Ireland v. AMR Corp.

Citations: 20 F. Supp. 3d 341; 2014 U.S. Dist. LEXIS 67131; 59 Bankr. Ct. Dec. (CRR) 139; 2014 WL 2002827Docket: No. 12-CV-6315 (ARR)(RLM)

Court: District Court, E.D. New York; May 15, 2014; Federal District Court

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George Ireland filed a lawsuit against American Airlines, Inc. and its parent company, AMR Corporation, seeking damages for injuries sustained during Flight 331 from Miami to Kingston, Jamaica, which occurred on December 22, 2009. The airlines moved to dismiss the case, arguing that Ireland did not file his complaint within the two-year limit set by the Montreal Convention, which governs such claims. Ireland contended that his filing period was extended due to the defendants' bankruptcy, which placed an automatic stay on litigation. 

The court examined whether the bankruptcy stay effectively extended the two-year period for Ireland to file his claim. It concluded that the stay did not extend the filing period and granted the defendants' motion to dismiss. The stay had been in place since the defendants filed for bankruptcy on November 29, 2011, and was lifted on December 9, 2013, after which Ireland did not seek relief from the stay. The court emphasized that under Rule 12(b)(6), complaints must present a plausible claim for relief, and in this case, Ireland's claim was deemed time-barred according to Article 35 of the Montreal Convention.

Article 35 establishes a two-year limitation period for filing claims for damages, beginning from the date of arrival at the destination or the date the aircraft was supposed to arrive. Ireland's suit was filed on December 21, 2012, nearly three years after the accident in Jamaica, leading defendants to argue for its dismissal. The plaintiff contends that this limitation period was suspended due to an automatic stay resulting from the defendants' bankruptcy filing on November 29, 2011. He cites section 108(c) of the Bankruptcy Code, which allows the limitation period to be extended until 30 days after receiving notice of the termination of the stay, which was only given on January 2, 2014. Thus, he argues his claim was timely filed.

Defendants counter by referencing case law interpreting Article 35 and its predecessor, Article 29 of the Warsaw Convention, emphasizing that the two-year limitation is viewed as a "condition precedent to suit" rather than a statute of limitations, and therefore not subject to tolling. Citing the Second Circuit's decision in Fishman v. Delta Air Lines, defendants highlight that the drafters of the Convention deliberately excluded provisions for tolling, aiming to avoid uncertainty in actions governed by the Convention. Other courts have followed this rationale, reinforcing that Article 35's limitation is not subject to state-law tolling. The plaintiff does not address this aspect of the case law directly but relies on earlier, less relevant cases.

In New Pentax Film, Inc. v. Trans World Airlines, Inc., the court examined the interaction between section 108(c) of the Bankruptcy Code and the two-year limitation in Article 29 of the Warsaw Convention. The court clarified that while the Warsaw Convention's limitation is referred to as a "statute of limitations," it was not intended for tolling. Instead, section 108(c) extends the deadline for filing until 30 days after a bankruptcy stay is lifted, thereby protecting a party's rights when they are unable to commence or continue an action due to bankruptcy. The court concluded that since the Bankruptcy Code is federal law, it would prevail over the Warsaw Convention under the "last in time" principle because it was enacted over 40 years later. 

The court noted that the New Pentax Film decision, although relevant, does not control the current analysis due to the enactment of the Montreal Convention in 2003, which changes the context of the "last in time" principle. Additionally, the Second Circuit's later decision in Fishman redefined the two-year limitation as a "condition precedent to suit," suggesting that this characterization may impact how section 108(c) is applied. 

In Okeke v. Northwest Airlines, Inc., which involved Article 35 of the Montreal Convention, the court similarly rejected the idea that section 108(c) tolls the limitation period. The court reiterated that the plaintiff had until the later of either 30 days post-stay termination or the original two-year limit to file. While citing New Pentax Film, it did not explore the differences in treatment of section 108(c) compared to other tolling provisions. The issue was moot in Okeke since the two-year limit expired after the 30-day extension. Another Eighth Circuit case assumed that section 108(c) would extend the two-year limitation period post-stay, aligning with the interpretations of New Pentax Film.

In Husmann v. Trans World Airlines, Inc., the plaintiff contended that a Missouri law allowing for tolling during bankruptcy should apply under Article 29 of the Warsaw Convention. The Eighth Circuit, referencing Fishman's interpretation of Article 29 as a "condition precedent to suit," rejected this argument. The court clarified that the Bankruptcy Code does not toll statutes of limitations during bankruptcy but requires actions to be initiated within thirty days after a stay is lifted. The bankruptcy court terminated the stay on April 6, 1995, meaning the plaintiff had until May 6, 1995, to file his claim, which he did not. Although the Eighth Circuit implied that a timely filing within this window would have been valid, it did not cite New Pentax Film or consider the "last in time" rule, instead assuming without discussion that section 108(c) applies to the two-year treaty period.

The court expressed skepticism toward the relevance of Okeke and Husmann, noting they failed to adequately assess whether section 108(c) extends time in treaty cases governed by Articles 29 and 35. It emphasized that it is bound by the Second Circuit's ruling in Fishman, which deemed the provisions in Articles 29 and 35 as creating a condition precedent not subject to tolling, thereby preventing any extension of the two-year limit under section 108(c). The court highlighted that the legislative history of Article 35 aimed to eliminate uncertainty from varying tolling laws among member states. Although section 108(c) functions differently from typical tolling provisions, it effectively extends the statute of limitations, which contradicts the intent of the treaty's drafters to enforce a definitive two-year limit.

The court dismissed the plaintiff's argument about unfairly preventing claims under the Montreal Convention, noting he had the opportunity to file suit during the bankruptcy process, which he did not utilize effectively. If he had filed within the two-year period, the action would have been stayed until the bankruptcy stay was lifted, as occurred in this instance.

Plaintiff had the option to request the bankruptcy court to lift the stay for this suit but did not do so. The potential unfairness in this case is similar to situations where tolling is unavailable to extend the two-year limitation period under Article 35 of the Montreal Convention. The drafters of the limitation provision chose uniformity over the risk of unfairness, leading to the Second Circuit's ruling in Fishman, which denied tolling for a plaintiff's infancy despite unfair consequences. Consequently, since the plaintiff did not file his complaint within the two-year period following the accident in Jamaica, his right to pursue a claim under the Montreal Convention was extinguished, and the defendants' bankruptcy did not extend this timeframe. Therefore, the court granted the defendants' motion, resulting in the dismissal of the plaintiff's action. The court assumed the truth of the complaint's allegations for this motion, noting that a report from the Jamaica Civil Aviation Authority indicated that Flight 331's crew was informed of adverse conditions but chose to land on the affected runway. The Montreal Convention, which governs international air carriage, superseded the Warsaw Convention, with its drafters considering prior legal developments in its interpretation.