#1The Bremen v. Zapata Off-Shore Co.
historical judicial resistance to any attempt to reduce the power and business of a
FACTSIn November, 1967, respondent Zapata, a Houston-based American
corporation, contracted with petitioner Unterweser, a German corporation, to tow
Zapata's ocean-going, self-elevating drilling rig Chaparral from Louisiana to a point
off Ravenna, Italy, in the Adriatic Sea, where Zapata had agreed to drill certain
wells.
Zapata had solicited bids for the towage, and several companies, including
Unterweser, had responded. Unterweser was the low bidder and Zapata requested
it to submit a contract, which it did. The contract submitted by Unterweser
contained the following provision, which is at issue in this case:
Any dispute arising must be treated before the London Court of Justice.
On January 5, 1968, Unterweser's deep sea tug Bremen departed Venice, Louisiana,
with the Chaparral in tow bound for Italy. On January 9, while the flotilla was in
international waters in the middle of the Gulf of Mexico, a severe storm arose. The
sharp roll of the Chaparral in Gulf waters caused its elevator legs, which had been
raised for the voyage, to break off and fall into the sea, seriously damaging
the Chaparral. In this emergency situation, Zapata instructed the Bremen to tow its
damaged rig to Tampa, Florida, the nearest port of refuge.
On January 12, Zapata, ignoring its contract promise to litigate "any dispute arising"
in the English courts, commenced a suit in admiralty in the United States District
Court at Tampa, seeking $3,500,000 damages against Unterweser in personam and
the Bremen in rem, alleging negligent towage and breach of contract. Unterweser
responded by invoking the forum clause of the towage contract, and moved to
dismiss for lack of jurisdiction or on forum non conveniens grounds, or, in the
alternative, to stay the action pending submission of the dispute to the "London
Court of Justice."
The District Judge and the Court of Appeals based their ruling in the Carbon
Black decision, concluding that, "at the very least,'" that case stood for the
proposition that a forum selection clause "`will not be enforced unless the selected
state would provide a more convenient forum than the state in which suit is brought.'"
From that premise, the Court of Appeals proceeded to conclude that, apart from the
forum selection clause, the District Court did not abuse its discretion in refusing to
decline jurisdiction on the basis of forum non conveniens. It noted that (1) the flotilla
never "escaped the Fifth Circuit's mare nostrum, and the casualty occurred in close
proximity to the district court"; (2) a considerable number of potential witnesses,
including Zapata crewmen, resided in the Gulf Coast area; (3) preparation for the
voyage and inspection and repair work had been performed in the Gulf area; (4) the
testimony of the Bremen crew was available by way of deposition; (5) England had no
interest in or contact with the controversy other than the forum selection clause. The
Court of Appeals majority further noted that Zapata was a United States citizen and
"[t]he discretionof the district court to remand the case to a foreign forum was
consequently limited" -- especially since it appeared likely that the English courts
would enforce the exculpatory clauses. In the Court of Appeals' view, enforcement of
such clauses would be contrary to public policy in American courts under Bisso v.
Inland Waterways Corp., 349 U. S. 85 (1955), and Dixilyn Drilling Corp. v. Crescent
Towing & Salvage Co., 372 U. S. 697 (1963). Therefore, "[t]he district court was
entitled to consider that remanding Zapata to a foreign forum, with no practical
contact with the controversy, could raise a bar to recovery by a United States citizen
which its own convenient courts would not countenance.
ISSUEWhether or not the forum choice in the contract is binding?
RULINGForum selection clauses have historically not been favored by American
courts. Many courts, federal and state, have declined to enforce such clauses on the
ground that they were "contrary to public policy," or that their effect was to "oust
the jurisdiction" of the court. Although this view apparently still has considerable
acceptance, other courts are tending to adopt a more hospitable attitude toward
forum selection clauses. This view, advanced in the well reasoned dissenting
opinion in the instant case, is that such clauses are prima facie valid, and should be
enforced unless enforcement is shown by the resisting party to be "unreasonable"
under the circumstances. We believe this is the correct doctrine to be followed by
federal district courts sitting in admiralty. It is merely the other side of the
proposition recognized by this Court in National Equipment Rental, Ltd. v.
Szukhent, 375 U. S. 311 (1964), holding that in federal courts a party may validly
consent to be sued in a jurisdiction where he cannot be found for service of process
through contractual designation of an "agent" for receipt of process in that
jurisdiction. In so holding, the Court stated: "[I]t is settled . . . that parties to a
contract may agree in advance to submit to the jurisdiction of a given court, to
permit notice to be served by the opposing party, or even to waive notice
altogether." This approach is substantially that followed in other common law
countries, including England. It is the view advanced by noted scholars, and that
adopted by the Restatement of the Conflict of Laws. It accords with ancient
concepts of freedom of contract, and reflects an appreciation of the expanding
horizons of American contractors who seek business in all parts of the world. Not
surprisingly, foreign businessmen prefer, as do we, to have disputes resolved in
their own courts, but, if that choice is not available, then in a neutral forum with
expertise in the subject matter. Plainly, the courts of England meet the standards of
neutrality and long experience in admiralty litigation. The choice of that forum was
made in an arm's length negotiation by experienced and sophisticated
businessmen, and, absent some compelling and countervailing reason, it should be
honored by the parties and enforced by the courts.
The argument that such clauses are improper because they tend to "oust" a court of
jurisdiction is hardly more than a vestigial legal fiction. It appears to rest at core on
particular court, and has little place in an era when all courts are overloaded and
when businesses, once essentially local, now operate in world markets. It reflects
something of a provincial attitude regarding the fairness of other tribunals. No one
seriously contends in this case that the forum selection clause "ousted" the District
Court of jurisdiction over Zapata's action. The threshold question is whether that
court should have exercised its jurisdiction to do more than give effect to the
legitimate expectations of the parties, manifested in their freely negotiated
agreement, by specifically enforcing the forum clause.
There are compelling reasons why a freely negotiated private international
agreement, unaffected by fraud, undue influence, or overweening bargaining
power, such as that involved here, should be given full effect. In this case, for
example, we are concerned with a far from routine transaction between companies
of two different nations contemplating the tow of an extremely costly piece of
equipment from Louisiana across the Gulf of Mexico and the Atlantic Ocean,
through the Mediterranean Sea to its final destination in the Adriatic Sea. In the
course of its voyage, it was to traverse the waters of many jurisdictions.
The Chaparral could have been damaged at any point along the route, and there
were countless possible ports of refuge. That the accident occurred in the Gulf of
Mexico and the barge was towed to Tampa in an emergency were mere fortuities. It
cannot be doubted for a moment that the parties sought to provide for a neutral
forum for the resolution of any disputes arising during the tow. Manifestly, much
uncertainty and possibly great inconvenience to both parties could arise if a suit
could be maintained in any jurisdiction in which an accident might occur or if
jurisdiction were left to any place where the Bremen or Unterweser might happen
to be found. The elimination of all such uncertainties by agreeing in advance on a
forum acceptable to both parties is an indispensable element in international trade,
commerce, and contracting. There is strong evidence that the forum clause was a
vital part of the agreement, and it would be unrealistic to think that the parties did
not conduct their negotiations, including fixing the monetary terms, with the
consequences of the forum clause figuring prominently in their calculations. Under
these circumstances, as Justice Karminski reasoned in sustaining jurisdiction over
Zapata in the High Court of Justice, "[t]he force of an agreement for litigation in this
country, freely entered into between two competent parties, seems to me to be very
powerful."
Thus, in the light of present-day commercial realities and expanding international
trade, we conclude that the forum clause should control absent a strong showing
that it should be set aside. Although their opinions are not altogether explicit, it
seems reasonably clear that the District Court and the Court of Appeals placed the
burden on Unterweser to show that London would be a more convenient forum
than Tampa, although the contract expressly resolved that issue. The correct
approach would have been to enforce the forum clause specifically unless Zapata
could clearly show that enforcement would be unreasonable and unjust, or that the
clause was invalid for such reasons as fraud or overreaching. Accordingly, the case
must be remanded for reconsideration.
#2PAKISTAN INTERNATIONAL AIRLINES CORPORATIONvsHON. BLAS F. OPLE,
in his capacity as Minister of Labor; HON. VICENTE LEOGARDO, JR., in his
capacity as Deputy Minister; ETHELYNNE B. FARRALES and MARIA
MOONYEEN MAMASIG
FACTSOn 2 December 1978, petitioner Pakistan International Airlines Corporation
("PIA"), a foreign corporation licensed to do business in the Philippines, executed in
Manila two (2) separate contracts of employment, one with private respondent
Ethelynne B. Farrales and the other with private respondent Ma. M.C. Mamasig. The
contracts, which became effective on 9 January 1979, provided in pertinent portion
as follows:
10. APPLICABLE LAW:
This agreement shall be construed and governed under and by the laws
of Pakistan, and only the Courts of Karachi, Pakistan shall have the
jurisdiction to consider any matter arising out of or under this
agreement.
On 2 August 1980, roughly one (1) year and four (4) months prior to the expiration
of the contracts of employment, PIA through Mr. Oscar Benares, counsel for and
official of the local branch of PIA, sent separate letters both dated 1 August 1980 to
private respondents Farrales and Mamasig advising both that their services as flight
stewardesses would be terminated "effective 1 September 1980, conformably to
clause 6 (b) of the employment agreement [they had) executed with [PIA]."
On 9 September 1980, private respondents Farrales and Mamasig jointly instituted
a complaint, for illegal dismissal and non-payment of company benefits and
bonuses, against PIA with the then Ministry of Labor and Employment ("MOLE").
After several unfruitful attempts at conciliation, the MOLE hearing officer Atty. Jose
M. Pascual ordered the parties to submit their position papers and evidence
supporting their respective positions. The PIA submitted its position paper, but no
evidence, and there claimed that both private respondents were habitual absentees;
that both were in the habit of bringing in from abroad sizeable quantities of
"personal effects"; and that PIA personnel at the Manila International Airport had
been discreetly warned by customs officials to advise private respondents to
discontinue that practice. PIA further claimed that the services of both private
respondents were terminated pursuant to the provisions of the employment
contract.
ISSUEWhether or not MOLE has jurisdiction over the claim?
RULINGYES
Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement
which specifies, firstly, the law of Pakistan as the applicable law of the agreement
and, secondly, lays the venue for settlement of any dispute arising out of or in
connection with the agreement "only [in] courts of Karachi Pakistan". The first
clause of paragraph 10 cannot be invoked to prevent the application of Philippine
labor laws and regulations to the subject matter of this case, i.e., the employer-
employee relationship between petitioner PIA and private respondents. We have
already pointed out that the relationship is much affected with public interest and
that the otherwise applicable Philippine laws and regulations cannot be rendered
illusory by the parties agreeing upon some other law to govern their relationship.
Neither may petitioner invoke the second clause of paragraph 10, specifying the
Karachi courts as the sole venue for the settlement of dispute; between the
contracting parties. Even a cursory scrutiny of the relevant circumstances of this
case will show the multiple and substantive contacts between Philippine law and
Philippine courts, on the one hand, and the relationship between the parties, upon
the other: the contract was not only executed in the Philippines, it was also
performed here, at least partially; private respondents are Philippine citizens and
respondents, while petitioner, although a foreign corporation, is licensed to do
business (and actually doing business) and hence resident in the Philippines; lastly,
private respondents were based in the Philippines in between their assigned flights
to the Middle East and Europe. All the above contacts point to the Philippine courts
and administrative agencies as a proper forum for the resolution of contractual
disputes between the parties. Under these circumstances, paragraph 10 of the
employment agreement cannot be given effect so as to oust Philippine agencies and
courts of the jurisdiction vested upon them by Philippine law. Finally, and in any
event, the petitioner PIA did not undertake to plead and prove the contents of
Pakistan law on the matter; it must therefore be presumed that the applicable
provisions of the law of Pakistan are the same as the applicable provisions of
Philippine law.
#3NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURG,
PA/AMERICAN INTERNATIONAL UNDERWRITER (PHIL.) INC., vs.STOLT-
NIELSEN PHILIPPINES, INC. and COURT OF APPEALS
FACTSOn 9 January 1985, United Coconut Chemicals, Inc. (hereinafter referred to as
SHIPPER) shipped 404.774 metric tons of distilled C6-C18 fatty acid on board MT
"StoltSceptre," a tanker owned by Stolt-Nielsen Philippines Inc. (hereinafter
referred to as CARRIER), from Bauan, Batangas, Philippines, consigned to
"NieuweMatex" at Rotterdam, Netherlands, covered by Tanker Bill of Lading BL No.
BAT-1. The shipment was insured under a marine cargo policy with Petitioner
National Union Fire Insurance Company of Pittsburg (hereinafter referred to as
INSURER), a non-life American insurance corporation, through its settling agent in
the Philippines, the American International Underwriters (Philippines), Inc., the
other petitioner herein.
It appears that the Bill of Lading issued by the CARRIER contained a general
statement of incorporation of the terms of a Charter Party between the SHIPPER
and Parcel Tankers, Inc., entered into in Greenwich, Connecticut, U.S.A.
Upon receipt of the cargo by the CONSIGNEE in the Netherlands, it was found to be
discolored and totally contaminated. The claim filed by the SHIPPER-ASSURED with
the CARRIER having been denied, the INSURER indemnified the SHIPPER pursuant
to the stipulation in the marine cargo policy covering said shipment.
On 21 April 1986, as subrogee of the SHIPPER-ASSURED, the INSURER filed suit
against the CARRIER, before the Regional Trial Court of Makati, Branch 58 (RTC),
for recovery of the sum of P1,619,469.21, with interest, representing the amount
the INSURER had paid the SHIPPER-ASSURED. The CARRIER moved to
dismiss/suspend the proceedings on the ground that the RTC had no jurisdiction
over the claim the same being an arbitrable one; that as subrogee of the SHIPPER-
ASSURED, the INSURER is subject to the provisions of the Bill of Lading, which
includes a provision that the shipment is carried under and pursuant to the terms
of the Charter Party, dated 21 December 1984, between the SHIPPER-ASSURED and
Parcel Tankers, Inc. providing for arbitration.
Arbitration. Any dispute arising from the making, performance or
termination of this Charter Party shall be settled in New York, Owner
and Charterer each appointing an arbitrator, who shall be a merchant,
broker or individual experienced in the shipping business; the two thus
chosen, if they cannot agree, shall nominate a third arbitrator who shall
be an admiralty lawyer. Such arbitration shall be conducted in
conformity with the provisions and procedure of the United States
arbitration act, and a judgment of the court shall be entered upon any
award made by said arbitrator. Nothing in this clause shall be deemed to
waive Owner's right to lien on the cargo for freight, deed of freight, or
demurrage.
The INSURER opposed the dismissal/suspension of the proceedings on the ground
that it was not legally bound to submit the claim for arbitration inasmuch as the
arbitration clause provided in the Charter Party was not incorporated into the Bill
of Lading, and that the arbitration clause is void for being unreasonable and unjust.
On 28 July 1987, the RTC denied the Motion, but subsequently reconsidered its
action on 19 November 1987, and deferred resolution on the Motion to
Dismiss/Suspend Proceedings until trial on the merits "since the ground alleged in
said motion does not appear to be indubitable."
The INSURER postulates that it cannot be bound by the Charter Party because, as
insurer, it is subrogee only with respect to the Bill of Lading; that only the Bill of
Lading should regulate the relation among the INSURER, the holder of the Bill of
Lading, and the CARRIER; and that in order to bind it, the arbitral clause in the
Charter Party should have been incorporated into the Bill of Lading.
ISSUEWhether or not the terms of the Charter Party, particularly the provision on
arbitration, binding on the INSURER?
RULINGYes
Clearly, the Bill of Lading incorporates by reference the terms of the Charter Party.
It is settled law that the charter may be made part of the contract under which the
goods are carried by an appropriate reference in the Bill of Lading. This should
include the provision on arbitration even without a specific stipulation to that
effect. The entire contract must be read together and its clauses interpreted in
relation to one another and not by parts. Moreover, in cases where a Bill of Lading
has been issued by a carrier covering goods shipped aboard a vessel under a
charter party, and the charterer is also the holder of the bill of lading, "the bill of
lading operates as the receipt for the goods, and as document of title passing the
property of the goods, but not as varying the contract between the charterer and
the shipowner". The Bill of Lading becomes, therefore, only a receipt and not the
contract of carriage in a charter of the entire vessel, for the contract is the Charter
Party and is the law between the parties who are bound by its terms and condition
provided that these are not contrary to law, morals, good customs, public order and
public policy (Article 1306, Civil Code).
As the respondent Appellate Court found, the INSURER "cannot feign ignorance of
the arbitration clause since it was already charged with notice of the existence of
the charter party due to an appropriate reference thereof in the bill of lading and,
by the exercise of ordinary diligence, it could have easily obtained a copy thereof
either from the shipper or the charterer.
We hold, therefore, that the INSURER cannot avoid the binding effect of the
arbitration clause. By subrogation, it became privy to the Charter Party as fully as
the SHIPPER before the latter was indemnified, because as subrogee it stepped into
the shoes of the SHIPPER-ASSURED and is subrogated merely to the latter's rights.
It can recover only the amount that is recoverable by the assured. And since the
right of action of the SHIPPER-ASSURED is governed by the provisions of the Bill of
Lading, which includes by reference the terms of the Charter Party, necessarily, a
suit by the INSURER is subject to the same agreements.
Stated otherwise, as the subrogee of the SHIPPER, the INSURER is contractually
bound by the terms of the Charter party. Any claim of inconvenience or additional
expense on its part should not render the arbitration clause unenforceable.
#4SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA ZALAMEAvs.
HONORABLE COURT OF APPEALS and TRANSWORLD AIRLINES, INC.
FACTSPetitioners-spouses Cesar C. Zalamea and SuthiraZalamea, and their
daughter, Liana Zalamea, purchased three (3) airline tickets from the Manila agent
of respondent TransWorld Airlines, Inc. for a flight to New York to Los Angeles on
June 6, 1984. The tickets of petitioners-spouses were purchased at a discount of
75% while that of their daughter was a full fare ticket. All three tickets represented
confirmed reservations.
While in New York, on June 4, 1984, petitioners received notice of the
reconfirmation of their reservations for said flight. On the appointed date, however,
petitioners checked in at 10:00 a.m., an hour earlier than the scheduled flight at
11:00 a.m. but were placed on the wait-list because the number of passengers who
had checked in before them had already taken all the seats available on the flight.
Liana Zalamea appeared as the No. 13 on the wait-list while the two other Zalameas
were listed as "No. 34, showing a party of two." Out of the 42 names on the wait list,
the first 22 names were eventually allowed to board the flight to Los Angeles,
including petitioner Cesar Zalamea. The two others, on the other hand, at No. 34,
being ranked lower than 22, were not able to fly. As it were, those holding full-fare
tickets were given first priority among the wait-listed passengers. Mr. Zalamea, who
was holding the full-fare ticket of his daughter, was allowed to board the plane;
while his wife and daughter, who presented the discounted tickets were denied
boarding. According to Mr. Zalamea, it was only later when he discovered the he
was holding his daughter's full-fare ticket.
Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, could
not be accommodated because it was also fully booked. Thus, they were
constrained to book in another flight and purchased two tickets from American
Airlines at a cost of Nine Hundred Eighteen ($918.00) Dollars.
Upon their arrival in the Philippines, petitioners filed an action for damages based
on breach of contract of air carriage before the Regional Trial Court of Makati,
Metro Manila, Branch 145.
The lower court ruled in favor of petitioners. On appeal, however, the appellate
court found that while there was a breach of contract on respondent TWA's part,
there was neither fraud nor bad faith because under the Code of Federal
Regulations by the Civil Aeronautics Board of the United States of America it is
allowed to overbook flights.
ISSUEWhether or not the Code of Federal Regulations by the Civil Aeronautics
Board of the United States of America is applicable?
RULINGNo.
Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its
customer service agent, in her deposition dated January 27, 1986 that the Code of
Federal Regulations of the Civil Aeronautics Board allows overbooking. Aside from
said statement, no official publication of said code was presented as evidence. Thus,
respondent court's finding that overbooking is specifically allowed by the US Code
of Federal Regulations has no basis in fact.
Even if the claimed U.S. Code of Federal Regulations does exist, the same is not
applicable to the case at bar in accordance with the principle of lex loci
contractus which require that the law of the place where the airline ticket was
issued should be applied by the court where the passengers are residents and
nationals of the forum and the ticket is issued in such State by the defendant
airline. Since the tickets were sold and issued in the Philippines, the applicable law
in this case would be Philippine law.
Existing jurisprudence explicitly states that overbooking amounts to bad faith,
entitling the passengers concerned to an award of moral damages.
Even on the assumption that overbooking is allowed, respondent TWA is still guilty
of bad faith in not informing its passengers beforehand that it could breach the
contract of carriage even if they have confirmed tickets if there was overbooking.
Respondent TWA should have incorporated stipulations on overbooking on the
tickets issued or to properly inform its passengers about these policies so that the
latter would be prepared for such eventuality or would have the choice to ride with
another airline.
Respondent TWA contends that Exhibit I, the detached flight coupon upon which
were written the name of the passenger and the points of origin and destination,
contained such a notice. An examination of Exhibit I does not bear this out. At any
rate, said exhibit was not offered for the purpose of showing the existence of a
notice of overbooking but to show that Exhibit I was used for flight 007 in first class
of June 11, 1984 from New York to Los Angeles.
Moreover, respondent TWA was also guilty of not informing its passengers of its
alleged policy of giving less priority to discounted tickets. While the petitioners had
checked in at the same time, and held confirmed tickets, yet, only one of them was
allowed to board the plane ten minutes before departure time because the full-fare
ticket he was holding was given priority over discounted tickets. The other two
petitioners were left behind.
#5PAN AMERICAN WORLD AIRWAYS, INC.vs.JOSE K. RAPADAS and THE COURT
OF APPEALS
FACTSOn January 16, 1975, private respondent Jose K. Rapadas held Passenger
Ticket and Baggage Claim Check No. 026-394830084-5 for petitioner's Flight No.
841 with the route from Guam to Manila. While standing in line to board the flight
at the Guam airport, Rapadas was ordered by petitioner's handcarry control agent
to check-in his Samsonite attache case. Rapadas protested pointing to the fact that
other co-passengers were permitted to handcarry bulkier baggages. He stepped out
of the line only to go back again at the end of it to try if he can get through without
having to register his attache case. However, the same man in charge of handcarry
control did not fail to notice him and ordered him again to register his baggage. For
fear that he would miss the plane if he insisted and argued on personally taking the
valise with him, he acceded to checking it in. He then gave his attache case to his
brother who happened to be around and who checked it in for him, but without
declaring its contents or the value of its contents. He was given a Baggage Claim Tag
No. P-749-713.
Upon arriving in Manila on the same date, January 16, 1975, Rapadas claimed and
was given all his checked-in baggages except the attache case. Since Rapadas felt ill
on his arrival, he sent his son, Jorge Rapadas to request for the search of the missing
luggage. The petitioner exerted efforts to locate the luggage through the Pan
American World Airways-Manila International Airport (PAN AM-MIA) Baggage
Service.
On January 30, 1975, the petitioner required the private respondent to put the
request in writing. The respondent filled in a Baggage Claim Blank Form.
Thereafter, Rapadas personally followed up his claim. For several times, he called
up Mr. Panuelos, the head of the Baggage Section of PAN AM. He also sent letters
demanding and reminding the petitioner of his claim.
Rapadas received a letter from the petitioner's counsel dated August 2, 1975
offering to settle the claim for the sum of one hundred sixty dollars ($160.00)
representing the petitioner's alleged limit of liability for loss or damage to a
passenger's personal property under the contract of carriage between Rapadas and
PAN AM. Refusing to accept this kind of settlement, Rapadas filed the instant action
for damages on October 1, 1975. Rapadas alleged that PAN AM discriminated or
singled him out in ordering that his luggage be checked in. He also alleged that PAN
AM neglected its duty in the handling and safekeeping of his attache case from the
point of embarkation in Guam to his destination in Manila. He placed the value of
the lost attache case and its contents at US$42,403.90. According to him, the loss
resulted in his failure to pay certain monetary obligations, failure to remit money
sent through him to relatives, inability to enjoy the fruits of his retirement and
vacation pay earned from working in Tonga Construction Company (he retired in
August 1974) and inability to return to Tonga to comply with then existing
contracts.
ISSUEWhether or not a passenger is bound by the terms of a passenger ticket
declaring that the limitations of liability set forth in the Warsaw Convention
RULINGYes
The Warsaw Convention, as amended, specifically provides that it is applicable
to international carriage which it defines in Article 1, par. 2 as follows:
(2) For the purposes of this Convention, the expression "international
carriage" means any carriage in which, according to the agreement
between the parties, the place of departure and the place of destination,
whether or not there be a breach in the carriage or a transhipment, are
situated either within the territories of two High Contracting Parties or
within the territory of a single High Contracting Party if there is an
agreed stopping place within the territory of another State, even if that
State is not a High Contracting Party. Carriage between two points
within the territory of a single High Contracting Party without an agreed
stopping place within the territory of another State is not international
carriage for the purposes of this Convention. ("High Contracting Party"
refers to a state which has ratified or adhered to the Convention, or
which has not effectively denounced the Convention [Article 40A(l)]).
Nowhere in the Warsaw Convention, as amended, is such a detailed notice of
baggage liability limitations required. Nevertheless, it should become a common,
safe and practical custom among air carriers to indicate beforehand the precise
sums equivalent to those fixed by Article 22 (2) of the Convention.
The Convention governs the availment of the liability limitations where the baggage
check is combined with or incorporated in the passenger ticket which complies
with the provisions of Article 3, par. l (c). (Article 4, par. 2) In the case at bar, the
baggage check is combined with the passenger ticket in one document of carriage.
The passenger ticket complies with Article 3, par. l (c) which provides:
(l) In respect of the carriage of passengers a ticket shall be delivered
containing:
(a) . . .
(b) . . .
(c) a notice to the effect that, if the passenger's journey involves an
ultimate destination or stop in a country other than the country of
departure, the Warsaw Convention may be applicable and that the
Convention governs and in most cases limits the liability of
carriers for death or personal injury and in respect of loss of or
damage to baggage.
We have held in the case of OngYiu v. Court of Appeals, supra, and reiterated in a
similar case where herein petitioner was also sued for damages, Pan American
World Airways v. Intermediate Appellate Court (164 SCRA 268 [1988]) that:
It (plane ticket) is what is known as a contract of "adhesion", in regards
which it has been said that contracts of adhesion wherein one party
imposes a ready made form of contract on the other, as the plane ticket
in the case at bar, are contracts not entirely prohibited. The one who
adheres to the contract is in reality free to reject it entirely; if he
adheres, he gives his consent. (Tolentino, Civil Code, Vol. IV, 1962 ed., p.
462, citing Mr. Justice J.B.L. Reyes, Lawyer's Journal, January 31, 1951, p.
49) And as held in Randolph v. American Airlines, 103 Ohio App. 172,
144 N.E. 2d 878; Rosenchein v. Trans World Airlines, Inc., 349 S.W. 2d
483, "a contract limiting liability upon an agreed valuation does not
offend against the policy of the law forbidding one from contracting
against his own negligence.
Considering, therefore, that petitioner had failed to declare a higher
value for his baggage, he cannot be permitted a recovery in excess of
P100.00 . . . (91 SCRA 223 at page 231)
We hasten to add that while contracts of adhesion are not entirely prohibited,
neither is a blind reliance on them encouraged. In the face of facts and
circumstances showing they should be ignored because of their basically one sided
nature, the Court does not hesitate to rule out blind adherence to their terms.
The arguments of the petitioner do not belie the fact that it was indeed accountable
for the loss of the attache case. What the petitioner is concerned about is whether
or not the notice, which it did not fail to state in the plane ticket and which it
deemed to have been read and accepted by the private respondent will be
considered by this Court as adequate under the circumstances of this case. As
earlier stated, the Court finds the provisions in the plane ticket sufficient to govern
the limitations of liabilities of the airline for loss of luggage. The passenger, upon
contracting with the airline and receiving the plane ticket, was expected to be
vigilant insofar as his luggage is concerned. If the passenger fails to adduce
evidence to overcome the stipulations, he cannot avoid the application of the
liability limitations.
The facts show that the private respondent actually refused to register the attache
case and chose to take it with him despite having been ordered by the PANAM agent
to check it in. In attempting to avoid registering the luggage by going back to the
line, private respondent manifested a disregard of airline rules on allowable
handcarriedbaggages. Prudence of a reasonably careful person also dictates that
cash and jewelry should be removed from checked-in-luggage and placed in one's
pockets or in a handcarriedManila-paper or plastic envelope.
The alleged lack of enough time for him to make a declaration of a higher value and
to pay the corresponding supplementary charges cannot justify his failure to
comply with the requirement that will exclude the application of limited liability.
Had he not wavered in his decision to register his luggage, he could have had
enough time to disclose the true worth of the articles in it and to pay the extra
charges or remove them from the checked-in-luggage. Moreover, an airplane will
not depart meantime that its own employee is asking a passenger to comply with a
safety regulation.
Passengers are also allowed one handcarried bag each provided it conforms to
certain prescribed dimensions. If Mr. Rapadas was not allowed to handcarry the
lost attache case, it can only mean that he was carrying more than the allowable
weight for all his luggages or more than the allowable number of handcarried items
or more than the prescribed dimensions for the bag or valise. The evidence on any
arbitrary behavior of a Pan Am employee or inexcusable negligence on the part of
the carrier is not clear from the petition. Absent such proof, we cannot hold the
carrier liable because of arbitrariness, discrimination, or mistreatment.
We are not by any means suggesting that passengers are always bound to the
stipulated amounts printed on a ticket, found in a contract of adhesion, or printed
elsewhere but referred to in handouts or forms. We simply recognize that the
reasons behind stipulations on liability limitations arise from the difficulty, if not
impossibility, of establishing with a clear preponderance of evidence the contents of
a lost valise or suitcase. Unless the contents are declared, it will always be the word
of a passenger against that of the airline. If the loss of life or property is caused by
the gross negligence or arbitrary acts of the airline or the contents of the lost
luggage are proved by satisfactory evidence other than the self-serving declarations
of one party, the Court will not hesitate to disregard the fine print in a contract of
adhesion. (See Sweet Lines Inc. v. Teves, supra) Otherwise, we are constrained to
rule that we have to enforce the contract as it is the only reasonable basis to arrive
at a just award.
#6EDNA DIAGO LHUILLIERvs.BRITISH AIRWAYS
FACTSOn April 28, 2005, petitioner Edna DiagoLhuillier filed a Complaint for
damages against respondent British Airways before the Regional Trial Court (RTC)
of Makati City. She alleged that on February 28, 2005, she took respondents flight
548 from London, United Kingdom to Rome, Italy. Once on board, she allegedly
requested Julian Halliday (Halliday), one of the respondents flight attendants, to
assist her in placing her hand-carried luggage in the overhead bin. However,
Halliday allegedly refused to help and assist her, and even sarcastically remarked
that "If I were to help all 300 passengers in this flight, I would have a broken back!"
Petitioner further alleged that when the plane was about to land in Rome, Italy,
another flight attendant, Nickolas Kerrigan (Kerrigan), singled her out from among
all the passengers in the business class section to lecture on plane safety. Allegedly,
Kerrigan made her appear to the other passengers to be ignorant, uneducated,
stupid, and in need of lecturing on the safety rules and regulations of the plane.
Affronted, petitioner assured Kerrigan that she knew the planes safety regulations
being a frequent traveler. Thereupon, Kerrigan allegedly thrust his face a mere few
centimeters away from that of the petitioner and menacingly told her that "We
dont like your attitude."
Upon arrival in Rome, petitioner complained to respondents ground manager and
demanded an apology. However, the latter declared that the flight stewards were
"only doing their job."
Thus, petitioner filed the complaint for damages.
On May 30, 2005, respondent, by way of special appearance through counsel, filed a
Motion to Dismiss on grounds of lack of jurisdiction over the case and over the
person of the respondent. Respondent alleged that only the courts of London,
United Kingdom or Rome, Italy, have jurisdiction over the complaint for damages
pursuant to the Warsaw Convention, Article 28(1) of which provides:
An action for damages must be brought at the option of the plaintiff, either before
the court of domicile of the carrier or his principal place of business, or where he
has a place of business through which the contract has been made, or before the
court of the place of destination.
Thus, since a) respondent is domiciled in London; b) respondents principal place of
business is in London; c) petitioner bought her ticket in Italy (through Jeepney
Travel S.A.S, in Rome); and d) Rome, Italy is petitioners place of destination, then it
follows that the complaint should only be filed in the proper courts of London,
United Kingdom or Rome, Italy.
Petitioners Arguments
Petitioner argues that her cause of action arose not from the contract of carriage,
but from the tortious conduct committed by airline personnel of respondent in
violation of the provisions of the Civil Code on Human Relations. Since her cause of
action was not predicated on the contract of carriage, petitioner asserts that she has
the option to pursue this case in this jurisdiction pursuant to Philippine laws.
Respondents Arguments
In contrast, respondent maintains that petitioners claim for damages fell within the
ambit of Article 28(1) of the Warsaw Convention. As such, the same can only be
filed before the courts of London, United Kingdom or Rome, Italy.
ISSUEWhether or not the Warsaw Convention is applicable?
RULINGYes
The Warsaw Convention applies because the air travel, where the alleged tortious
conduct occurred, was between the United Kingdom and Italy, which are both
signatories to the Warsaw Convention.
Article 1 of the Warsaw Convention provides:
1. This Convention applies to all international carriage of persons,
luggage or goods performed by aircraft for reward. It applies equally to
gratuitous carriage by aircraft performed by an air transport
undertaking.
2. For the purposes of this Convention the expression "international
carriage" means any carriage in which, according to the contract made
by the parties, the place of departure and the place of destination,
whether or not there be a break in the carriage or a transhipment, are
situated either within the territories of two High Contracting Parties, or
within the territory of a single High Contracting Party, if there is an
agreed stopping place within a territory subject to the sovereignty,
suzerainty, mandate or authority of another Power, even though that
Power is not a party to this Convention. A carriage without such an
agreed stopping place between territories subject to the sovereignty,
suzerainty, mandate or authority of the same High Contracting Party is
not deemed to be international for the purposes of this Convention.
(Emphasis supplied)
Thus, when the place of departure and the place of destination in a contract of
carriage are situated within the territories of two High Contracting Parties, said
carriage is deemed an "international carriage". The High Contracting Parties
referred to herein were the signatories to the Warsaw Convention and those which
subsequently adhered to it.
In the case at bench, petitioners place of departure was London, United Kingdom
while her place of destination was Rome, Italy. Both the United Kingdom and
Italy signed and ratified the Warsaw Convention. As such, the transport of the
petitioner is deemed to be an "international carriage" within the contemplation of
the Warsaw Convention.
Since the Warsaw Convention applies in the instant case, then the jurisdiction over
the subject matter of the action is governed by the provisions of the Warsaw
Convention.
Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the action
for damages before
1. the court where the carrier is domiciled;
2. the court where the carrier has its principal place of business;
3. the court where the carrier has an establishment by which the
contract has been made; or
4. the court of the place of destination.
In this case, it is not disputed that respondent is a British corporation domiciled in
London, United Kingdom with London as its principal place of business. Hence,
under the first and second jurisdictional rules, the petitioner may bring her case
before the courts of London in the United Kingdom. In the passenger ticket and
baggage check presented by both the petitioner and respondent, it appears that the
ticket was issued in Rome, Italy. Consequently, under the third jurisdictional rule,
the petitioner has the option to bring her case before the courts of Rome in Italy.
Finally, both the petitioner and respondent aver that the place of destination is
Rome, Italy, which is properly designated given the routing presented in the said
passenger ticket and baggage check. Accordingly, petitioner may bring her action
before the courts of Rome, Italy. We thus find that the RTC of Makati correctly ruled
that it does not have jurisdiction over the case filed by the petitioner.
We further held that Article 28(1) of the Warsaw Convention is jurisdictional in
character. Thus:
A number of reasons tends to support the characterization of Article 28(1) as a
jurisdiction and not a venue provision. First, the wording of Article 32, which
indicates the places where the action for damages "must" be brought, underscores
the mandatory nature of Article 28(1). Second, this characterization is consistent
with one of the objectives of the Convention, which is to "regulate in a uniform
manner the conditions of international transportation by air." Third, the
Convention does not contain any provision prescribing rules of jurisdiction other
than Article 28(1), which means that the phrase "rules as to jurisdiction" used in
Article 32 must refer only to Article 28(1). In fact, the last sentence of Article 32
specifically deals with the exclusive enumeration in Article 28(1) as "jurisdictions,"
which, as such, cannot be left to the will of the parties regardless of the time when
the damage occurred.
In other words, where the matter is governed by the Warsaw Convention,
jurisdiction takes on a dual concept. Jurisdiction in the international sense must be
established in accordance with Article 28(1) of the Warsaw Convention, following
which the jurisdiction of a particular court must be established pursuant to the
applicable domestic law. Only after the question of which court has jurisdiction is
determined will the issue of venue be taken up. This second question shall be
governed by the law of the court to which the case is submitted.
Tortious conduct as ground for the petitioners complaint is within the purview of
the Warsaw Convention.
#7UNITED AIRLINESvs.WILLIE J. UY
FACTSOn 13 October 1989 respondent Willie J. Uy, a revenue passenger on United
Airlines Flight No. 819 for the San Francisco Manila route, checked in together
with his luggage one piece of which was found to be overweight at the airline
counter. To his utter humiliation, an employee of petitioner rebuked him saying
that he should have known the maximum weight allowance to be 70 kgs. per bag
and that he should have packed his things accordingly. Then, in a loud voice in front
of the milling crowd, she told respondent to repack his things and transfer some of
them from the overweight luggage to the lighter ones. Not wishing to create further
scene, respondent acceded only to find his luggage still overweight. The airline then
billed him overweight charges which he offered to pay with a miscellaneous charge
order (MCO) or an airline pre-paid credit. However, the airline's employee, and
later its airport supervisor, adamantly refused to honor the MCO pointing out that
there were conflicting figures listed on it. Despite the explanation from respondent
that the last figure written on the MCO represented his balance, petitioner's
employees did not accommodate him. Faced with the prospect of leaving without
his luggage, respondent paid the overweight charges with his American Express
credit card.
Respondent's troubles did not end there. Upon arrival in Manila, he discovered that
one of his bags had been slashed and its contents stolen. He particularized his
losses to be around US $5,310.00. In a letter dated 16 October 1989 respondent
bewailed the insult, embarrassment and humiliating treatment he suffered in the
hands of United Airlines employees, notified petitioner of his loss and requested
reimbursement thereof. Petitioner United Airlines, through Central Baggage
Specialist Joan Kroll, did not refute any of respondent's allegations and mailed a
check representing the payment of his loss based on the maximum liability of US
$9.70 per pound. Respondent, thinking the amount to be grossly inadequate to
compensate him for his losses, as well as for the indignities he was subjected to,
sent two (2) more letters to petitioner airline, one dated 4 January 1990 through a
certain Atty. Pesigan, and another dated 28 October 1991 through Atty. Ramon U.
Ampil demanding an out-of-court settlement of P1,000,000.00. Petitioner United
Airlines did not accede to his demands.
Consequently, on 9 June 1992 respondent filed a complaint for damages against
United Airlines.
United Airlines moved to dismiss the complaint on the ground that respondent's
cause of action had prescribed, invoking Art. 29 of the Warsaw Convention which
provides
Art. 29 (1) The right to damages shall be extinguished if an action is not
brought within two (2) years, reckoned from the date of arrival at the
destination, or from the date on which the aircraft ought to have arrived,
or from the date on which the transportation stopped.
(2) The method of calculating the period of limitation shall be
determined by the law of the court to which the case is submitted.
Respondent countered that par. (1) of Art. 29 of the Warsaw Convention must be
reconciled with par. (2) thereof which states that "the method of calculating the
period of limitation shall be determined by the law of the court to which the case is
submitted." Interpreting thus, respondent noted that according to Philippine laws
the prescription of actions is interrupted "when they are filed before the court,
when there is a written extrajudicial demand by the creditors, and when there is
any written acknowledgment of the debt by the debtor." Since he made several
demands upon United Airlines: first, through his personal letter dated 16 October
1989; second, through a letter dated 4 January 1990 from Atty. Pesigan; and, finally,
through a letter dated 28 October 1991 written for him by Atty. Ampil, the two (2)-
year period of limitation had not yet been exhausted.
ISSUEWhether or not the Warsaw Convention is applicable?
RULINGYes
Petitioner likewise contends that the appellate court erred in ruling that
respondent's cause of action has not prescribed since delegates to the Warsaw
Convention clearly intended the two (2)-year limitation incorporated in Art. 29 as
an absolute bar to suit and not to be made subject to the various tolling provisions
of the laws of the forum. Petitioner argues that in construing the second paragraph
of Art. 29 private respondent cannot read into it Philippine rules on interruption of
prescriptive periods and state that his extrajudicial demand has interrupted the
period of prescription. American jurisprudence has declared that "Art. 29 (2) was
not intended to permit forums to consider local limitation tolling provisions but
only to let local law determine whether an action had been commenced within the
two-year period, since the method of commencing a suit varies from country to
country."
Within our jurisdiction we have held that the Warsaw Convention can be applied, or
ignored, depending on the peculiar facts presented by each case. Thus, we have
ruled that the Convention's provisions do not regulate or exclude liability for other
breaches of contract by the carrier or misconduct of its officers and employees, or
for some particular or exceptional type of damage. Neither may the Convention be
invoked to justify the disregard of some extraordinary sort of damage resulting to a
passenger and preclude recovery therefor beyond the limits set by said
Convention. Likewise, we have held that the Convention does not preclude the
operation of the Civil Code and other pertinent laws. It does not regulate, much less
exempt, the carrier from liability for damages for violating the rights of its
passengers under the contract of carriage, especially if willful misconduct on the
part of the carrier's employees is found or established.
Respondent's complaint reveals that he is suing on two (2) causes of action: (a) the
shabby and humiliating treatment he received from petitioner's employees at the
San Francisco Airport which caused him extreme embarrassment and social
humiliation; and, (b) the slashing of his luggage and the loss of his personal effects
amounting to US $5,310.00.
While his second cause of action an action for damages arising from theft or
damage to property or goods is well within the bounds of the Warsaw
Convention, his first cause of action an action for damages arising from the
misconduct of the airline employees and the violation of respondent's rights as
passenger clearly is not.
Consequently, insofar as the first cause of action is concerned, respondent's failure
to file his complaint within the two (2)-year limitation of the Warsaw Convention
does not bar his action since petitioner airline may still be held liable for breach of
other provisions of the Civil Code which prescribe a different period or procedure
for instituting the action, specifically, Art. 1146 thereof which prescribes four (4)
years for filing an action based on torts.
As for respondent's second cause of action, indeed the travauxpreparatories of the
Warsaw Convention reveal that the delegates thereto intended the two (2)-year
limitation incorporated in Art. 29 as an absolute bar to suit and not to be made
subject to the various tolling provisions of the laws of the forum. This therefore
forecloses the application of our own rules on interruption of prescriptive periods.
Article 29, par. (2), was intended only to let local laws determine whether an action
had been commenced within the two (2)-year period, and within our jurisdiction an
action shall be deemed commenced upon the filing of a complaint. Since it is
indisputable that respondent filed the present action beyond the two (2)-year time
frame his second cause of action must be barred. Nonetheless, it cannot be doubted
that respondent exerted efforts to immediately convey his loss to petitioner, even
employed the services of two (2) lawyers to follow up his claims, and that the filing
of the action itself was delayed because of petitioner's evasion.
In the same vein must we rule upon the circumstances brought before us. Verily,
respondent filed his complaint more than two (2) years later, beyond the period of
limitation prescribed by the Warsaw Convention for filing a claim for damages.
However, it is obvious that respondent was forestalled from immediately filing an
action because petitioner airline gave him the runaround, answering his letters but
not giving in to his demands. True, respondent should have already filed an action
at the first instance when his claims were denied by petitioner but the same could
only be due to his desire to make an out-of-court settlement for which he cannot be
faulted. Hence, despite the express mandate of Art. 29 of the Warsaw Convention
that an action for damages should be filed within two (2) years from the arrival at
the place of destination, such rule shall not be applied in the instant case because of
the delaying tactics employed by petitioner airline itself. Thus, private respondent's
second cause of action cannot be considered as time-barred under Art. 29 of the
Warsaw Convention.
1. SOSA v. ALVAREZ-MACHAIN (2004)
FACTS:In 1985, an agent of the Drug Enforcement Administration (DEA), Enrique
Camarena-Salazar, was captured on assignment in Mexico and taken to a house in
Guadalajara, where he was tortured over the course of a 2-day interrogation, then
murdered. Based in part on eyewitness testimony, DEA officials in the United States
came to believe that respondent Humberto Alvarez-Machain (Alvarez), a Mexican
physician, was present at the house and acted to prolong the agents life in order to
extend the interrogation and torture.
In 1990, a federal grand jury indicted Alvarez for the torture and
murder of Camarena-Salazar, and the United States District Court for the Central
District of California issued a warrant for his arrest. The DEA asked the Mexican
Government for help in getting Alvarez into the United States, but when the
requests and negotiations proved fruitless, the DEA approved a plan to hire
Mexican nationals to seize Alvarez and bring him to the United States for trial. As so
planned, a group of Mexicans, including petitioner Jose Francisco Sosa, abducted
Alvarez from his house, held him overnight in a motel, and brought him by private
plane to El Paso, Texas, where he was arrested by federal officers.
Once in American custody, Alvarez moved to dismiss the indictment on
the ground that his seizure was outrageous governmental conduct, and violated
the extradition treaty between the United States and Mexico. The District Court
agreed, the Ninth Circuit affirmed, and the SC reversed, holding that the fact of
Alvarezs forcible seizure did not affect the jurisdiction of a federal court. The case
was tried in 1992, and ended at the close of the Governments case, when the
District Court granted Alvarezs motion for a judgment of acquittal.
In 1993, after returning to Mexico , Alvarez sued the United States for
false arrest under the Federal Tort Claims Act (FTCA), which waives sovereign
immunity in suits for personal injury caused by the negligent or wrongful act
or omission of any [Government] employee while acting within the scope of his
office or employment,; and sued Sosa for violating the law of nations under the
Alien Tort statute (ATS), a 1789 law giving district courts original jurisdiction of
any civil action by an alien for a tort only, committed in violation of the law of
nations , 1350. The District Court dismissed the FTCA claim, but awarded
Alvarez summary judgment and damages on the ATS claim. The Ninth Circuit
affirmed the ATS judgment, but reversed the FTCA claims dismissal.
ISSUES:
(1) WON respondent Alvarez-Machains allegation that the Drug
Enforcement Administration instigated his abduction from Mexico for
criminal trial in the United States supports a claim against the
Government under the Federal Tort Claims Act (FTCA)
(2) WON he may recover under the Alien Tort Statute (ATS)
RULING: Respondent is not entitled to a remedy under either statute.
(1) The FTCAs exception to waiver of sovereign immunity for claims
arising in a foreign country, bars claims based on any injury
suffered in a foreign country, regardless of where the tortious act
or omission occurred.
The FTCA was designed primarily to remove the sovereign immunity of
the United States from suits in tort and, with certain specific exceptions, to render
the Government liable in tort as a private individual would be under like
circumstances. The Act accordingly gives federal district courts jurisdiction over
claims against the United States for injury caused by the negligent or wrongful act
or omission of any employee of the Government while acting within the scope of his
office or employment, under circumstances where the United States, if a private
person, would be liable to the claimant in accordance with the law of the place
where the act or omission occurred. But the Act also limits its waiver of sovereign
immunity in a number of ways. There is no waiver as to, e.g., [a]ny claim arising
out of the loss, miscarriage, or negligent transmission of letters or postal matter,
[a]ny claim for damages caused by the imposition or establishment of a quarantine
by the United States, or [a]ny claim arising from the activities of the Panama Canal
Company. Here the significant limitation on the waiver of immunity is the Acts
exception for [a]ny claim arising in a foreign country.
The exception on its face seems plainly applicable to the facts of this
case. Alvarezs arrest was said to be false, and thus tortious, only because, and
only to the extent that, it took place and endured in Mexico. Nonetheless, the Ninth
Circuit allowed the action to proceed under what is known as the headquarters
doctrine, concluding that, because Alvarezs abduction was the direct result of the discretion of the Legislative and Executive Branches in managing foreign affairs.
wrongful planning and direction by DEA agents in California, his claim did not Fifth, the Court has no congressional mandate to seek out and define new and
aris[e] in a foreign country. Because it will virtually always be possible to assert debatable violations of the law of nations, and modern indications of congressional
negligent activity occurring in the United States, such analysis must be viewed with understanding of the judicial role in the field have not affirmatively encouraged
skepticism. Two considerations confirm the Courts skepticism and lead it to reject greater judicial creativity.
the headquarters doctrine. The limit on judicial recognition adopted here is fatal to Alvarezs claim.
The first consideration applies to cases like this one, where harm was Alvarez contends that prohibition of arbitrary arrest has attained the status of
arguably caused both by action in the foreign country and planning in the United binding customary international law and that his arrest was arbitrary because no
States. Proximate cause is necessary to connect the domestic breach of duty with applicable law authorized it. He thus invokes a general prohibition of arbitrary
the action in the foreign country, for the headquarters behavior must be detention defined as officially sanctioned action exceeding positive authorization to
sufficiently close to the ultimate injury, and sufficiently important in producing it, to detain under the domestic law of some government. However, he cites little
make it reasonable to follow liability back to that behavior. A proximate cause authority that a rule so broad has the status of a binding customary norm today. He
connection is not itself sufficient to bar the foreign country exceptions application, certainly cites nothing to justify the federal courts in taking his rule as the predicate
since a given proximate cause may not be the harms exclusive proximate cause. for a federal lawsuit, for its implications would be breathtaking. It would create a
Here, for example, assuming the DEA officials direction was a proximate cause of cause of action for any seizure of an alien in violation of the Fourth Amendment
the abduction, so were the actions of Sosa and others in Mexico. Thus, at most, that now provides damages for such violations. And it would create a federal action
recognition of additional domestic causation leaves an open question whether the for arrests by state officers who simply exceed their authority under state law.
exception applies to Alvarezs claim. Alvarezs failure to marshal support for his rule is underscored by the Restatement
The second consideration is rooted in the fact that the harm occurred on (Third) of Foreign Relations Law of the United States, which refers to prolonged
foreign soil. There is good reason to think that Congress understood a claim arising arbitrary detention, not relatively brief detention in excess of positive authority.
in a foreign country to be a claim for injury or harm occurring in that country. This Whatever may be said for his broad principle, it expresses an aspiration exceeding
was the common usage of arising under in contemporary state borrowing statutes any binding customary rule with the specificity this Court requires.
used to determine which States limitations statute applied in cases with
transjurisdictional facts. And such language was interpreted in tort cases in just the
same way that the Court reads the FTCA today. Moreover, there is specific reason to
believe that using arising in to refer to place of harm was central to the foreign
country exceptions object. When the FTCA was passed, courts generally applied the
law of the place where the injury occurred in tort cases, which would have been
foreign law for a plaintiff injured in a foreign country. However, application of
foreign substantive law was what Congress intended to avoid by the foreign
country exception. Applying the headquarters doctrine would thus have thwarted
the exceptions object by recasting foreign injury claims as claims not arising in a
foreign country because of some domestic planning or negligence. Nor has the
headquarters doctrine outgrown its tension with the exception. The traditional
approach to choice of substantive tort law has lost favor, but many States still use
that analysis. And, in at least some cases the Ninth Circuits approach would treat as
arising at headquarters, even the later methodologies of choice point to the
application of foreign law. There is also no merit to an argument that the
headquarters doctrine should be permitted when a States choice of law approach
would not apply the foreign law of the place of injury. Congress did not write the
exception to apply when foreign law would be applied. Rather, the exception was
written at a time when arising in meant where the harm occurred; and the odds
are that Congress meant simply that when it used the phrase.
(2) Alvarez is not entitled to recover damages from Sosa under the
ATS.
The limited, implicit sanction to entertain the handful of international
law cum common law claims understood in 1789 is not authority to recognize the
ATS right of action Alvarez asserts here. Contrary to Alvarezs claim, the ATS is a
jurisdictional statute creating no new causes of action. This does not mean, as Sosa
contends, that the ATS was stillborn because any claim for relief required a further
statute expressly authorizing adoption of causes of action. Rather, the reasonable
inference from history and practice is that the ATS was intended to have practical
effect the moment it became law, on the understanding that the common law would
provide a cause of action for the modest number of international law violations
thought to carry personal liability at the time: offenses against ambassadors,
violation of safe conducts, and piracy. Sosas objections to this view are
unpersuasive.
While it is correct to assume that the First Congress understood that
district courts would recognize private causes of action for certain torts in violation
of the law of nations and that no development of law in the last two centuries has
categorically precluded federal courts from recognizing a claim under the law of
nations as an element of common law, there are good reasons for a restrained
conception of the discretion a federal court should exercise in considering such a
new cause of action. In deriving a standard for assessing Alvarezs particular claim,
it suffices to look to the historical antecedents, which persuade this Court that
federal courts should not recognize claims under federal common law for violations
of any international law norm with less definite content and acceptance among
civilized nations than the 18th-century paradigms familiar when 1350 was
enacted.
Several reasons argue for great caution in adapting the law of nations to
private rights. First, the prevailing conception of the common law has changed since
1790. When 1350 was enacted, the accepted conception was that the common law
was found or discovered, but now it is understood, in most cases where a court is
asked to state or formulate a common law principle in a new context, as made or
created. Hence, a judge deciding in reliance on an international norm will find a
substantial element of discretionary judgment in the decision. Second, along with,
and in part driven by, this conceptual development has come an equally significant
rethinking of the federal courts role in making common law. In Erie R.
Co. v. Tompkins, the US SC denied the existence of any federal general common
law, which largely withdrew to havens of specialty, with the general practice being
to look for legislative guidance before exercising innovative authority over
substantive law. Third, a decision to create a private right of action is better left to
legislative judgment in most cases. Fourth, the potential implications for the
foreign relations of the United States of recognizing private causes of action for
violating international law should make courts particularly wary of impinging on