CHUBB INSURANCE COMPANY OF EUROPE S.A., а foreign corporation, on behalf of itself and all other underwriters subscribing to policy number CJ7317, Plaintiff, v. MENLO WORLDWIDE FORWARDING, INC., a corporation, Defendant, v. UPS Supply Chain Solutions, Inc., a corporation f/k/a Menlo Worldwide Forwarding, Inc., Defendant-third-party-plaintiff-Appellant, v. Qantas Airways Limited, Third-party-defendant-Appellee.
No. 08-55281
United States Court of Appeals, Ninth Circuit
Feb. 10, 2011
634 F.3d 1023
Before: DIARMUID F. O‘SCANNLAIN, RONALD M. GOULD, and SANDRA S. IKUTA, Circuit Judges.
Argued and Submitted Sept. 2, 2010.
Scott D. Cunningham, Condon & Forsyth LLP, Los Angeles, CA, argued the cause for the third-party-defendant-appellee, and filed the brief. Roderick D. Margo and Julia K. Doyle, Condon & Forsyth LLP, Los Angeles, CA, were also on the briefs.
Brandon Fried and Richard Fisher, Airforwarders Association, Washington DC, filed a brief on behalf of Amicus Curiae Airforwarders Association, in supрort of
Dr. Eduardo T. Cosentino, Langbehn & Cosentino, Buenos Aires, Argentina, filed a brief on his own behalf, in support of the defendant-third-party-plaintiff-appellant.
John D. Dillow, Kathleen M. O‘Sullivan, and Mack H. Shultz, Perkins Coie, LLP, Seattle, WA, filed a brief on behalf of Amicus Curiae Aerospace Industries Assoсiation of America, Inc.
Robert A. Rees, Rees Law Firm, PC, Los Angeles, CA, filed a brief on behalf of Amicus Curiae Paul Stephen Dempsey, in support of the third-party-defendant-appellee.
OPINION
O‘SCANNLAIN, Circuit Judge:
We must decide whether the Montreal Convention‘s two-year statutе of limitations on “the right to damages” in connection with international air cargo shipments applies to suits seeking indemnification and contribution.
I
On November 14, 2004, Air New Zealand Engineering, Ltd. contracted with Menlo Worldwide Forwarding, Inc. (“Menlo“) to ship a turbine aircraft engine from New Zealand to the United States. Menlo, in turn, contracted with Qantas Airways, Ltd. (“Qantas“) to perform the actual carriage of the engine to its destination. When the engine arrived in Los Angeles on or about November 19, however, it was not in the same condition as when it had left New Zealand; it had been damaged sometime during transportation. The engine‘s owner subsequently filed a claim with its insurer, Chubb Insurance Co. of Europe, S.A. (“Chubb“), for the resulting loss. Chubb paid the owner $119,666.62.
On November 14, 2006, Chubb brought this suit in federal district court against Mеnlo‘s successor-in-interest, UPS Supply Chain Solutions, Inc. (“UPS“), seeking to recover the money that it had paid to the engine‘s owner. Chubb argued that UPS was liable for the damage to the engine under the Montreal Convention, which governs international air carriagе of passengers, baggage, and cargo.1 The parties eventually reached a settlement under which UPS agreed to pay Chubb $80,000.
On September 18, 2007, UPS filed a third-party complaint against Qantas, seeking indemnification and contribution for sums UPS had paid Chubb. UPS claimed that it was “in no way responsible” for the damages alleged in Chubb‘s action; rather, UPS maintained, the engine was damaged as a “direct and proximate result” of “negligent or other actionable conduct” by Qantas.
The district court dismissed UPS‘s third-party complаint, reasoning that under Article 35 of the Montreal Convention,2 UPS‘s claims against Qantas were timely only if brought within two years of the damaged engine‘s arrival in Los Angeles. Because the claims were not brought with-
II
A
“The interpretation of a treaty, like the interpretation of a statute, begins with its text.” Medellin v. Texas, 552 U.S. 491, 506 (2008). And, where the text of a treaty is clear, a court has “no power to insert an amendment” based оn consideration of other sources. Chan v. Korean Air Lines, Ltd., 490 U.S. 122, 134 (1989).
The Montreal Convention governs the liability of air carriers in the “international carriage of persons, baggage or cargo.”
The “right to damages” is not defined in Article 35, but its contours become clear when the Convention is read as a whole. Articles 17 to 19 of the Conventiоn set forth the circumstances in which a carrier is “liable for damage.” A carrier is liable, under Article 17(1), for “damage sustained in case of death or bodily injury of a passenger“; under Article 17(2), for “damage sustained in case of destruction or loss of, or of damage to, checked baggage“; under Article 18(1), for “damage sustained in the event of the destruction or loss of, or damage to, cargo“; and under Article 19, for “damage occasioned by delay in the carriage by air of passengers, baggаge or cargo.”
Other Articles establish limits on a carrier‘s liability for damage, providing, for example, that compensation for loss of cargo cannot exceed a specified amount per kilogram. See
Construed against this backdrop, the “right to damages” referenced in Article 35 is the cause of action under the Montreal Convention by which a passenger or consignor may hold a carrier liablе for damage sustained to passengers, baggage, or cargo. It is plain that Chubb‘s action against UPS asserted such a right. But it is equally plain that UPS‘s third-party action against Qantas does not. UPS does not seek compensation for damage sustained to the engine; rather, UPS, as a contracting carrier, seeks indemnification (and contribution) from Qantas, as an actual carrier, for such compensation it has already paid Chubb.
While the Montreal Convention does not create a cause of аction for indemnification or contribution among carriers, it does not preclude such actions as may be available under local law. See In re Air Crash at Lexington, Ky., No. 5:07-CV-316, 2007 WL 2915187 (E.D.Ky. Oct. 5, 2007) (holding that the Montreal Convention does not preempt a local law cause of action for apportionment among joint tortfeasors); cf. Sompo Japan Ins., Inc. v. Nippon Cargo Airlines Co., Ltd., 522 F.3d 776, 785-87 (7th Cir. 2008)
Article 37, entitled “Right of recourse against third parties,” provides: “Nothing in this Convention shall prejudice the question whether a person liable for damage in accordance with its provisions has a right of recourse against any other person.” If Article 35 were construed to extinguish a carrier‘s “right of recourse” at the expiration of the specified two-year period, then the Convention would do precisely what Article 37 says it does not: “prejudice the question whether a person liable for damage ... has a right of recourse against any other person.” To avoid an explicit conflict between Articles 35 and 37, the “right to damages” extinguished by Article 35 must be understood not to include a carrier‘s “right of recourse” against another carrier. This reading is consistent with other portions of the Montreal Convention which use “right of recourse” to refer to suits between carriers. See
Article 45 supports this conclusion. It provides that “an action for damages may be brought ... against [the actual] carrier or the contraсting carrier, or against both together or separately. If the action is brought against only one of those carriers, that carrier shall have the right to require the other carrier to be joined in the proceedings, the procedure and effеcts being governed by the law of the court seized of the case.”
Finally, it is worth noting that Article 35 only mandates that “the right to damages shall be extinguished if an action is not brought within a period of two years.”
B
Qantas argues that, because Article 35 of the Montreal Convention is substantially identical to Article 29 of the Warsaw Convention, which it superseded,4 we must follow pre-Montreal Convention precedent interpreting Article 29. And, to be sure, some of those cases did hold that Article 29 of the Warsaw Convention applied to third party actions for indemnity and contribution. See Motorola, Inc. v. MSAS Cargo Int‘l, Inc., 42 F.Supp.2d 952, 956 (N.D.Cal.1998); Data Gen. Corp. v. Air Express Int‘l Co., 676 F.Supp. 538, 540-41 (S.D.N.Y.1988); Split End Ltd. v. Dimerco Express (Phils) Inc., No. 85 Civ. 1506, 1986 WL 2199, at *6 (S.D.N.Y. Feb. 11, 1986); L.B. Smith, Inc. v. Circle Air Freight Corp., 128 Misc.2d 12, 488 N.Y.S.2d 547, 549-50 (Sup.Ct.1985).
We have considered these cases, but find their textual analysis unpersuasive. Instead, we are guided by the Ontario Supreme Court of Canada‘s ruling that Article 29 of the Warsaw Convention does not apply to suits brought by one carrier against аnother. See Connaught Laboratories Ltd. v. Air Canada (1978), 23 O.R. 2d 176 (Can. Ont. Sup. Ct. J.).5 “Such claims,” the court held, were not “intended to be included, within the purview of The Warsaw Convention,” which, “deals with the claims of passengers, consignors and consignees, and the liability of carriers therefor,” not “with the claims of carriers inter se.” Id. 126.
Still, Qantas insists that the decisions it cites, despite having been issued by trial courts, are binding on this Court. This is so, Qantas maintains, because the Montreal Convention‘s drafting history supposedly makes clear that then-existing Warsaw precedent was not to be overrulеd. We are not allowed to consider the treaty‘s drafting history, however, because its text is unambiguous. See Chan, 490 U.S. at 134 (asserting that, when interpreting unambiguous treaties, courts must “be governed by the text—solemnly adopted by the governments of many separate nations—whatever conclusions might be drawn from the [treaty‘s] intricate drafting history“).6
III
For the foregoing reasons, we REVERSE the judgment of the district court and REMAND the case for further proceedings not inconsistent with this opinion.
REVERSED and REMANDED.