Case of the Day: Underwriters at Lloyds v. Expeditors Korea Ltd., 2018 U.S. App. LEXIS 3743 (11th Cir. Feb. 16, 2018)

Summary:

Defendant shipping companies damaged a shipment of semiconductors that was supposed to be delivered from Incheon, South Korea to Orlando, Florida via air cargo. The shipment was supposed to go directly to Orlando, but ended up transiting through Miami, from which the shipment was delivered to Orlando by truck. The damage occurred between Miami and Orlando. Plaintiff insurer paid out approximately $900,000 to the owner of the shipment, and sued the shipping companies. District Court found the Montreal Convention capped the damages because the shipment was delivered as air cargo, and capped the damages at a little less than $200,000. Plaintiff appealed.

Plaintiff insurer argued the air transit ends when the cargo is loaded onto the truck to leave the airport, while the defendant shippers argued the air transit ends when the cargo left the airport premises. Rejecting both arguments, the court held that the air carriage ended when the shipment arrived at Miami and was unloaded into the warehouse outside of the airport premises. The court then found the Convention did not apply because the damages occurred either at the warehouse or in the truck transit, and remanded to the district court to find damages in accordance with the waybill.

Takeaway:

Yet another Montreal Convention case that involves very difficult line-drawing! The court concludes with a remark Justice Scalia about the Warsaw Convention: "How many smart people from how many countries came up with this—with this formulation? You think they . . . could have said it more clearly." Tr. of Oral Argument at 21, El Al Israel Airlines, Ltd. v. Tseng, 525 U.S. 155, 119 S. Ct. 662, 142 L. Ed. 2d 576 (1999)  (referring to Articles 17 and 24 of the Warsaw Convention).