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The Liability Reporter February 2007

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The Liability Reporter February 2007 International Air Transport Association The Liability Reporter February 2007 Condon & Forsyth llp NEW YORK LOS ANGELES Volume 10 February 2007 Table of Contents Foreword.............................................................................................................................. i Table of Contents................................................................................................................ ii I. The Montreal Convention and the Courts................................................................1 (a) Exclusivity ...................................................................................................1 (b) Damages.......................................................................................................3 (c) Liability Limits for Baggage Claims ...........................................................4 (d) Delay............................................................................................................6 (e) Definition of Accident .................................................................................9 II. The Warsaw Convention and the Courts .................................................................9 (a) Applicability of the Convention...................................................................9 (b) Exclusivity (Preemption Of Claims)..........................................................12 (c) Definition of Accident ...............................................................................17 (d) Damages.....................................................................................................20 (e) Carriage by Air ..........................................................................................23 (f) Delay..........................................................................................................24 (g) Notice of Claim..........................................................................................26 (h) Jurisdiction and Venue...............................................................................27 (i) Limitation of Actions.................................................................................30 (j) Successive Carriage ...................................................................................32 (k) Prejudgment Interest ..................................................................................33 III. Deep Vein Thrombosis .......................................................................................33 IV. EC Directive 93/13/EEC on Unfair Terms in Contracts.....................................36 V. Disabled Passengers............................................................................................36 ii VI. Denied Boarding, Cancellation and Long Delay of Flights................................40 VII. Forum Non Conveniens ......................................................................................46 VIII. Employment Law................................................................................................48 IX. Frequent Flyer Programs (Australia) ..................................................................55 X. War Risk Insurance Coverage ............................................................................57 XI. Issues Arising Out of September 11, 2001 .........................................................57 XII. Foreign Sovereign Immunities Act – Actions Against Terrorists ......................60 XIII. Death on the High Seas Act Damages ................................................................61 XIV. Alleged Violation of Proposition 65 (California) ...............................................62 XV. Preemption ..........................................................................................................63 XVI. Choice of Law.....................................................................................................67 XVII. Tokyo Convention ..............................................................................................69 XVIII. Criminal Proceedings..........................................................................................70 XIX. Protection of Intellectual Property and Trademarks ...........................................71 XX. Bailment – Loss of International Shipment by Robbery (Singapore).................72 XXI. State Law Claims (United States).......................................................................73 XXII. Antitrust: Airlines and Travel Agents.................................................................75 XXIII. Ticket Refunds....................................................................................................77 XXIV. IATA Clearing House Regulations (Australia)...................................................77 iii I The Montreal Convention and the Courts The Montreal Convention of 19991 entered into force on November 4, 2003, 60 days after the United States became the thirtieth party to ratify the Convention.2 The Montreal Convention is the successor to the Warsaw Convention,3 and unifies and replaces the system of liability that derives from the Warsaw Convention.4 The Montreal Convention is applicable to all “international carriage of persons, baggage or goods performed by aircraft for reward.”5 There are currently 75 parties to the Montreal Convention, with the recent ratification by Madagascar on December 28, 2006.6 While the Montreal Convention has now been in effect for just over three years, there have been relatively few decisions interpreting its provisions. For the most part, the cases which have discussed the Montreal Convention have done so in conjunction with its predecessor, the Warsaw Convention, to which over 120 states are parties. Most of the cases discussing the Montreal Convention have relied on similar provisions contained in the Warsaw Convention. These decisions tend to focus on the preemptive effect of the Montreal Convention insofar as the Convention supersedes state law rights and remedies. a. Exclusivity In Walton v. MyTravel Canada Holdings Inc.,7 an application was made for certification of a class action on behalf of the passengers on an international flight from the Dominican Republic to Canada on January 21, 2004. The flight was delayed for over an hour at Punta Cana airport in the Dominican Republic as a result of mechanical difficulties. The statement of claim sought to bring the action on behalf of 215 passengers who boarded a Skyservice aircraft with destinations of Regina and Saskatoon, Saskatchewan. The basis of the action was negligence for which plaintiffs alleged all of the defendants were liable (including travel agents and the carrier). Conditions were very hot on the aircraft while passengers waited for the mechanical difficulties to be rectified. No air conditioning was available to cool the cabin. Plaintiffs alleged that each defendant was negligent in its dealing with the plaintiffs, and that they 1 Convention for the Unification of Certain Rules for International Carriage by Air, opened for signature on May 28, 1999, reprinted in S. Treaty Doc. 106-45, 1999 WL 333292734 (Treaty). 2 See, Montreal Convention, Article 53(6). 3 Convention for the Unification of Certain Rules Relating to International Transportation by Air, concluded at Warsaw, Poland, October 12, 1929, 49 Stat. 3000, T.S. No. 876, 137 L.N.T.S. 11 (1934), reprinted in note following 49 U.S.C.A. § 40105 (1997)(“Warsaw Convention”). 4 Ehrlich v. American Airlines, Inc., 360 F.3d 366, 371 (2d Cir. 2004). 5 Montreal Convention, Art. 1(1); Ehrlich v. American Airlines, Inc., 360 F.3d 366 (2d Cir. 2004). 6 For a complete list of the parties to the Montreal Convention, please see Appendix A. 7 2006 SKQB 231 (Queen’s Bench for Saskatchewan, May 16, 2006). 1 owed plaintiffs a duty of care to ensure that their health and well-being were maintained during the flight. Although this case primarily involved an application for certification as a class action, such applications in Canada involve setting out the basis for the proposed representative plaintiff’s personal claim. The defendants opposed the motion, and the court agreed that the requirement to set forth a reasonable cause of action was not met. There were several grounds for the court’s decision. First, the defendants argued that any potential claim the passengers on the flight might have had against any of the defendants was governed solely by the provisions of the Montreal Convention, and that the requirement for there to be “bodily injury” under Article 17(1) had not been met. As there was no question that the flight was international, the Convention was held to be applicable. After examining the Convention, and finding that plaintiffs’ claims fell within the scope of Article 29,8 the court turned to the question of exclusivity. The court examined Warsaw Convention cases in coming to its conclusion. Citing Connaught Laboratories Ltd. v. British Airways9 and McDonald v. Korean Air,10 the court held that the Warsaw Convention, and therefore the successor Montreal Convention, was “exclusive and exhaustive” in respect of what plaintiffs could claim. Thus, plaintiffs’ claims which fell outside the ambit of the Convention, such as negligence, breach of contract, unlawful confinement and the request for punitive damages, did not constitute a cause of action. In Moss v. Delta Air Lines Inc., et al.,11 a company under contract with an air carrier to transport wheelchair-bound passengers between airport terminals was held not liable for personal
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