1. In this article the relationship between PANAM and PANAM passengers and KLM and KLM passengers is characterized as a contractual one. Under the law of Canada and the USA there may also be certain tort aspects, in those cases where the air carrier is held to be a common carrier, see Shawcross and Beaumont on Air Law vol 1, 1977Google Scholar no. 379–387, Common carriers are carriers who offer their services to anyone who wishes to make use of their services. The emphasis lies on the general offer to the public at large, the contractual element is minimal. Common carriers must exert the utmost care and caution for the protection and safety of their passengers. If they are in default of that duty, they are liable for negligence, which is a tort action, see Prosser, , Law of Torts, 1971 p. 180.Google Scholar

2. The term “Dutch cases” refers to cases filed by Dutch citizens, i.e., the heirs of the KLM passengers and KLM crew. The term “American cases” refers likewise to cases filed by American citizens, i.e., the PANAM passengers and crew or their heirs.

3. However, in the Dutch Van Vliet case KLM had been joined as a defendant, but suit was nevertheless filed in a federal court.

4. 29 December 1972, 368 F.Supp. 812 (JPMDL 1973).

5. 31 July 1973, 372 F. Supp. 1406 (JPMDL 1974). In this case only 2 suits had originally been filed in Massachussetts.

6. 1 December 1974.

7. 343 F. Supp. 1951 (1972).

8. 342 F. Supp. 907 (1971).

9. The preference for California was shared by one of the defendants, Boeing.

10. However, at that time 38 suits had been initiated in New York state courts, whereas only a few in Californian state courts.

11. Re Petroleum Products Antitrust Litigation, 407 F Supp. 249, 252 (JPMDL 1976). This case was, in fact the only instance of a retransfer; the addition of new litigation, not previously contemplated by the Panel, constituted in that case “unique circumstances”.

12. Cf., Speiser, Stuart M., “Dynamics of Airline Crash Litigation: What makes the case move”, JALC, 1977, p. 565Google Scholar. The author is an attorney at law specialized in multi-district litigation. He was also actively engaged in the Tenerife litigation. Mr. Krause, partner of Mr. Speiser, had been designated chairman of the plaintiff's committee.

13. The truism that lawyers like big cases seems to be equally true for judges.

14. Several Dutch relatives were initially reluctant to request or to receive compensation, when no financial loss had been suffered. Eventually these relatives too accepted compensation; some of them donated the amounts received to charities.

15. Royal Cruise Line is a 100% PANAM subsidiary. Holland International – the Dutch tour operator and a 50% subsidiary of KLM – was not named as a defendant.

16. It appeared that this was also the true reason for suing Spain in the USA: to enable plaintiffs to subpoena documents relating to the air crash in the possession of the Spanish Government.

17. Cf., the leading cases International Shoe v. Washington, 326 US 310 (1945), and Perkins v. Benguet Consolidated Mining Comp., 342 US 437 (1952). See also Restatement 2d section 47(2).

18. Section 3(1) of the Warsaw Convention and section 2 of the Montreal Agreement oblige the carrier to issue a ticket to the passengers advising them, inter alia, that the transport agreement is subject to the provisions of the Warsaw Convention and its limitations. The reference to the latter, however, is aimed at limitations of liability and recovery, not on jurisdiction, see section 3(2) Warsaw Convention; cf., Biggs v. Alitalia, 10 Avi. 18354 EDNY 1969 and Karfunkel v. Air France, 14 Avi. 17674 SDNY 1977.

19. The problem in charterflight situations is that the actual carrier is not directly privy to the contract of carriage, which is concluded between the charterer/tour operator and the passenger. Uncertainties on this point were resolved by the Guadalajara Convention of 1961 which gives the actual carrier the same protection as the contracting carrier. The Netherlands is a signatory to this Convention but Spain and the USA are not. See for this and similar types of situations du Perron, A.E., Paardesprongen en bokkensprongen in de lucht, reeks studiekring Drion, Kluwer, 1978Google Scholar. Block v. Air France, 8 Avi 18, 335 N.D. GA 1964.

20. Lisi v. Alitalia, 370 F. 2d 508 (2d Circ. 1966).

21. 555 F. 2d 1079 (2d Circ 1977). See for a review of this case Gallagher, Michael R. and Stephens, Alton L., “Recent Developments in Aviation Case Law”, 44 JALC 231, 244 (1978)Google Scholar, and King, Stuart W., “Case Notes”, 44 JALC 175 (1978)Google Scholar. The case resulted from the Ionean Sea disaster, transferred under s.1407 tc a New York court.

22. See for this topic Stuart M. Speiser, loc.cit.

23. The statute of limitation of California provides for a period of 1 year, that of New York for a period of 2 years. The hearing, in which this matter was discussed and in which the ruling was given, was held on 13 January, 1978, nearly 10 months after the crash.

24. The share of each party to the agreement was, as usual, not disclosed, but is believed to be 40%, 30%, 20% and 10% respectively.

25. Initially PANAM and KLM had taken a different position. Immediately after the collision they intimated that loss and injury had to be proven and that they would invoke the contractual limitation of liability according to the Montreal agreement of $ 58.000 or $ 75.000 inclusive of attorneys' fees. One plaintiff argued that the wording of the tickets, containing references to amounts of $ 58.000 and $ 75.000 and to matters of insurance, could only be construed to mean that the carriers had committed themselves to pay out these amounts in full without proof of loss. This really amounts to the contention that the carriers had taken out some kind of insurance coverage to the effect that these amounts would be paid out in a lump sum irrespective of the actual loss; certainly an imaginative but incorrect inference. Nevertheless, this was in fact what subsequently happened. PANAM and KLM agreed to automatically pay the maximum amount of $ 58.000 or $ 75.000 per passenger seat to the surviving passenger or the surviving relatives without requiring proof. This resulted in anomalies: whereas one single surviving relative who had suffered little or no financial loss received x time the maximum amount corresponding to the number of relatives killed, other families of several financially dependent relatives received only one time the maximum amount if only one relative had been killed. Eventually defendants committed themselves to pay $ 58.000 or $ 75.000 per passenger seat in any event and to pay more if plaintiffs could produce evidence of loss in excess of these amounts.

26. Van Dusen v. Barrack, 376 US 612 (1964). In this leading case it was held that the transferee court must apply the law that would have been applied by the transferor court, including its conflict rules.

27. I.e., the law of the domicile of the plaintiff, if the plaintiff was a surviving passenger or crew member, or the law of the decedent in the event that the passenger or crew member had died and consequently the heirs acted as plaintiffs.

28. Cf., Re Paris Air Crash 399 F. Supp 732 (1975). This case, in which the vast majority of suits were filed in California, shows a great resemblance to the Tenerife case. On the issue of compensatory damages Californian law was held to apply irrespective of the domicile of plaintiffs. In Hurtado v Superior Court, 114 Cal. Rptr. 106 (1974), Californian law was applied granting full recovery for the plaintiff, whereas his domiciliary law (the state of Zacatecas, Mexico) contained limitations.

29. In addition, attorneys for plaintiffs agreed to a lower percentage of their contingency fees in case of settlement out of court.

30. All agreements contained a revised (i.e., leaving more room to manoevre) version of stipulation 6 relating to the determination of the conflict of laws issue on damages by Judge Ward in the event that parties could not reach agreement on this point. As mentioned in par. 3 of this section parties did eventually agree that compensatory damages were to be governed by the law of the domicile of the plaintiff, respectively decedent, so that the stipulation did not require any further implementation. See, however, for the limited practical consequences of this determination for the Dutch claims infra, 9.2.

31. See for this topic: McGilchrist, Neil R., “Punitive Damages in Aviation Litigation,” Lloyd's Maritime and Commercial Law Quarterly, 02 1979, p. 48Google Scholar. The author reviewed a number of recent air crash cases in the USA. His conclusion was that, whereas awards for punitive damages are occasionally given in relatively small cases, in which obvious and inexcusable defects in design or manufacture can be shown, no such awards have been given in mass air crash disasters. But cf., Donelly, Daniel, “The importance of the Exemplary Award Issue in Aviation Litigation”, JALC 1976, 825Google Scholar, who believed that the number of such claims will increase in future and that they are a useful instrument in correcting certain anti social behavior.

32. Doralee Estates Inc. v. Titus Service Oil Company, US Court of Appeals 2 Circ. December 12, 1977.

33. Both New York and California do not allow punitive damages in wrongful death cases. Judge Peirson Hall, the Californian transferee judge in the Paris Air Crash case could not accept that distinction on the ground of the constitutional Equal Protection Clause.

34. It was not disputed that Judge Ward, as a transferee judge, should apply the choice of law rules of Massachussetts, not of New York.

35. The situation described here occurred in the 7th and 8th hearing.

36. By virtue of Section 1(2) of the Montreal Agreement, which determines the contractual relationship between Panam and the Panam passengers, Panam could not avail itself of the exculpatory clauses of the Warsaw Convention, laid down in section 20(1). Hence, between these parties liability or fault was not an issue.

37. Ms. Bouvy, the decedent, was a KLM employee but uncertainty existed as to whether she was actually a member of the crew on that particular flight or whether she was travelling for private purposes. Whatever the precise situation was the plaintiffs had decided not to sue KLM because of the employer-employee relationship, which would have generated additional problems with respect to jurisdiction and recovery.

38. 266 NYS 2d 513, 213 NE 2d 796 (1965).

39. (1975) DCNY F. Supp. 31. The case arose out of a crash that occurred in Florida.

40. 330 US 501, 508 (1947).

41. Here the court cited Farmanfarmaian v Gulf Oil Corp., 437 F. Supp. 910, 914 (SDNY 1977), where it was held that the fact that defendants are New York domiciliaries is not alone sufficient to warrant the Court's retention of an action.

42. Cf., Gordon v. Eastern Air Lines (note 31). It is remarkable that, in as far as could be ascertained, this decision was not cited by Panam of by Judge Ward.

43. Cf., Restatement s.129 (mode of trial), s.137 and s.138 (admission of witnesses and evidence).

44. It should be borne in mind that the law of the domicile of the plaintiff, respectively of the decedent determines the elements of damages, but also, as a preliminary question, who may claim compensation. Leaving aside claims founded on survival acts, in which the representative of the estate is the proper plaintiff on behalf of the estate, such claims are usually based on wrongful death acts. These acts designate the beneficiaries that have a cause of action.

45. Cf., Kohn v. Alleghany Airlines, 504 F 2d 400 (7th Circ. 1974).

46. However, Drion, H. in his book Limitation of Liabilities in International Air Law, 1954Google Scholar, no's 92–94, submits that the carrier can avail himself of the limitations of liability under the Warsaw Convention in actions for contribution brought by joint tortfeasors. The basis for this submission is found in the wording of s.24 of the Warsaw Convention providing that “any action for damages, however founded (talics, R.B.), can only be brought subject to the conditions and limits set out in this Convention”. See for the same proposition Shawross and Beaumont, op.cit., no. 453; no authorities in support of this submission are cited.

In the example given in the text the actual result then would be that the former defendant cannot recover $ 900,000 from the latter defendant/contracting carrier but only $ 58,000 or $ 75,000 respectively. Hence the 10% defendant, compared to the 90% defendant, is eventually left to bear the larger part of the loss, which is a most awkward and unjustifiable consequence of this proposition. Defendants that have a contractual relationship with the carrier, such as manufacturers of aircraft and component parts, are usually in a position to protect themselves against this contingency by inserting indemnity clauses in their contracts with the carriers. When no contractual relationship between defendants exists, as is the case between carriers in the event of a collision, the consequences of such a contingency cannot be regulated. It seems that this injustice can only be remedied through a general agreement among carriers not to invoke the Warsaw limitations in proceedings for contribution brought by fellow carriers or through a specific exclusion from the operation of the limitation in this type of action in s.24 of the Convention.

A general study on this subject, but geared to English law, is contained in Williams, Glanville' Joint Torts and Contributory Negligence, 1951Google Scholar. Sections 33 and 46 deal with contribution against parties who could not have been made to pay damages to the injured party or who have limited their liability, and indemnity clauses.

47. See n. 26.