into the waybill and thereby satisfied Article 8(c). The district court agreed with Northwest and entered judgment against Northwest in the amount of $1,320. This appeal followed.

DISCUSSION

This appeal requires us to interpret Articles 8 and 9 of the Warsaw Convention. Our task in interpreting the Warsaw Convention begins "with the literal language." Buonocore v. Trans World Airlines, 900 F.2d 8, 9 (2d Cir.1990). Our task also ends there if the language is "reasonably susceptible of only one interpretation." Id. at 9-10; see also Victoria Sales Corp. v. Emery Air Freight, 917 F.2d 705, 707 (2d Cir.1990) (stating that "when the text of a treaty is clear, a court shall not, through interpretation, alter or amend the treaty" (citing Chan v. Korean Air Lines, Ltd., 490 U.S. 122, 134, 109 S.Ct. 1676, 1683-84, 104 L.Ed.2d 113 (1989))). We may apply traditional methods of interpretation only when the text of the treaty is unclear. Chan, 490 U.S. at 134, 109 S.Ct. at 1683-84.

The Convention addresses three transportation documents and the "particulars" which must be set forth in each document. The three documents are passenger tickets, baggage checks and air waybills. See Warsaw Convention, Chap. II, Sec. I (passenger tickets), Chap. II, Sec. II (baggage checks), Chap. II, Sec. III (air waybills). The consequences for violating a "particular" requirement depend on which transportation document and which "particular" are involved.

In general, Article 18 of the Warsaw Convention presumes an air carrier liable for loss or damage to goods in transit, but Article 22(2) limits liability to 250 francs per kilogram, or approximately $9.07 per pound. Id., Arts. 18, 22(2). However, under Article 9, the Convention eliminates limited liability protection if the air waybill does not "contain" certain essential "particulars" enumerated in Article 8. Id., Art. 9.

More specifically, Article 8 of the Convention requires that the air waybill "shall contain" seventeen particulars. Article 8 provides, in pertinent part:

The air waybill shall contain the following particulars:

....

(c) The agreed stopping places, provided that the carrier may reserve the right to alter the stopping places in case of necessity, and if he exercises that right the alteration shall not have the effect of depriving the transportation of its international character.

Id., Art. 8(c). Article 9 makes ten of the seventeen particulars essential, including the "agreed stopping places," id., by stating that the carrier is not entitled to limited liability protection "if the air waybill does not contain all the particulars set out in article 8(a) to (i), inclusive, and (q)." Id., Art. 9.

As we noted in Brink's Ltd. v. South African Airways, 93 F.3d 1022 (2d Cir.1996), argued contemporaneously with this case, ² our cases interpreting Articles 8 and 9 of the Warsaw Convention yield three rules. First, if an air carrier omits from its air waybill any of the enumerated particulars of subsections (h) and (i) of Article 8, Article 9 operates to deprive the carrier of limited liability protection if the omitted particular is of commercial significance. Exim Indus. v. Pan Am. World Airways, 754 F.2d 106, 108 (2d Cir.1985). Second, if an air carrier omits any other essential particular from its air waybill, Article 9 automatically deprives the air carrier of limited liability protection regardless of commercial significance. Maritime Ins. Co. Ltd. v. Emery Air Freight Corp., 983 F.2d 437, 440 (2d Cir.1993). Third, if an air carrier includes an essential particular in its air waybill, but deviates in language or some other respect, a court may look beyond the language of the text to secondary tools of interpretation in determining liability. Id. Each of these rules comports with the general rule that where the text is clear, a court has "no power to insert an amendment." Chan, 490 U.S. at 134, 109 S.Ct. at 1684.

Our decision in Brink's enunciated an additional rule. In that case, the shipper contended that Article 8(c) required the air carrier to list the agreed stopping places within the air waybill itself. The carrier instead had referred to its timetables for the stopping places. We reasoned that resort to secondary tools of interpretation was permissible and necessary because the Maritime decision addressed only the pure omission of agreed stopping places and Articles 8 and 9 were otherwise ambiguous. Brink's, 93 F.3d at 1033. We noted that other signatories to the Convention approve of satisfying Article 8(c) by incorporating timetables into the air waybill. Id. We also noted that incorporation of readily available timetables provides a shipper with sufficient notice of the international character of the flight, thereby realizing the drafters' purpose in including the agreed stopping places in the air waybill. Id. Accordingly, we held that an air waybill that incorporates readily available timetables satisfies Article 8(c)'s requirement that the air waybill "contain" the "agreed stopping places" and does not deprive the air carrier of limited liability protection under Article 9. Id.

The purpose behind Article 8(c), which we examined in Brink's, is most pertinent here. As we explained, the participants to the Convention included the requirement that the waybill contain the contemplated stopping places so that the waybill itself would notify the shipper of the international character of the flight and, thus, the applicability of the Warsaw Convention. Brink's, 93 F.3d at 1034-35. We also explained that while the point of departure and destination ordinarily would indicate the domestic or international character of the flight, Article 8(c)...