U.S. Court of Appeals for the Second Circuit, Indemnity Insurance Company of North America v. Unitrans International Corporation, Docket No. 21-2132

International Treaty and Other International Agreements

 

Interpretation

 

 

 

(…) Though the Montreal Convention does not further define “contracting carrier,” the President included a “detailed article-by-article analysis” of its text – prepared by the Secretary of State – when transmitting the treaty to the Senate. See Cong. Rsch. Serv., Treaties and Other International Agreements: The Role of the United States Senate 118 (2001) (explaining how “all treaties are transmitted to the Senate in the President’s name” and are typically accompanied by a letter from the Secretary of State that provides a “detailed description and analysis of the treaty”), 

https://www.govinfo.gov/content/pkg/CPRT-106SPRT66922/pdf/CPRT-106SPRT66922.pdf

[https://perma.cc/JX6P-CX4W].

 

 

 

(U.S. Court of Appeals for the Second Circuit, April 4, 2024, Indemnity Insurance Company of North America v. Unitrans International Corporation, Docket No. 21-2132)

 

U.S. Court of Appeals for the Second Circuit, Indemnity Insurance Company of North America v. Unitrans International Corporation, Docket No. 21-2132

 

Subrogated Claims for Damage to Cargo

 

Contracting Carrier under the Montreal Convention

 

Contracting Carrier and Actual Carrier

 

Freight Forwarder

 

Principal and Agent

 

Carriage by Air

 

Air Waybill and House Waybill

 

Insurance Law

 

Transportation Law

 

Export

 

 

 

Indemnity Insurance Company of North America (“Indemnity”) appeals from the district court’s grant of summary judgment in favor of Unitrans International Corporation (“Unitrans”) on Indemnity’s subrogated claims for damage to cargo that occurred while the cargo was being unloaded from a truck at an airport. The district court (Pollak, M.J.) granted Unitrans’s motion for summary judgment on the grounds that Unitrans – a logistics company – qualified as a contracting carrier under the Montreal Convention and that Indemnity’s action was therefore time-barred by the Convention’s statute of limitations. Although we agree that contracting carriers are subject to the Montreal Convention, we find that there is a genuine dispute of material fact as to whether Unitrans was a contracting carrier. Accordingly, we vacate the judgment and remand the case for further proceedings.

 

 

In July 2014, Amgen, Inc. (“Amgen”), subrogor of plaintiff-appellant Indemnity Insurance Company of North America (“Indemnity”), engaged defendant-appellee Unitrans International Corporation (“Unitrans”) to arrange for the transportation of three pallets of Enbrel, a pharmaceutical drug (the “Cargo”), by motor and air carriage from Amgen’s facility in Dublin, Ireland to Philadelphia. On July 28, 2014, while Unitrans’s agent was delivering the Cargo to the air carrier at the airport, one of the pallets fell and was damaged. As a consequence, the entire shipment was returned to Amgen’s facility in Dublin, and the damaged pallet was declared a total loss.

 

 

Indemnity, as Amgen’s insurer, paid Amgen’s claim for the loss of the pallet and, as subrogee to Amgen’s rights, sued Unitrans for breach of contract, negligence, and breach of bailment. Unitrans moved for summary judgment, arguing that the Montreal Convention – which preempts all state law claims within its scope – governed Amgen’s claim. See Convention for the Unification of Certain Rules for International Carriage by Air, May 28, 1999, T.I.A.S. 13038, 2242 U.N.T.S. 309 (entered into force Nov. 4, 2003) (“Montreal Convention”). The United States District Court for the Eastern District of New York (Pollak, M.J.) granted summary judgment in Unitrans’s favor, concluding that the Montreal Convention applied and that the action was therefore barred by its two-year limitations period. This appeal followed.

 

 

Though we hold that the Montreal Convention applies to contracting carriers, we find that there remains a genuine factual dispute as to whether Unitrans qualifies as a contracting carrier. Accordingly, we vacate the judgment of the district court and remand the case for further proceedings.

 

 

(…) At Dublin Airport, while the TLC driver was removing the Cargo from the truck to deliver it to US Airways’s ground handling agent, one pallet fell off the truck and was damaged. The Cargo was returned to Amgen’s facility, and the damaged pallet was declared a total loss of over $1.8 million. Indemnity paid Amgen’s claim for the total loss and became fully subrogated to Amgen’s rights.

 

 

(…) The principal legal issue presented is whether the Montreal Convention applies only to damage that occurs while cargo is in the charge of an actual carrier. Indemnity urges us to adopt this narrow construction of the Montreal Convention, which would place its claims outside of the Convention given that Unitrans merely arranged for the Cargo’s transportation through third-party carriers and was not itself an actual carrier. We reject Indemnity’s legal argument and hold that the Montreal Convention extends to “contracting carriers” when cargo is damaged in international carriage while in their charge. Nevertheless, because there remains a genuine factual dispute over whether Unitrans qualifies as a “contracting carrier,” we conclude that the district court should not have granted Unitrans’s motion for summary judgment.

 

 

(…) As relevant here, Article 18 of the Convention, which covers damage to cargo, provides that a carrier is liable for damage to cargo if “the event which caused the damage . . . took place during the carriage by air.” Montreal Convention art. 18(1). “Carriage by air . . . comprises the period during which the cargo is in the charge of the carrier.” Id. art. 18(3). Significantly, “carriage by air” can encompass periods when the cargo is not “actually aboard an airplane,” Underwriters at Lloyds Subscribing to Cover Note B0753PC1308275000 v. Expeditors Korea Ltd., 882 F.3d 1033, 1040 (11th Cir. 2018), but does not cover “carriage by land . . . performed outside an airport,” Montreal Convention art. 18(4); see also Underwriters at Lloyds, 882 F.3d at 1040.

 

 

(…) Taken together, these provisions make clear that a “contracting carrier” – that is, a company that arranges for the international transportation of cargo by engaging third-party carriers such as airlines and truckers to perform the actual carriage – is a “carrier” for purposes of the Montreal Convention if, as a principal, it enters into the contract of carriage with a consignor.

 

 

(…) Article 40 plainly provides that when an actual carrier performs the whole or part of carriage, both the contracting carrier and the actual carrier are subject to the Montreal Convention – the actual carrier solely for the carriage it performs and the contracting carrier for “the whole of the carriage contemplated in the contract.” Montreal Convention art. 40; see also id. art. 1(4). Thus, a contracting carrier, as defined by Article 39, is subject to the rules of the Montreal Convention, including Article 18. See A.S.A.P. Logistics, Ltd. v. UPS Supply Chain Sols., Inc., 629 F. Supp. 3d 42, 46 n.3 (E.D.N.Y. 2022).

 

 

(…) We likewise reject Unitrans’s contention that carriage by air is a “term of art” applying to all damage occurring within the premises of the airport and that, therefore, the Montreal Convention applies here because the Cargo was damaged while it was at the airport. Unitrans Br. at 12, 14. The text of the Montreal Convention does not support the contention that any damage that occurs at an airport occurs during carriage by air, regardless of whether the cargo is in the charge of the carrier. As the Eleventh Circuit has explained, the Montreal Convention provides that a carrier is liable only for damage sustained during “carriage by air,” which is “the period during which the cargo is in the charge of the carrier,” except when the cargo is transported on the ground outside an airport. See Underwriters at Lloyds, 882 F.3d at 1040–42 (quoting Montreal Convention arts. 18(1), (3)–(4)). None of our precedent, even under the Warsaw Convention, is to the contrary. See Victoria Sales Corp. v. Emery Air Freight, Inc., 917 F.2d 705, 706–08 (2d Cir. 1990) (holding that damage to cargo in the charge of a carrier that occurs outside of an airport does not occur during carriage by air, but not holding that all damage that occurs inside an airport occurs during carriage by air, regardless of whether the cargo is in the charge of the carrier); Com. Union Ins. Co., 347 F.3d at 464–68 (holding that, under Article 18(4), when the point of damage is unknown, carrier control over all portions of the journey is presumed, but not holding that, even if the point of damage is known, the cargo need not be in the charge of the carrier). Here, there is no question that the Cargo was damaged inside the airport, but there remains the issue of whether the Cargo was damaged while “in the charge of the carrier.”

 

 

There is no dispute that Unitrans was not the actual carrier because it did not perform and was not intending to perform any part of the carriage itself. Therefore, the Montreal Convention applies only if Unitrans was a contracting carrier under Articles 39 and 40. As discussed above and as relevant here, the Montreal Convention provides that a contracting carrier is a person that (1) as a principal (2) makes a contract of carriage governed by the Montreal Convention (3) with a consignor, and (4) an actual carrier performs the whole or part of the carriage by virtue of authority from the contracting carrier. See Montreal Convention art. 39. In general, a principal is “someone who authorizes another to act on his or her behalf as an agent” or “someone who has primary responsibility on an obligation.” Principal, Black’s Law Dictionary (11th ed. 2019).

 

 

Given the current factual record, we find that there remains a genuine dispute as to whether Unitrans was acting as a principal and, by extension, whether it qualifies as a contracting carrier. On the one hand, there is evidence indicating that Unitrans was acting as a principal because it took primary responsibility in making and executing the carriage contracts. Indeed, in Unitrans’s interrogatory responses, it stated that it “acted as a freight forwarder and an indirect air carrier with regard to the Cargo,” taking “responsibility for the care, custody, and control of the Cargo” “from the receipt of the Cargo at the Amgen facility.” J. App’x at 248; see also, e.g., id. at 81 (Unitrans employee stating that “air waybill 037-49058936 was issued for the door-to-door carriage of the Cargo on July 28, 2014”); id. at 225 (parties agreeing that Unitrans “entered into a contract with . . . Amgen . . . to transport the Cargo from Amgen’s facility in Dun Laoghaire, Dublin, Ireland to Philadelphia, Pennsylvania”); id. at 268 (Amgen listing Unitrans as a “carrier” in its internal invoices). A reasonable juror could take these statements to mean that Unitrans – acting as a principal with ultimate “responsibility” for the Cargo – made a contract with consignor Amgen to transport the Cargo internationally, and that Unitrans then subcontracted with US Airways. In this circumstance, Unitrans would have assumed the responsibility of a contracting carrier, while US Airways was set to perform the air carriage – as the “actual carrier” – by virtue of authority from Unitrans.

 

 

On the other hand, the record also contains evidence that paints Unitrans as an agent that merely set up an air-carriage contract between Amgen and US Airways. In this circumstance, Unitrans would not have been acting as a principal because it merely brokered the agreement while US Airways was obliged to perform the air carriage by virtue of its own authority. This view is supported by the fact that Unitrans presents itself as a “logistics company that arranges carriage of cargo on behalf of its customers,” which suggests that it acts as an “intermediary” that merely makes travel arrangements in the manner of a travel agent. Id. at 63, 70.

 

 

It remains unclear whether Unitrans (or MCL as its agent) ever issued a “house waybill” – which could further shed light on Unitrans’s role and responsibilities – and if so, what happened to it. See J. App’x at 80 (explaining that an “air waybill” is the waybill issued by the actual carrier while the “house waybill” is issued by the forwarder). (Fn. 9).

 

 

 

 

(U.S. Court of Appeals for the Second Circuit, April 4, 2024, Indemnity Insurance Company of North America v. Unitrans International Corporation, Docket No. 21-2132)

 

U.S. Court of Appeals for the Second Circuit, UPS Supply Chain Solutions, Inc. v. EVA Airways Corporation, Docket No. 21-2867

Personal Jurisdiction

 

Treaty Jurisdiction

 

Montreal Convention

 

International Convention

 

 

 

 

Appeal from the United States District Court for the Southern District of New York No. 20-cv-2818

 

 

Appellant UPS Supply Chain Solutions, Inc. was sued in the Southern District of New York and filed a third-party complaint against Appellee EVA Airways Corporation, seeking indemnification and contribution. The district court granted EVA’s motion to dismiss for lack of personal jurisdiction. UPS now appeals, arguing that EVA was subject to specific personal jurisdiction based on both New York’s long-arm statute and the Montreal Convention. We hold that UPS has failed to allege the in-state injury required for specific jurisdiction in New York, that the Montreal Convention does not confer personal jurisdiction, and that the record does not establish that EVA consented to personal jurisdiction in light of the Convention or its contract with UPS. Accordingly, we AFFIRM.

 

 

The Montreal Convention, a multilateral treaty which entered into force in 2003, governs claims arising out of the international transportation of persons, baggage, and cargo by air.1 The treaty includes jurisdictional articles providing where such claims can be brought. This appeal presents a question of first impression: whether the Montreal Convention confers personal jurisdiction.

 

1 Convention for the Unification of Certain Rules for International Carriage by Air, May 28, 1999, T.I.A.S. No. 13,038.

 

 

In particular, we must determine whether by enabling actions arising under the treaty to be brought in the courts of certain countries, the Montreal Convention provides those courts with personal jurisdiction over the parties. Consistent with our decisions interpreting the Montreal Convention’s predecessor, we conclude that it does not. The Montreal Convention’s jurisdictional provisions place a limit on when courts of the United States, as opposed to courts of other signatory nations, may exercise jurisdiction over a claim arising under the treaty. Under U.S. law, this is referred to as treaty jurisdiction, which is a form of subject-matter jurisdiction. The Montreal Convention does not, however, alter our domestic personal jurisdiction requirements, which must be independently established. Because the Montreal Convention does not confer personal jurisdiction, and because Appellant has not otherwise established a basis for personal jurisdiction over Appellee in this action, we affirm the district court’s dismissal for lack of personal jurisdiction.

 

 

This case began with the shipment of 24 pallets of vitamins from Chicago to South Korea. National Union Fire Insurance Company of Pittsburgh, PA insured the vitamins, and UPS Supply Chain Solutions, Inc. contracted for them to be carried by EVA Airways Corporation, an airline headquartered in Taiwan. EVA carried the shipment on non-stop flights from Chicago to Taiwan and then from Taiwan to South Korea. The vitamins allegedly arrived damaged, and this litigation ensued.

 

 

Next, we must answer whether the Montreal Convention provides a separate basis for exercising personal jurisdiction over EVA in this action. The Montreal Convention sets forth the types of claims that can be brought relating to international air carriage. It is well established that the treaty “preempts state law and provides the sole avenue for damages claims that fall within the scope of its provisions.” Cohen v. Am. Airlines, Inc., 13 F.4th 240, 246 (2d Cir. 2021). The treaty also includes jurisdictional provisions dictating where such claims can be brought. Pointing to these jurisdictional provisions, UPS argues that in enabling certain nation-states’ courts to adjudicate a claim arising under the treaty, the Montreal Convention provides those courts with personal jurisdiction over the defendant against whom the claim is brought. By this logic, UPS contends that because the treaty authorizes it to bring a third-party claim against EVA for indemnification and contribution, and because it authorizes courts in the United States to hear that third-party claim, we should interpret the Montreal Convention to establish personal jurisdiction over EVA in this action. For the reasons explained below, we hold that the Montreal Convention’s jurisdictional provisions speak only to treaty jurisdiction as a form of subject-matter jurisdiction, not personal jurisdiction. Therefore, the Montreal Convention does not confer personal jurisdiction on United States courts in actions arising under the treaty. The power to assert jurisdiction over a claim is distinct from the power to assert jurisdiction over a party, which must be separately established.

 

 

“The interpretation of a treaty, like the interpretation of a statute, begins with its text.” Medellín v. Texas, 552 U.S. 491, 506 (2008). The Montreal Convention’s primary jurisdictional provision, Article 33, provides that “an action for damages must be brought, at the option of the plaintiff, in the territory of one of the States Parties . . . before the court of” [1] the carrier’s domicile, [2] the carrier’s principal place of business, [3] the place where the contract was made, [4] the place of destination, or [5] in certain actions, a passenger’s principal and permanent residence. Montreal Convention art. 33(1)–(2). Article 33 also dictates that “questions of procedure shall be governed by the law of the court seised of the case.” Id. art. 33(4). Where one carrier (the “contracting carrier”) contracted with a party to provide air carriage and a different carrier (the “actual carrier”) performed the actual carriage, the Montreal Convention permits either carrier to implead the other in the event that it is sued. See id. art. 45 (authorizing “the defendant carrier to seek to have the remaining carrier joined in the proceedings according to the procedural requirements of the forum in which the action is brought”). A special jurisdictional provision, Article 46, applies in actions involving carriage arranged by a contracting carrier. Article 46 provides that such actions “must be brought, at the option of the plaintiff, in the territory of one of the States Parties, either before a court in which an action may be brought against the contracting carrier, as provided in Article 33, or before the court having jurisdiction at the place where the actual carrier has its domicile or its principal place of business.” Id. art. 46. In effect, Article 46 expands Article 33’s list of fora to encompass both the contracting carrier’s and actual carrier’s domicile and principal place of business.

 

 

An examination of this treaty text leads us to conclude that its jurisdictional provisions pertain to treaty jurisdiction. In the United States, federal courts have subject-matter jurisdiction over claims arising under the Montreal Convention pursuant to 28 U.S.C. § 1331, which gives federal courts subject-matter jurisdiction over “all civil actions arising under . . . treaties of the United States.” Articles 33 and 46 operate as a limit on this treaty jurisdiction. By stating where a damages action “must be brought,” the provisions delimit which nation-states’ courts can hear a claim arising under the treaty. Specifically, the provisions dictate that for the courts of a given nation-state to have jurisdiction over a claim arising under the treaty, the nation-state must be both one of the “States Parties” to the Convention and one of the fora listed in Article 33 (or Article 46, when applicable). Therefore, in a damages action governed by the Montreal Convention, if the United States is not one of the designated fora, then courts in the United States cannot exercise treaty jurisdiction over the action.

 

 

To begin, nothing in the text of the Montreal Convention says or implies that it gives rise to personal jurisdiction—that is, a court’s power to exercise control over a particular party. While Articles 33 and 46 state that actions “must be brought” in one of the specified fora, they do not state that the courts of those fora must entertain such actions without regard for other potential barriers to jurisdiction. To the contrary, as noted above, Article 33 specifies that “questions of procedure shall be governed by the law of the court seised of the case.” Montreal Convention art. 33(4). Likewise, while Article 45 allows a defendant contracting carrier to implead an actual carrier, or vice versa, the provision explicitly states that “the procedure and effects” remain “governed by the law of the court seised of the case.” Id. art. 45. The inclusion of these clauses indicates that while the Montreal Convention permits claims arising under the treaty to be brought in particular nations, it does not guarantee plaintiffs the unconditional right to litigate in those nations’ courts. Rather, the treaty expressly leaves room for nation-states to impose their own venue, jurisdictional, or other procedural requirements. We conclude that personal jurisdiction is such a requirement.

 

 

In sum, based on our analysis of the Montreal Convention’s text and our Warsaw Convention precedent, we conclude that the Montreal Convention speaks to jurisdiction only in the treaty sense. In cases arising under the Montreal Convention, personal jurisdiction must be separately established in accordance with domestic laws and practice.

 

 

 

LOHIER, Circuit Judge, concurring: I join the Court’s opinion in full. I write separately to emphasize that, while UPS failed to meet its burden of showing a “meeting of the minds” in this case, Majority Op. at 23, our decision does not definitively foreclose a contract-based theory of consent to personal jurisdiction under the Montreal Convention. There may be cases in which the defendant carrier impliedly or expressly consented to personal jurisdiction in, for example, “the court of the domicile of the carrier” or “the court at the place of destination” by doing business as an international air carrier governed by the treaty. See Montreal Convention, art. 33.

 

 

 

(U.S. Court of Appeals for the Second Circuit, July 19, 2023, UPS Supply Chain Solutions, Inc. v. EVA Airways Corporation, Docket No. 21-2867)