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Wolgel v. Mexicana Airlines

decided: June 12, 1987.

JOSEPH D. WOLGEL AND EDYTHE R. WOLGEL, PLAINTIFF-APPELLANTS,
v.
MEXICANA AIRLINES, A MEXICAN CORPORATION, DEFENDANT-APPELLEE



Appeal from the the United States District Court for the Northern District of Illinois, Eastern Division. No. 86 C 3409 -- Charles R. Norgle, Judge.

Author: Flaum

Before WOOD, JR., and FLAUM, Circuit Judges, and GRANT, Senior District Judge.*fn*

FLAUM, Circuit Judge. Joseph and Edythe Wolgel appeal from the dismissal of their claim for discriminatory "bumping" under § 404(b) of the Federal Aviation Act of 1958, 49 U.S.C. app. § 1374(b) (1982). The district court held that their claim was time-barred by the two-year statute of limitations contained in the Warsaw Convention. We reverse and remand for further proceedings.

I.

Because the Wolgels' complaint was dismissed for failure to state a claim under Federal rule of Civil Procedure 12(b)(6), we must accept their factual allegations as true. See Ed Miniat, Inc. v. Globe Life Ins. Group, 805 F.2d 732, 733 (7th Cir. 1986). According to their complaint, Mr. and Mrs. Wolgel arrived at O'Hare Airport on April 17, 1981, with two round-trip tickets that they had purchased from the defendant Mexican Airlines for travel on that day from Chicago to Acapulco, Mexico. The Wolgels presented their tickets and baggage to Mexicana's passenger agent, they were informed that no seats were available on their flight. In short, the Wolgels had been "bumped." The Wolgels assert that this incident occurred pursuant to a policy of substantial and consistent overbooking and overselling of confirmed reservation passenger seating.

The Wolgels submitted a claim for boarding compensation, as provided for by Civil Aeronautics Board regulations, but Mexicana refused to compensate them. Consequently, on April 17, 1986, exactly five years after their injury, the Wolgels filed suit in the Circuit Court of Cook County, alleging breach of contract, tortious breach of a contractual relationship between the parties, and discriminatory bumping (bumping in violation of Mexicana's own priority rules) in violation of § 404(b) of the Federal Aviation Act, 49 U.S.C. app. § 1374(b) (1982). On May 14, 1986, Mexicana removed the suit to federal district court to 28 U.S.C. § 1441, on the ground that Mexicana, a corporation wholly owned by the government of Mexico, is a foreign state within the meaning of the foreign Sovereign Immunities Act, 28 U.S.C.. §§ 1602-1611 (1982). Mexicana then moved to dismiss the complaint on the ground that the Wolgels' action was time-barred under the two-year statute of limitations contained in Article 29 of the Warsaw Convention ("The Convention"). The district court granted Mexicana's motion and dismissed the complaint. This appeal followed.

II.

The Wolgels base their federal claim on § 404(b) of the Federal Aviation Act ("FAA"), 49 U.S.C. app. § 1374(b) (1982) (repealed 1983). Section 404(b) prohibited domestic and foreign air carriers from subjecting any person to "any unjust discrimination or any undue or unreasonable prejudice or disadvantage in any respect whatsoever."*fn1 In Karp v. North Central Airlines, 583 F.2d 364 (7th Cir. 1978), this court held that § 404(b) created an implied private right of action for passengers of a domestic airline who were bumped due to a failure of the airline to follow its own boarding priority rules. However, neither in Karp nor in later cases did this court establish a statute of limitations for such actions. The Wolgels urge us to borrow the Illinois "catch-all" statute of limitations, which provides a five-year period in which to bring suit. See Ill. Ann. Stat. ch. 110, para. 13-205 (Smith-Hurd 1984).

Mexicana Airlines argues, however, that the Warsaw Convention,*fn2 49 U.S.C. § 1502 (1982) (note), is the Wolgels' exclusive remedy. The Warsaw Convention is a multilateral treaty to which both the United States and Mexico are adherents. The Convention provides for uniform documentation for passengers and cargo on international flight, and limits the liability of air carriers in the event of accident or loss, In re Aircrash in Bali, 684 F.2d 1301, 1304-05 (9th Cir. 1982). The Convention also provides a remedy for claims of personal injury, loss of or damage to baggage, and delay. Actions based on the Convention must be brought within two years. See Warsaw Conv., Art. 29(1). The district court held that the Convention provided the Wolgels' only remedy. Because the Wolgels did not file suit until five years after their injury, the district court held that their claim was time-barred.

We conclude that the Wolgels' claim falls outside the Warsaw Convention, because the Wolgels seek damages for the bumping itself, rather than incidental damages due to their delay. Therefore, the two-year statute of limitations for claims covered by the Warsaw convention does not apply to this case. Borrowing from the analogous state statute of limitations, we hold that the applicable statute of limitations for a claim of discriminatory bumping under the FAA if five years. Because the Wolgels' complaint was timely filed, we reverse the judgment of the district court and remand for further proceedings.

A.

Article 19 of the Warsaw Convention provides that "the carrier shall be liable for damage occasioned by delay in the transportation by air of passengers, baggage, or goods." The first question in this case is whether this provision extends to claims of discriminatory bumping. We conclude that it does not.

"'Treaties are construed more liberally than private agreements, and to ascertain their meaning we may look beyond the written words to the history of the treaty, the negotiations, and the practical construction adopted by the parties.'" Air France v. Saks, 470 U.S. 392, 396, 84 L. Ed. 2d 289, 105 S. Ct. 1338 (1985) (quoting Choctaw Nation of Indians v. United States, 318 U.S. 423, 431-32, 87 L. Ed. 877, 63 S. Ct. 672 (1943)). The history of the Warsaw Convention indicates that the drafters of the Convention did not intend the word "delay" in Article 19 to extend to claims, such as the Wolgels;, that rise from the total nonperformance of a contract.

The Second International Diplomatic Conference on Private Aeronautical Law was convened in Warsaw, Poland on October 4, 1929. On the fourth day of the conference, the conference delegates discussed Article 21, the predecessor of Article 19. Mr. Ambrosini, The delegate from ...


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