United States District Court, N.D. Illinois, Eastern Division
TOKIO MARINE & NICHIDO FIRE INSURANCE CO., LTD, a/s/o NISSAN MOTOR CO., LTD., and NISSAN MOTOR CO., LTD., Plaintiff,
DANZAS CORPORATION, d/b/a DHL GLOBAL EXPRESS FORWARDING, and AIR EXPRESS INTERNATIONAL USA, INC., d/b/a DHL GLOBAL FORWARDING, Defendants. DANZAS CORPORATION, d/b/a DHL GLOBAL EXPRESS FORWARDING, and AIR EXPRESS INTERNATIONAL USA, INC., d/b/a DHL GLOBAL FORWARDING, Third-Party Plaintiffs, CARGO AIRPORT SERVICES USA, LLC d/b/a CONSOLIDATED AVIATION SERVICES a/k/a CONSOLIDATED AVIATION SERVICES, Third-Party Defendant.
OPINION AND ORDER
L. ELLIS United States District Judge.
Tokio Marine & Nichido Fire Insurance Co, Ltd.
(“Tokio”), as the subrogee of Nissan Motor Co.,
Ltd. (“Nissan”), sued Defendants/Third-Party
Plaintiffs Danzas Corporation d/b/a DHL Global Express
Forwarding and Air Express International d/b/a DHL Global
Forwarding (collectively, “DHL”) alleging that as
a result of mishandling on the part of DHL, a shipment of
lithium ion batteries (the “Batteries”) that
Nissan contracted with DHL to ship from O'Hare
International Airport in Chicago to Narita International
Airport in Tokyo, Japan, was damaged to the point that the
shipment was a total loss. DHL answered Tokio's complaint
and filed its own third-party complaint against Third-Party
Defendant Cargo Airport Services USA (“CAS”),
alleging that any damage to the Batteries was the result of
CAS' negligence as the ground handler in preparing the
batteries for shipment. DHL brings claims for negligence,
breach of contract, contribution, and indemnification against
CAS. CAS now moves for judgment arguing that DHL's claims
are time-barred pursuant to Article 35 of the Convention for
the Unification of Certain Rules for International Carriage
by Air (the “Montreal Convention”), May 28, 1999
(entered into force on Nov. 4, 2003), S. Treaty Doc. No.
106-45, 1999 WL 33292734 (2000), which bars actions for
damages arising out of airfreight transactions, unless the
action is brought within two years from the conclusion of the
shipment in question. Id. Art. 35. Because the
Montreal Convention's two-year limitations period does
not apply to claims for contribution or indemnification the
Court denies the motion with respect to these claims.
March 7, 2015, Nissan contracted with DHL to ship the
Batteries from the United States to Japan. DHL took
possession of the Batteries on March 7, 2015, and delivered
them to Japan, arriving on some subsequent
date. Tokio alleges that the Batteries arrived
damaged and completely unusable. Its subrogor, Nissan, filed
an insurance claim with Tokio for the full value of the
damaged Batteries, which Tokio paid. Tokio then brought suit
against DHL to recover the value of the damaged Batteries. On
May 8, 2017, DHL filed the present Third-Party Complaint
against CAS as the ground handler seeking contribution and
indemnification for any damages DHL may ultimately owe to
Tokio and also alleging CAS breached its contract with DHL
and was negligent in its handling of the Batteries. DHL
asserts that any liability it may face related to damage to
the Batteries is directly and entirely attributable to
CAS' improper handling and preparation of the Batteries
motion for judgment on the pleadings under Rule 12(c) of the
Federal Rules of Civil Procedure is governed by the same
standards as a motion to dismiss for failure to state a claim
under Rule 12(b)(6).” Adams v. City of
Indianapolis, 742 F.3d 720, 727-28 (7th Cir. 2014). A
motion to dismiss under Rule 12(b)(6) challenges the
sufficiency of the complaint, not its merits. Fed.R.Civ.P.
12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510,
1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion
to dismiss, the Court accepts as true all well-pleaded facts
in the plaintiff's complaint and draws all reasonable
inferences from those facts in the plaintiff's favor.
AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th
Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint
must not only provide the defendant with fair notice of a
claim's basis but must also be facially plausible.
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S.
at 678, 129 S.Ct. 1937.
moves for judgment on the pleadings on the Third-Party
Complaint arguing that because all of the claims relate to
the handling of an international airfreight shipment of
cargo, they are governed by the terms of the Montreal
Convention, and that pursuant to the Montreal Convention, a
party must bring all claims for damages within two years of
the completion of the shipment in question. The Montreal
Convention states, “The right to damages shall be
extinguished if an action is not brought within a period of
two years, reckoned from the date of arrival at the
destination[.]” Montreal Convention, Art. 35. CAS
argues that this bar applies to DHL's Third-Party Complaint
and therefore, the Court must dismiss it. DHL responds that
this bar does not apply to claims for contribution and
indemnification and that CAS has not adequately established
that it is a covered entity under the Montreal
few courts have addressed this issue head on, with the Ninth
Circuit being the only circuit court to do so. In Chubb
Insurance Company of Europe S.A. v. Menlo Worldwide
Forwarding, Inc., the Ninth Circuit held that Article 35
does not apply to claims for contribution and
indemnification. 634 F.3d 1023, 1028 (9th Cir. 2011). Just as
here, Chubb dealt with a third-party complaint by a
contract carrier against one of the agents involved in the
actual transportation of the cargo. The court found Article
35 to be a narrow limitation on actions applying only to the
“right to damages.” Id. at 1026.
neither Article 35 nor the rest of the Montreal Convention
expressly defines the “right to damages, ” the
court engaged in a textual analysis, and determined that when
the Montreal Convention is read as a whole, “its
contours become clear.” Id. The court
determined that the “right to damages” in Article
35 “is the cause of action under the Montreal
Convention by which a passenger or consigner may hold a
carrier liable for damage sustained to passengers, baggage,
or cargo.” Id. A claim for contribution or
indemnification is not such a claim; it is derived from such
a claim, but is not such a claim itself. Id.
court in Chubb went on to note that the Montreal
Convention expressly states that its limitations on damages
shall not “prejudice the question whether a person
liable for damage in accordance with its provisions has a
right of recourse against any other person.” Montreal
Convention, Art. 37. The court reasoned that to avoid a
conflict between the text of Article 35 and Article 37, the
time bar in Article 35 cannot apply to suits between carriers
seeking contribution and indemnification. Chubb, 634
F.3d at 1027.
Ninth Circuit also noted that Article 45 specifically notes
that if an action for damages is brought against only one
carrier when more than one carrier is involved in a shipment,
the carrier against whom the action for damages was brought
“shall have the right to require the other carrier to
be joined in the proceedings, the procedure and effects being
governed by the law of the court seized on the case.”
Id. (quoting Montreal Convention, Art. 45). This
article clearly provides that in a situation such as in the
present case where the plaintiff sues only the contract
carrier but some other carrier may also be liable, the
contract carrier must be allowed to join the third-party
carrier to the suit and such joinder will be governed by the
local rules of that court, not the rules of Article 35.
Court agrees with the above analysis from the Ninth Circuit.
It is clear that when read as a whole, the Montreal
Convention does not require a party to bring claims for
indemnification and contribution within the two-year
limitations period in Article 35.
argues that the Court should not follow the decision in
Chubb, stating that it was wrongly decided. CAS
asserts that the Ninth Circuit opinion has three major flaws:
first it improperly equated the singular “damage”
with the plural “damages;” second, it
misidentified a Canadian trial level court as the Ontario
Supreme Court of Canada when declining to follow prior cases
interpreting the predecessor to the Montreal Convention, the
Convention for the Unification of Certain Rules Relating to
International Transportation by Air, Oct. 12, 1929, (the
“Warsaw Convention”) 49 Stat. 3000, T.S. No. 876
(1934), reprinted in 49 ...