Recent Developments in U.S. Montreal Convention Case Law, Part I

In the past few years, cases involving personal jurisdiction over a defendant under the Montreal Convention and disputes over the convention’s preemptive effect have been “hot topics,” as U.S. courts have become increasingly intolerant of plaintiff attempts at artful pleading around the convention’s preemptive effect and plaintiffs’ failure to seek redress in the correct jurisdiction. This article, the first of two addressing recent Montreal Convention case law, examines those topics.

In one recent case, the U.S. District Court for the Central District of California dismissed a plaintiff’s claims against an airline and the airline’s holding company, arising from an alleged sexual assault the plaintiff suffered on an international flight from Los Angeles, for lack of personal jurisdiction over the holding company and because the claims against the airline were preempted by the convention. Doe v. Compania Panemena de Aviacion, No. CV-21-2536, 2021 WL 3012849 (C.D. Cal. July 14, 2021) [subscription required].

According to the plaintiff’s complaint, she was sexually assaulted by an adjacent passenger almost immediately after sitting, was denied a seat change, was attacked again, was then given a seat change but was still visible to the alleged assailant, who continued to terrorize the plaintiff for the rest of the flight and afterward, when the plaintiff was forced to wait near him.

The plaintiff filed her complaint in Los Angeles County Superior Court against the airline, its holding company, and the alleged assailant. She brought several causes of action against the alleged assailant, but only two causes of action against the airline and its holding company: intentional infliction of emotional distress and negligence. Both airline defendants removed the case to the U.S. District Court for the Central District of California and then moved to dismiss on separate grounds.

The holding company moved to dismiss because there were no grounds on which the court could exercise personal jurisdiction over it. It explained that while the Montreal Convention provided the plaintiff her exclusive source of remedy, it does not in and of itself confer personal jurisdiction over a putative defendant. The plaintiff countered that personal jurisdiction could be asserted by imputing the airline’s actions to its holding company and that the court therefore had both specific and general personal jurisdiction under agency and alter ego theories.

Dismissing the agency theory, the court rejected the plaintiff’s argument that general jurisdiction could be asserted because the U.S. Supreme Court rejected that proposition in the well-known case of Daimler AG v. Bauman, 571 U.S. 117, 136 (2014). The Supreme Court left open the question of whether specific jurisdiction could be asserted under agency theory, but here the court noted that the Ninth Circuit has expressed serious doubt over whether specific jurisdiction could be obtained via agency theory in Williams v. Yamaha Motor Co., 851 F.3d 1015, 1024 (9th Cir. 2017), and that it was unable to find any case in the Ninth Circuit holding that agency theory permitted the assertion of specific jurisdiction following Williams. With ownership being the plaintiff’s only jurisdictional allegations against the holding company, the court rejected agency as a basis for personal jurisdiction. The same facts also failed to establish personal jurisdiction over the holding company under an alter ego theory. Mere ownership and sole management, even if proven, were insufficient to establish personal jurisdiction.

In addition, an argument to subject the holding company to personal jurisdiction under the “exceptional case” theory set forth in Daimler failed. While a court could exercise personal jurisdiction over a foreign defendant under certain undefined “exceptional” circumstances, such circumstances do not depend on whether the conduct alleged is egregious; rather, they depend on the extent of the defendant’s connection to the forum. Because the court found the jurisdictional facts lacking under the agency and alter ego theories, it also concluded that no “exceptional case” existed. Thus, the holding company was dismissed without jurisdictional discovery because the plaintiff’s jurisdictional allegations were no more than a hunch, backed by no proper supporting evidence.

The court then addressed preemption of the plaintiff’s claims against the airline under the Montreal Convention. The court found preemption, largely because the plaintiff did not contest preemption in her opposition to the defendants’ motion to dismiss, resulting in waiver. Nor was it likely that the plaintiff could have defeated the preemption argument anyway, given the nature of her allegations.

Finally, the court considered whether it should grant the plaintiff leave to amend her complaint to set forth viable causes of action against the airline entities. Because the plaintiff brought solely state law claims, the court held that amendment would be futile given the preemptive effect of the Montreal Convention, even if jurisdiction existed. Moreover, the convention’s statute of limitations already had run and is not subject to equitable tolling, meaning that any amendment would be untimely. Both airline entities were dismissed without leave to amend, and the case against the alleged assailant was remanded to state court.

Another recent case clarified that, while the Montreal Convention confers subject matter jurisdiction over a plaintiff’s suit arising from injuries sustained while disembarking after a flight to and from destinations abroad within a signatory nation, it does not confer personal jurisdiction over a defendant airline absent an injury arising from the carrier’s activities specifically directed at the forum jurisdiction. Davydov v. Scandinavian Airlines Sys., No. 2:19-cv-17628-MCA, 2020 WL 12979368 (D.N.J. Oct. 5, 2020) [subscription required].

In Davydov, the plaintiff sought to recover damages arising from a personal injury sustained when he fell down a staircase while disembarking after a flight that originated in Sweden and landed in Estonia. The plaintiff sought to establish both subject matter jurisdiction and personal jurisdiction over the defendant carrier in New Jersey through Article 33(2) of the Montreal Convention, although the court explained that while other courts have consistently found that Article 33(2) confers subject matter jurisdiction over a defendant carrier, it does not confer personal jurisdiction.

The plaintiff had not alleged that the court had general personal jurisdiction over the defendant carrier, so the court analyzed only whether the Montreal Convention conferred specific personal jurisdiction over the carrier. Specific personal jurisdiction requires that a nonresident defendant purposefully direct its activities at the resident forum and that the injury alleged arise from or relate to those activities. The plaintiff, who bears the burden of proving personal jurisdiction, argued that jurisdiction existed because (1) the defendant carrier regularly conducted flights to and from Newark Liberty International Airport in New Jersey and (2) publicly advertised its newly renovated lounge in that airport.

The district court did not reach whether the defendant carrier purposely directed its activities at New Jersey because the plaintiff’s injuries did not arise from or relate to any of the defendant carrier’s New Jersey contacts; rather, the incident entirely involved conduct that occurred overseas—on a flight between Sweden and Estonia, while the ticket for carriage was purchased through a Ukrainian travel agency using Ukrainian currency. The plaintiff was a Florida resident and did not contend that he relied on or even knew of the renovated lounge in New Jersey or that the subject trip in any way related to New Jersey.

The plaintiff offered two arguments to circumvent the obvious lack of connection to New Jersey. First, the plaintiff argued that his claim “related to” the defendant carrier’s operations in Newark Airport by reason of Montreal Convention Article 33(2). Second, the plaintiff argued that the carrier consented to personal jurisdiction in New Jersey by incorporating Article 33(2) of the Montreal Convention into its Conditions of Carriage, the contract for travel executed by the plaintiff and defendant. The court dismissed both arguments because Article 33(2) of the convention confers only subject matter and not personal jurisdiction. The mere existence of the Montreal Convention could not short-circuit the personal jurisdiction analysis to provide “constitutionally sufficient” contacts in U.S. courts. In the same regard, the Contract of Carriage demonstrated only that the defendant carrier consented to subject matter, but not personal, jurisdiction in the District of New Jersey. The case was therefore dismissed.

Another recent case, New Fortune Inc. v. Apex Logistical Int’l (CN) Ltd. & Aeroflot Airlines, No. 20-cv-4883, 2021 WL 309850 (S.D.N.Y. Jan. 29, 2021), aff’d, New Fortune Inc. v. Apex Logistics Int’l (CN) Ltd., No. 21-262-cv, 2021 WL 5499464 (2d Cir. Nov. 24, 2021) (summary order) [subscription required], demonstrated the significant breadth of Montreal Convention preemption. There, the plaintiff purchased products overseas and hired the defendant, a freight forwarder, to transport them to the U.S. The defendant was instructed to ship the products to the United States and complete the delivery within two days. Allegedly, half of the shipment was diverted through another carrier’s indirect route, leading to both extensive delay and damage to that part of the shipment.

The plaintiff sued both the carrier and the freight forwarder, alleging state law claims for breach of contract, negligence, and breach of bailment. The defendants raised preemption because the claims were within the substantive scope of the Montreal Convention—i.e., delay of and damage to cargo during international air transportation—and therefore were preempted. The district court agreed and dismissed the complaint with prejudice.

The Second Circuit affirmed. The court of appeals explained that the Montreal Convention, like its predecessor the Warsaw Convention, “‘created a comprehensive liability system to serve as the exclusive mechanism for remedying injuries suffered in the course of the international transportation of persons, baggage, or goods performed by aircraft.’” New Fortune Inc., 2021 WL 5499464, at *1. Thus, the Montreal Convention governs all claims arising within the scope of the convention, even those styled as state law claims.

The court then reviewed “the Convention’s liability provisions” to determine whether the activity in question was within the substantive scope of the convention; that is, whether it was “‘part of the carriage of passengers and baggage’ and goods.” Id. at *2. The court first held that the claims fell within Article 19 of the Montreal Convention, which governs claims for damages caused by delay in cargo. The court rejected the argument that the claim was actually for “nonperformance”—which is not governed by the Montreal Convention—because the cargo ultimately was delivered (courts hold that a claim for breach of contract sounds in nonperformance, as opposed to delay, only when the carrier ultimately does not provide the transportation). Id.; see also Vumbaca v. Terminal One Grp. Ass’n, L.P., 859 F. Supp. 343, 366 (E.D.N.Y. 2012)).

Next, the court held that any claim for physical damage to the consignment was governed by Article 18 of the Montreal Convention, reasoning that Article 18 renders a carrier liable for damage to cargo that took place during “carriage by air.” New Fortune Inc., 2021 WL 5499464, at *2. “Carriage by air” is defined as “the period during which the cargo is in the charge of the carrier,” and it includes carriage on land that “takes place in the performance of a contract for carriage by air, for the purpose of loading, delivery or transshipment.” Id. Because the plaintiff had not alleged claims under Articles 18 and 19 of the convention, the Second Circuit concluded that the district court properly dismissed the complaint with prejudice. Id.

Finally, the plaintiff challenged the district court’s failure to sua sponte grant it leave to amend its complaint. The Second Circuit rejected that argument as well, holding that because the plaintiff had pled jurisdiction under the Montreal Convention in its complaint but did not request leave to amend when briefing the motion to dismiss before the district court, the district court had no obligation to allow amendment on its own initiative. Id. at *2–3.

The brief opinion in Ong v. American Airlines, Inc., No. 3:21-CV-421-L, 2022 WL 447082 (N.D. Tex. Feb. 14, 2022), gave short shrift to the arguments against preemption already repeatedly rejected in other Montreal Convention cases throughout the country, demonstrating again that courts do not take attempts to plead around the convention’s preemptive effect seriously. The plaintiff filed a state court action alleging that, after she boarded a flight covered by the convention, she tried to move to a seat that she admittedly did not purchase, which led to an altercation and the plaintiff’s removal from the flight. The plaintiff claimed racial discrimination and sought emotional distress damages for the airline allegedly calling her a terrorist, as well as various other damages.

American Airlines removed the case to federal court, based on treaty jurisdiction, and then moved to dismiss pursuant to Rule 12(b)(6). See, e.g., United States v. Yousef, 327 F.3d 56, 96 (2d Cir. 2003) (recognizing the Montreal Convention is a treaty of the United States). The court reiterated the familiar holding that the Montreal Convention provides the exclusive remedy for all injuries that occur onboard a flight or in the process of embarking or disembarking, whether or not the injury alleged is compensable under the convention. In Ong, the plaintiff’s injuries, however characterized, occurred onboard the subject flight and, because she was removed from the flight, during disembarkation. The claim for emotional distress and other demands, such as for court costs, were not recoverable under the Montreal Convention, which limits claims in these circumstances to death or bodily injury, neither of which the plaintiff alleged. Thus, preemption barred all claims. Moreover, the plaintiff’s claims were so far afield from what the convention allows that the court denied amendment and dismissed with prejudice, despite the plaintiff being pro se.

Collectively, these four recent cases demonstrate that, when plaintiffs sue airlines seeking damages arising from an international flight covered by the Montreal Convention, they must pay close attention to the convention’s strictures—actions must be brought in a court with personal jurisdiction over the defendant carrier and must seek only damages that the convention allows, not other damages allowed under state law. Otherwise, plaintiffs risk having their case thrown out by a district court judge who won’t be fooled by clever pleading.

Evan Kwarta is a partner with Condon and Forsyth LLP in New York, New York.

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