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Cruz v. American Airlines

February 10, 2004

MARIA V. CRUZ, FOR HERSELF AND AS REPRESENTATIVE OF GUSTAVO CRUZ AND JOAQUIN RODRIGUEZ MINORS, ET AL., APPELLANTS
v.
AMERICAN AIRLINES, INC., APPELLEE



Appeal from the United States District Court for the District of Columbia (No. 96cv02817)

Before: Edwards, Sentelle and Tatel, Circuit Judges.

The opinion of the court was delivered by: Sentelle, Circuit Judge

Argued December 4, 2003

Several American Airlines, Inc. passengers claim that they and others similarly situated lost their luggage on international American flights. The passengers sued American in federal court seeking damages for their lost or damaged luggage and various forms of injunctive and declaratory relief. They sued under the Warsaw Convention, a treaty that governs claims for property damage arising out of international transportation of people and property.*fn1 The individual plaintiffs also moved to certify their suit as a class action on behalf of two categories of passengers. The district court granted American partial summary judgment and declined to certify the class. Plaintiffs now appeal both of those rulings. Because they have shown no reversible error, we affirm the judgment of the district court.

I. Background

A. The Cruzes and their luggage

This case arises from some bad luck the Cruz family purportedly had with their luggage. (We glean the statement of facts that follows from the parties' statements of material undisputed facts, unless otherwise indicated. See D.D.C. Local Civ. R. 56.1.) In 1995, five members of the Cruz family flew on an American Airlines flight from Washington D.C., Reagan National Airport to Santo Domingo, the Dominican Republic, checking two bags each. When they arrived in Santo Domingo, the Cruzes reported to American that five of their bags were missing.

The Cruzes subsequently filed a statement of property loss with American, claiming that the bags were worth $15,000. American, however, offered the Cruzes no compensation. American refused to offer compensation because, according to American's records, the Cruzes had filed their claims significantly more than 30 days after their loss. American's policy at the time was not to settle lost-baggage claims voluntarily if the claimant submitted a lost-property form more than 30 days after the date of loss, though there were (unspecified) exceptions to this internal policy (we refer to this policy as the "30-day rule").

The Cruzes' luggage travails did not end there. In 1997, Beato Cruz, who had been on the previous American flight, again flew on an American flight, this time from the Dominican Republic to New York City. When he arrived in New York, according to Cruz's deposition testimony, his bag was badly damaged and was missing its contents.

The next day, Cruz filed a statement of lost property with American, declaring that the value of his bag was $3,890. That same day American gave Cruz a $100 travel voucher. When he received the form, Cruz signed his name next to the following statement:

CUSTOMER RECEIPT AND RELEASE: THE ABOVE SUM RECEIVED FROM AMERICAN AIRLINES IS IN FULL SATISFACTION OF ALL CLAIMS, LIABILITIES AND DEMANDS THAT I MAY HAVE AGAINST SAID COMPANY.

Several months later, American issued Cruz a check for $634.90 as compensation for his damaged luggage. The check came with a letter stating that this figure was the maximum amount of compensation American was legally obligated to provide under the terms of its international tariff governing baggage loss and under the Warsaw Convention. Article 18 of the Warsaw Convention generally provides passengers a cause of action for damages against international carriers for lost or damaged checked bags. Under Article 22(2), that liability is limited to $9.07 per pound of lost or damaged baggage. American's international tariffs - which govern the rates for its international flights and which under federal law it must file with the Department of Transportation, see 49 U.S.C. § 41504 (2000) - specify a default "deemed weight" for Caribbean passengers' lost bags. This deemed weight, under the tariffs, is used to calculate American's liability under the Warsaw Convention. The tariffs, specifically, provide that the baggage weight of a Caribbean passenger with a single bag is assumed to be 100 pounds - the bag's maximum allowable weight - unless the passenger's ticket states the actual weight.

American calculated the $634.90 it offered Cruz based on a flawed understanding of the deemed weight of Cruz's bag. American computed that figure by multiplying $9.07 by 70 pounds, which it stated was the maximum allowable weight of Cruz's bag under its tariffs. The true maximum weight of Cruz's bag under the tariffs was 100 pounds. Therefore, the calculation underestimated the per-bag limit applicable to Cruz's lost bag by at least $272.10 ($907 minus $634.90).

Cruz cashed the $634.90 check. The back of the check had a legend of release on it, which stated that:

By endorsement or deposit of this check I (we) hereby release American Airlines, Inc., its agents, including other airlines providing transportation, its employee's [sic] and representatives from all claims rising in connection with the loss, damage or delay of my belongings transported or authorized to have been transported on the travel date indicated on the remittance advise.

Cruz signed his name next to this statement when he endorsed the check. At that point, Cruz had already retained his current attorney and was a party to this lawsuit against American, which at the time only involved the Cruz family's 1995 trip. Cruz also testified at his deposition that, when he cashed the check, he believed he could sue American for "the additional amount [he] believed [he] was owed," which, according to positions he later took, was the bag's fair value. Again, Cruz's position at the time was that the fair value of his bag was $3,890.

B. The first phase of litigation

On December 20, 1996, five Cruz family members, including Beato Cruz, sued American in federal district court to recover the value of their bags. Relying on the Warsaw Convention, they sought damages equal to the fair value of the contents of their lost and damaged luggage. They also alleged that American unlawfully required them to complete a lostproperty form and illegally applied the 30-day rule to them. The Cruzes accordingly sought both a declaration that these procedures were illegal and an injunction preventing American from applying the procedures to future passengers.

The district court dismissed plaintiffs' declaratory and injunctive claims for lack of Article III standing. The court reasoned that as American admitted, it had incorrectly required the Cruzes to fill out a claim form, mistakenly applied the 30-day rule to the Cruzes' claims, and agreed to process the Cruzes' claims as timely filed, the Cruzes personally stood to gain little from the requested declaratory and injunctive relief. Moreover, reasoned the court, the possibility that American would in similar circumstances again misapply those procedures to the Cruzes was highly improbable. The district court concluded, therefore, that the Cruzes had no standing to raise the declaratory and injunctive claims.

American also moved for partial summary judgment on the Cruzes' damages claims to the extent the Cruzes sought damages in excess of the Warsaw Convention's $9.07 perpound liability limit. American, however, conceded that it was liable to the Cruzes to the extent of $9.07 per pound of their lost bags. Consequently, American also moved for entry of final judgment in the Cruzes' favor to the extent of $9.07 times the poundage of the Cruzes' bags.

The district court granted both of American's motions, holding that American's liability to the Cruzes under the Warsaw Convention was limited to $9.07 per pound of lost luggage. The Cruzes had argued that the Warsaw Convention's liability limit did not apply because American had failed to state the weight of each suitcase on the Cruzes' baggage stubs, as required by Article 4(3)(f) of the Convention. The district court rejected this argument. Because American conceded liability to the Cruzes and moved for partial judgment in the Cruzes' favor, the district court entered a judgment in the Cruzes' favor to the extent of $9.07 times the poundage of their bags.

While American's summary-judgment motions were pending, the Cruzes moved to amend their complaint. Their motion sought to transform their individual claims into classaction claims on behalf of others who had lost their luggage in similar circumstances. That motion was pending when the district court ruled on American's summary-judgment motions. After its ruling, the district court dismissed the Cruzes' motion to amend as moot.

The Cruzes successfully appealed the district court's judgment to this Court. On appeal, the Cruzes attacked, among other things, the district court's ruling regarding the Warsaw Convention's liability limit. In particular, they argued that the liability limit did not apply to the Cruzes' damages claims, because American had failed to record the baggage weight of each suitcase on the Cruzes' baggage stubs. We accepted that argument and accordingly vacated and remanded the district court's judgment. Cruz v. Am. Airlines, Inc., 193 F.3d 526, 528-30 (D.C. Cir. 1999). Cruz did not, however, address whether the district court's standing rulings were correct. Nor did Cruz address whether the district court correctly dismissed as moot the Cruzes' motion to amend ...


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