Jan 22 2019

Morrison Mahoney Aviation Update – January 2019

MONTREAL CONVENTION

PROPER FORUM 
Lee v. Korean Air Lines, Co. Ltd., 2019 WL 77433 (W.D. Wash. 2019)

Claimants, citizens of South Korea, had round-trip tickets between South Korea and Seattle, Washington. While disembarking, plaintiff injured thigh after contacting hand rest affixed to seat. Action brought under Montreal Convention. Court granted airline’s motion to dismiss for lack of subject matter jurisdiction.

Pursuant to Article 33(1), a passenger claiming personal injury can bring an action in territory of State where the passenger has his or her principal and permanent residence and to or from territory which the carrier operator services. Under Article 33(1), "place of destination" is interpreted the same as Article 28(1) and means that a round-trip ticket is the same place as that of departure. Since the "place of destination" was Busan, South Korea not Seattle, Washington and none of the other forums provided for in Article 33 lie in the United States, Court held it had no subject matter jurisdiction.

FEDERAL JURISDICTION/REMOVAL 
Garcia v. Aerovias de Mexico, S.A., 2018 WL 6570461 (N.D. Ill. 2018)

Case involved 14 different actions previously consolidated by the Court. Passenger claimants asserted personal and financial injuries stemming from plane crash in July, 2018. Issue was whether Federal Court had jurisdiction following removal from state court.

Court noted that Article 33 provides that "[a]n action for damages must be brought, at the option of the plaintiff, in the territory of one of the State territories." Article 33 permits plaintiff to choose between "international venues" as such plaintiff had right to choose between the United States and Mexico. Nonetheless, Article 33 does not prevent removal from state to federal court.

Jurisdiction must otherwise exist under diversity or federal question. While there was diversity, defendants failed to demonstrate that controversy involved $75,000 or more in dispute. As to federal question jurisdiction, Court held that a claim under Montreal Convention prevents a federal question sufficient to invoke federal jurisdiction. Accordingly, since 2 of the 14 plaintiffs specifically asserted claims under the Montreal Convention federal question jurisdiction was established in federal court preventing any remand.

As to the remaining 12 plaintiffs which had not asserted express or direct claims under the Montreal Convention, the Court refused to find complete preemption following the Seventh Circuit’s 2008 case- Sompo Japan Ins., Inc. v. Nippon Cargo Airlines, Co., 522 F. 3d 776, 781 (7th Cir. 2008). As such, and as to the 12 plaintiffs that did not assert a direct claim under the Convention, there was no federal jurisdiction under either diversity or federal question requiring remand to the state court.

TIMELINESS/DISEMBARKING 
Dagi v. Delta Airlines, Inc., 2018 WL 6506074 (D. Mass. 2018)

Passenger on commercial airline flight between Boston and London in March, 2015 asserted he was confined without justification by airline employees. Plaintiff did not commence suit until nearly three years following incident. Issue presented was whether the Montreal Convention and its two year condition precedent applied requiring dismissal.

Central issue was whether incident took place during the process of disembarking. Court relied on the three pronged inquiry identified in McCarthy v. Northwest Airlines, 56 F. 3d 313, 317 (1st Cir. 1995): (1) activity at time of injury; (2) location at time of injury; and (3) extent of carrier control at time of injury.

Court found that as to location, airline employee had prevented plaintiff passenger from leaving aircraft and later confined passenger on jet-way with plaintiff under escort with another airline agent in terminal and within vicinity of aircraft. While aircraft journey had ended, the relevant events started on the aircraft and proceeded into the disembarkation process. Finally, court found that passenger was under control of carrier. Court rejected that: (a) control factor was limited to "routine" circumstances; (b) that the control factor must be given a narrow construction; and (c) that recovery under Convention constituted a severe denial of recovery.

PREEMPTION
Ambe v. Air France, 2018 WL 6436875 (C. D. Cal. 2018)

Passenger died aboard commercial flight between Los Angeles and Paris. Passenger died due to accidental asphyxiation. It was alleged that flight crew was not properly trained to address medical emergency and that airplane was not out-fitted with proper emergency medical equipment. Claims under common law and Montreal Convention were brought with it asserted by claimant that claims for breach of contract were preempted by Montreal Convention.

Court found that state based claims for breach of contract were "inextricably intertwined" with on-board accident and thus fell within in Montreal Convention. Court noted that the "Convention would cease to be an exclusive remedy…if plaintiffs who could not assert state-law claims for the act itself would nonetheless be permitted to sue under state law for ex ante representations that the act would not occur ex post failure to redress the harm."

FORUM NON CONVENIENS
Eldeeb v. Delta Airlines, Inc., 2018 WL 6435739 (D. Minn. 2018)

Action premised on asserted injury by passenger decedent traveling from Minnesota to Egypt. During scheduled lay-over in Paris, decedent passenger, while provided wheelchair, was left at arrival gate for 12 hours and missed connecting flight to Egypt. He was later recovered and provided later flight to Egypt. Passenger subsequently died of pancreatic cancer with the claim seeking recovery for "hastening" death.

Issue presented was whether action filed in Minnesota should be dismissed due to forum non conveniens. Court held that France was more appropriate forum. Defendants had consented to jurisdiction in France with Minnesota found to have little relevant connection to incident. Held that although Minnesota was plaintiff’s state of residence; was place of departure; and Delta’s place of business, these contacts were insufficient to justify Minnesota as proper forum.

ARTICLE 17 ACCIDENT
Patel v. Singapore Airlines, Ltd., 745 Fed. Appx. 9 (Memo) (9th Cir. 2018)

Passenger brought claim against airline which allowed her to fly from United States to India on cancelled Indian passport. Upon arrival in India, she was not allowed to enter the country and was forced to return to the United States.

Court stated that the Article 17 "accident" occurred with the airline allowing her to board its plane after she presented with cancelled Indian passport. Court emphasized it is the "cause" of the injury rather than the occurrence of the injury alone that determines whether there is an Article 17 "accident." It found that the cause of plaintiff’s accident is her knowing failure to travel with a valid passport, not airline’s decision to allow her to fly without one. Court thus affirmed determination of trial court that there was no "accident" under Article 17 as a matter of law.

Quevedo v. Iberia Lineas De Espana, 2018 WL 4776754 (S. D. Fla. 2018)

Severe turbulence tossed passenger from seat and in and about cabin causing severe injury. Held that "severe turbulence" was cause of accident and was "unusual and unexpected." Court rejected contention that passenger’s failure to secure seat belt broke causative link under Article 17. Held that liability only requires that "the passenger be able to prove that some link in the chain was an unusual or unexpected event external to the passenger." The failure of the passenger to secure his seatbelt was found to be a potential causal link, but it remained an issue of comparative negligence not an absolute bar as a matter of law.

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AIRLINE DEREGULATION ACT (ADA)

PREEMPTION
Worldwide Aircraft Services, Inc. v. United Healthcare Ins. Co., 2018 Westlaw 6589838 (M.D. Fla. 2018)

Air Ambulance company brought various state common law claims against medical insurer asserting under-payment of emergency transfer services.

Court held that Airline Deregulation Act (ADA) preempted state unjust enrichment and quantum meruit claims as they were not based on the parties agreement but placed state-imposed obligation upon air ambulance company. As to quantum meruit claim, court distinguished between an implied in fact and implied in law contract. As claim was based on an implied in fact contract for a reasonable price, there is no imposition on air ambulance’s ability to price its services without state interference. As such, such a claim was potentially not preempted.

Air Evac EMS v. Cheatham, 910 F. 3d 751 (4th Cir. 2018)

Air Ambulance company brought action asserting that West Virginia statutes setting reimbursement rates for air ambulance services, workers’ compensation claims, and state’s medical expense coverage program for governmental employees were preempted by ADA.

Held that air ambulance was a carrier under the ADA. Also found that claims were preempted as state reimbursement laws had the force and effect of law and were preempted despite state’s contention that the laws and regulations only reflected the state’s participation in health insurance market, where laws were enforceable by state through civil and criminal sanctions.

Cox v. Spirit Ambulance Inc., 2018 Westlaw 6168086 (E.D. N.Y. 2018)

Passenger class action asserted state claims for breach of contract, unjust enrichment, and fraud based on contention that airline mislead passengers in believing they were purchasing an airfare at a specific price and thereafter breached the agreement by requiring them to pay additional fees for carry-on baggage.

All claims involving breach of contract assertion were preempted as claims did not seek to enforce terms of agreement between the parties, but instead depended upon an enlargement or enhancement of the scope of the agreement. Passengers purported to input their own subjective understanding of airline structures and their expectation that carry-on baggage was included in the contracted price and assumed airline voluntary undertook such obligation. Court made clear that breach of contract claim against an airline would not be preempted by ADA only if a plaintiff claims and proves that an airline dishonored a term of what an airline itself stipulated.

Fraud claim, in turn, was found to directly relate to price and thus was preempted. Claim was premised on imposition of fees (i.e. claim that airline did not disclose true cost of transportation vis-à-vis carry on fees) including whether and how much fees would be charged which was directly related to airline’s rates and involved application of state imposed law that exceeded the obligation imposed by parties contract.

Hakimi v. Societe Air France, S.A., 2018 Westlaw 4826487 (N.D. Cal. 2018)

Action brought for breach of contract and unjust enrichment against airline because airline accepted payment for "Premier Economy" seats on France flights while failing to provide 40% more space as promised.

Court found claims time-barred and preempted under ADA. The unjust enrichment claim was preempted by the ADA as it inherently looks outside the four corners of the parties’ agreement. "Whether termed unjust enrichment, quasi-contract, or quantum meruit, the equitable remedy of restitution when unjust enrichment has occurred is an obligation (not a true contract) created by law without regard to the intention of the parties and is designed to restore the aggrieved party to his or her former position by returning the thing or its equivalent in money." A common claim that disregards the intent of the parties results in "an enlargement or enhancement based on state laws or policies external to the agreement."

Rodgers v. Beechcraft Corp., 2018 Westlaw 6615315 (10th Cir. 2018)

Personal injury and wrongful death action brought against aircraft manufacturer alleging a defective electrical distribution bus system and alternative landing gear as well as faulty instructions in flight manual. Trial Court entered summary judgment for defendant and Tenth Circuit affirmed.

Court applied principles applicable to expert disclosure and supplementation finding that experts were not properly qualified and did not have an adequate basis for their opinions.

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GENERAL AVIATION REVITALIZATION ACT (GARA)

Snider v. Sterling Airways, Inc., 2018 WL 6828422 (3d Cir. 2018)

Claimant alleged that the plane crash that killed her husband was caused by a defective cylinder assembly in the airplane’s engine. Defendant replaced the cylinder assembly in 2004 after purchasing the assembly from another party. After years of discovery, the case was tried to a jury. The claimant’s evidence showed that a defective exhaust valve guide in the cylinder assembly failed, which in turn caused the engine to stop thus causing the plane to crash. The jury returned a verdict for the claimant.

Third Circuit agreed with trial court that GARA did not preclude claim. Although defendant argued that GARA protected it from liability because it did not manufacture the exhaust valve guide in the replacement cylinder assembly and therefore did not manufacture any part on the airplane that was installed within eighteen years of the crash, Court disagreed. GARA’s eighteen year statute of repose did not shield defendant because there was evidence from which a jury could have found that defendant manufactured the cylinder assembly that was installed in 2004. The installation of the new cylinder assembly reset GARA’s eighteen-year bar.

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STATE LAW CLAIMS

NEGLIGENCE/"HILLS AND RIDGES" DOCTRINE
Lesh v. Erie International Airport Services, Inc., 2018 WL 6595929 (Pa. Comm Ct. 2019)

Appeals Court affirmed grant of summary judgment for airport authority and services contractor.

Claimant was customer services agent for airline at defendant’s airport. After the passengers boarded a certain flight, she walked down the jet way to exchange paperwork with the aircraft's captain. Claimant noticed that the ground power unit (GPU), a power cord running from the aircraft to the jet bridge, had not been unplugged. She walked down the jet bridge stairs to the outside ramp, and then walked under the jet bridge to the nose of the aircraft to get the captain's authorization to unplug the GPU. The captain gave his approval, and she walked approximately ten steps to the GPU and unplugged it. After taking a step or two away, she slipped on ice and fell. Claimant suffered multiple fractures to her tibia and fibula; she underwent three surgeries; and was subsequently diagnosed with reflex sympathetic dystrophy. The claim was for negligence in allowing for ice and slippery conditions at the scene of the fall.

Appeals Court affirmed determination that defendant authority did not have control and possession of area of fall at time of incident precluding liability. The terms of the lease reflected that defendant authority did not have the "intent to control" the area. Rather, the lease agreement stated that the airline was required "at all times [to] maintain its exclusive leased areas, the ramp under and around its aircraft when in use by it, and the areas immediately adjacent to either, in a neat, clean, safe and orderly condition." Moreover, there was no dispute that the aircraft was parked at the gate overnight, and claimant admitted that defendant’s employees were limited in their access to the area for snow and ice removal when the aircraft was at the gate.

Court also found no error in finding claim barred by the "hills and ridges" doctrine. The "hills and ridges" doctrine protects an owner or occupier of land from liability under Pennsylvania law for generally slippery conditions resulting from ice and snow where the owner has not permitted the ice and snow to unreasonably accumulate in ridges or elevations. A claimant must show: (1) that snow and ice had accumulated on the sidewalk in ridges or elevations of such size and character as to unreasonably obstruct travel and constitute a danger to pedestrians travelling thereon; (2) that the property owner had notice, either actual or constructive, of the existence of such a condition; and (3) that it was the dangerous accumulation of snow and ice which caused the plaintiff to fall.

Held that claimant’s own testimony established that defendant authority did not permit ice to unreasonably accumulate in ridges or elevations that caused her to fall and that the ice on which she fell was not a "localized, isolated patch."

PILOT INDEMNIFICATION-DRUG TESTING
Pasternack v. Northeastern Aviation, Inc., 2018 WL 5895827 (Chancery Del. 2018)


A pilot for an aircraft charter and management company sought indemnification of legal fees and expenses which arose in connection with the pilot's participation in random drug testing.

The regulations governing the operations of the charter company required that the charter submit a random selection of its pilots for drug testing. The charter informed the pilot that he had been randomly selected. The pilot reported, as instructed, to the testing site and provided a sample, but the volume was insufficient to complete testing. Rather than waiting at the testing site until he could provide an adequate sample for testing, the pilot informed the drug test collector that he needed to attend an appointment but would return to complete the testing. The pilot left, and he returned a few hours later to complete the test. With the permission of the aircraft company, the collector resumed the test. The pilot's test results were negative for drugs, but the medical review officer determined that the pilot refused to take the test by leaving before the test was complete, resulting in an automatic failure of the drug test. As a result, the Federal Aviation Administration issued an emergency order and revoked the pilot's certificate to fly. The pilot challenged this finding through two levels of appeal. In the final resolution of the case, the Court of Appeals for the D.C. Circuit held that there was insufficient evidence to determine whether the collector gave the pilot permission to leave and reversed the revocation. 

Pilot sought indemnification under defendant charter company’s by-laws which provide for mandatory indemnification for directors, officers, employees, and agents to the extent permitted by the Delaware law. Held that pilot was an agent of the charter company, that he took the drug test by reason of his affiliation with the charter company, and that he acted in good faith and in a manner, at the very least, not opposed to the best interests of the charter company. As such, pilot was entitled to indemnification.

ATTORNEY’S FEES
Eagle Jets, LLC v. Atlanta Jet Inc., 347 Ga. App. 567 (2018)

Helicopter purchase agreement did not allow broker to recover attorney fees incurred by broker in litigating against non-contract claims brought by buyer, which had unsuccessfully sought to recover following helicopter's crash during its delivery flight; agreement's fee provision was triggered only when litigation was instituted to enforce the agreement.

An attorney-fee award must be limited to those fees attributable to the claim or claims upon which fees are authorized, i.e., a party is entitled to recover attorney fees only for that portion of the fees which are allocable to the attorney’s efforts to prosecute the cause of action on which the prayer for attorney fees is based. An exception to the requirement that an attorney-fee award must be limited to those fees attributable to the claim or claims upon which fees are authorized arises where the various claims are so similar that it would be too difficult to separate the hours spent on each.

Held that Trial court did not properly exercise its discretion in determining that helicopter buyer's unsuccessful contract and non-contract claims were closely intertwined and not easily capable of being distinguished so as to warrant awarding aircraft broker $1,697,526.25 in attorney fees, which was the full amount of fees that broker requested following buyer's unsuccessful litigation against it over helicopter's crash during its delivery flight. Court found remand was required as broker did not indicate which fees were associated with which of buyer's multiple claims, broker failed to articulate why at least some portion of its legal bill could not be attributed to work on non-contract claims, and trial court's fee order contained conflicting factual findings regarding the intertwinement of claims.

INSURANCE COVERAGE-OPEN PILOT WARRANTY
StarNet Insurance Co. v. Shepard Group, LLC., 2019 WL 126748 (W.D. Ark. 2019)

Dispute over whether insurance policy provided coverage where pilot killed and passenger injured following accident.

Liability coverage under the policy covered bodily injury and property damage, including passengers, and medical expenses including crew. An exclusion provided that the policy does not apply "[t]o any insured while the aircraft is in flight ... if piloted by other than the pilot or pilots designated in the Declarations." It was argued by insurer that the only pilots designated in the declarations was a Michael T. Shepard or a pilot who meets the "Open Pilot Warranty." As such, the policy does not apply where: (1) the aircraft is in flight; and (2) the aircraft is piloted by a person other than Michael T. Shepard or a pilot who meets the Open Pilot Warranty.

Argued by insurer that pilot at time of accident was not Mr. Shephard or who otherwise met the Open Pilot Warranty. Court held that the policy did not provide coverage as exclusion applied as the undisputed evidence showed that pilot failed to log the requisite number of pilot hours required under the Open Pilot Warranty requirements.

 

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