CENTERLINE. Aviation. Eleventh Circuit Affirms Forum Non Conveniens Dismissal in Brazil Accident Litigation. Background. February 2011.

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1 Aviation CENTERLINE February 2011 Eleventh Circuit Affirms Forum Non Conveniens Dismissal in Brazil Accident Litigation Lyndall M. Lambert Laura M. Gonzalez On February 1, 2011, the Eleventh Circuit Court of Appeals held that the district court did not abuse its discretion when it dismissed several lawsuits filed by the families of victims of an airline crash in Brazil on forum non conveniens grounds. The decision, Tazoe v. Airbus S.A.S., 1 is the latest in a series of foreign air crash cases in which courts in the Eleventh Circuit have dismissed claims by foreign plaintiffs in favor of foreign jurisdictions. 2 In This Issue Eleventh Circuit Affirms Forum Non Conveniens Dismissal in Brazil Accident Litigation... 1 California District Court Requests Input From the U.S. and DOT on Preemption Issues Involving Automated Check-In Kiosks... 5 Background On July 17, 2007, TAM Flight 3054, an A aircraft, overran the runway upon landing in São Paulo, Brazil, and crashed into a warehouse and fueling station, killing all 187 passengers and crew and 12 ground personnel. One passenger, Ricardo Tazoe, was a U.S. citizen who lived in Florida. All other victims were citizens and residents of Brazil. The accident resulted in two parliamentary investigations, two criminal investigations, and an investigation by the Centro de Investigação e Pravenção de Acidentes Aeronáuticos, Brazil's aviation accident investigation board. Numerous civil lawsuits were filed in Brazil. The personal representatives of the estates of the deceased passengers filed more than 75 actions in the Southern District of Florida against TAM Linhas Aereas (the Brazilian aircraft operator), Airbus S.A.S. (the French manufacturer of the aircraft), Goodrich Corporation (the U.S. manufacturer of the thrust reversers), IAE International Aero Engines AG (the Swiss manufacturer of the engines), and Pegasus Aviation IV, Inc. (the U.S. lessor of the aircraft). The manufacturing defendants filed third-party actions against the airport authority that operated the São Paulo airport, which never entered an appearance in the Florida lawsuits. After substantial pre-trial discovery and partial settlements by TAM of most of the Florida cases, the manufacturing defendants moved to dismiss the complaints on the ground of forum non conveniens. 3 In August 2009, the district court granted the motion, finding that the lawsuits should be dismissed and refiled in Brazil, the more convenient forum. 4

2 Eleventh Circuit Opinion The Court of Appeals found no abuse of discretion by the district court in dismissing the claims of the 76 foreign plaintiffs and sole U.S. plaintiff. 5 The manufacturing defendants met their burden of proving: (1) an adequate alternative forum was available; (2) the public and private factors weighed in favor of dismissal; and (3) the plaintiffs could reinstate their lawsuits in the alternative forum without undue inconvenience. The Court of Appeals separately considered the dismissal of the complaints of the Brazilian plaintiffs and the U.S. plaintiff. The Brazilian Plaintiffs The Court found that Brazil was an available forum because the manufacturing defendants had stipulated, as conditions of dismissal, that they were amenable to process in Brazil, would toll any statute of limitation defense, would make documents and witnesses available in Brazil, and would respect any final judgment in Brazil. This stipulation further served to satisfy the element that the plaintiffs could reinstate their lawsuits in the alternative forum without undue inconvenience. Additionally, other federal courts have determined that the courts in Brazil provides sufficient remedies in similar cases. 6 [T]he vast majority of the relevant liability and damages evidence was located in Brazil, including the wreckage, the digital flight data and cockpit voice recorders, the results of the government investigation, evidence relating to claims for damages and the location of the accident site. The Court determined that the private and public interest factors weighed in favor of dismissal. With respect to the private interest factors, the vast majority of the relevant liability and damages evidence was located in Brazil, including the wreckage, the digital flight data and cockpit voice recorders, the results of the government investigation, evidence relating to claims for damages and the location of the accident site. Significant costs would be incurred by proceeding with the trial in Florida, as many of the accident reports and the testimony of many witnesses were in Portuguese and would require translation into English. Further, the district court had no authority to compel foreign witnesses to testify in its jurisdiction. About This Newsletter Please direct all inquiries to: Christopher G. Kelly, Editor christopher.kelly@hklaw.com Judith R. Nemsick, Editor judith.nemsick@hklaw.com Marc L. Antonecchia, Editor marc.antonecchia@hklaw.com Holland & Knight LLP 31 West 52 nd Street New York, NY Information contained in this newsletter is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel. Holland & Knight lawyers are available to make presentations on a wide variety of aviation law issues. 2

3 The Court further found that the manufacturers would be inconvenienced by a Florida action due to their inability to implead potentially liable third parties such as the Brazilian airport and aviation authorities. The Court rejected the plaintiffs' argument that the manufacturers could seek contribution from these entities in a separate proceeding in Brazil on the basis that the manufacturing defendants' defense would be considerably weakened by the jurors seeing "empty chairs" instead of third parties and that judicial economy requires all claims to be resolved in a single proceeding. 7 Although the plaintiffs argued that the district court had already proven itself to be a convenient forum based on the extensive discovery (including more than 145 depositions of surviving family members concerning damages issues conducted in Miami) that had already taken place, the Court of Appeals concluded that this factor alone did not mean a trial in Florida would be "easy, expeditious, and inexpensive." The Court further pointed out that the family members had been actively participating in, and benefiting from, this discovery. 8 With respect to the public interest factors, the Court found that, with more than 75 separate actions filed in the Southern District of Florida, the number of hearings and disputes on discovery alone had demonstrated that the litigation would overburden the Florida court system. Additionally, because this accident occurred in Brazil and involved Brazilian citizens, Brazil had a "superior interest in [the] resolution of these claims." 9 The likely application of Brazilian law further weighed in favor of Brazil as a more convenient location for the litigation. The Court acknowledged that a district court must find positive evidence of unusually extreme circumstances, and should be thoroughly convinced that material injustice is manifest before exercising any such discretion as may exist to deny a United States citizen access to the courts of this country." The U.S. Plaintiff The Court of Appeals analyzed the claim of the U.S. plaintiff separately, recognizing that a U.S. plaintiff's choice of a forum is entitled to "somewhat more deference" than that of a foreign plaintiff. 10 The Court acknowledged that, in such cases, a district court must find positive evidence of unusually extreme circumstances, and should be thoroughly convinced that material injustice is manifest before exercising any such discretion as may exist to deny a United States citizen access to the courts of this country. 11 The Court of Appeals determined that the district court adequately supported its decision with "persuasive analysis" 12 by finding that a trial in Florida would deprive the manufacturers of the ability to compel third-party witnesses, obtain documents from those witnesses and implead potentially liable third parties factors that would be "both unusually extreme and materially unjust." 13 These factors, in combination with the other private and public interest factors, weighed in favor of dismissing the suit, despite the additional deference given to a U.S. citizen. Conclusion The Eleventh Circuit's opinion joins numerous other recent federal court decisions dismissing claims (including claims by U.S. plaintiffs) arising from foreign airline accidents occurring outside the U.S. 14 Significantly, the Court of Appeals was not swayed in this case by the presence of a U.S. plaintiff or the extensive liability and damages discovery that already had taken place in Florida. 3

4 For more information, contact: Lyndall M. Lambert Laura M. Gonzalez Notes 1 F.3d, 2011 WL (11th Cir. February 1, 2011). 2 See, e.g., Pierre-Louis v. Newvac Corp., 584 F.3d 1052 (11th Cir. 2009), cert. denied, 130 S. Ct (2010); King v. Cessna Aircraft, Co., 562 F.3d 1374 (11th Cir. 2009); Leon v. Millon Air, Inc., 251 F.3d 1305 (11th Cir. 2001); Satz v. McDonnell Douglas Corp., 244 F.3d 1279 (11th Cir. 2001); Da Rocha v. Bell Helicopter Textron, Inc., 451 F. Supp. 2d 1318 (S.D. Fla. 2006). 3 Neither TAM nor Pegasus Aviation joined in or opposed the forum non conveniens motion. 4 Tazoe v. Aereas, No CIV, 2009 WL (S.D. Fla. Aug. 24, 2009). 5 Plaintiff Roberto Tazoe, personal representative of the estate of Ricardo Tazoe, is a U.S. citizen and resident of Florida. 6 Tazoe, 2011 WL at *4 (citing In re Air Crash Near Peixoto de Azeveda, Brazil, 574 F. Supp. 2d 272 (E.D.N.Y. 2008); Da Rocha, 451 F. Supp. 2d at 1322). 7 Id. at * Id. at *7. 9 Id. 10 Id. at *9 (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256 n.23 (1981)). 11 Id. (citing SME Racks, Inc. v. Sistemas Mecanicos Para Electronica, S.A., 382 F.3d 1097, 1101 (11th Cir. 2004)). 12 Tazoe, 2011 WL at *9. 13 Tazoe, 2009 WL at *7. 14 See, e.g., Pierre-Louis, 584 F.3d at ; Lleras v. Excelaire Servs. Inc., 2009 WL , 354 Fed. Appx. 585 (2d Cir. 2009); Clerides v. Boeing Co., 534 F.3d 623 (7th Cir. 2008); In re Air Crash Disaster Over Makassar Strait, Sulawesi, No. 09-cv-3805, 2011 WL (N.D. Ill. Jan. 11, 2011); In re Air Crash Over the Mid-Atlantic on June 1, 2009, F. Supp. 2d, 2010 WL (N.D. Cal. Oct. 4, 2010) (dismissing over 70 foreign and two U.S. plaintiffs); Pettitt v. Boeing Co., No. 09 C 3709, 2010 WL (N.D. Ill. Sept. 28, 2010); Esheva v. Siberia Airlines, 499 F. Supp. 2d 493 (S.D.N.Y. 2007); In re Air Crash Near Athens, Greece on Aug. 14, 2005, 479 F. Supp. 2d 792 (N.D. Ill. 2007) (dismissing over 80 foreign and 2 U.S. plaintiffs); Van Schijndel v. Boeing Co., 434 F. Supp. 2d 766 (C.D. Cal. 2006), aff'd, 263 Fed. Appx. 555 (9th Cir. 2008). 4

5 California District Court Requests Input From the U.S. and DOT on Preemption Issues Involving Automated Check-In Kiosks Marc L. Antonecchia Federal district courts continue to assess whether and to what extent the Air Carrier Access Act 1 and the Airline Deregulation Act (ADA) 2 preempt state statutes and common law claims relating to airline services provided to individuals with disabilities. A pending action in the Northern District of California 3 is particularly noteworthy because the district court has requested the U.S. and the U.S. Department of Transportation (DOT) to provide input as to whether DOT comprehensively regulates the extent to which alternative facilities are made available to blind individuals at airports in the United States from the ticketing section through the departure/arrival gates. This input will likely have a significant effect on the outcome of the litigation because in dispute is whether the defendant airline's use of a certain type of automated [The DOT's] input will likely have a significant effect on the outcome of the litigation because in dispute is whether the defendant airline's use of a certain type of automated kiosk violates California's anti-discrimination statutes or whether such state law claims are expressly preempted by the ADA or impliedly preempted by the ACAA regulations. kiosk violates California's anti-discrimination statutes or whether such state law claims are expressly preempted by the ADA or impliedly preempted by the ACAA regulations. Nature of the Dispute The National Federation of the Blind and three blind individuals commenced a class action on behalf of an asserted "Kiosk Class," alleging that United Airlines ("United") violated California's Unruh Civil Rights Act and Disabled Persons Act because it uses automated ticketing kiosks in California airports. The kiosks are inaccessible to blind customers because they use visual computer screen prompts and touch-screen navigation without translating the prompts into a medium accessible to the blind, such as audio output. According to the plaintiffs, the kiosks allow passengers to access information about flights, check-in for flights, print tickets and boarding passes, select seats, upgrade to business or first class, check baggage and perform other transactions relevant to air travel. The plaintiffs allege that technology exists for the kiosks to be accessible to the blind but that United has refused to employ such technology, which includes an audio interface, tactile keyboard, or interactive screen reader technology for use with touch screens. In December 2010, United filed a motion to dismiss on the grounds that (1) the Air Carrier Access Act (ACAA) and DOT's implementing regulations impliedly preempt, through field preemption 4 or conflict preemption, 5 claims relating to access by people with disabilities to ticketing, boarding and baggage-handling services; (2) the Airline Deregulation Act expressly preempts any state law claims that relate to a service of an air carrier, including the airline's check-in kiosk services; and (3) the complaint does not allege a violation of either California's Unruh Civil Rights Act or Disabled Persons Act. 5

6 Field Preemption Under the ACAA United asserts that the ACAA occupies the field of nondiscrimination against disabled passengers in all relevant aspects of commercial air travel, and that regulations adopted by DOT expressly address automated kiosks and require carriers to provide equivalent service to customers unable to use them. United cites to 14 CFR , which provides: As a carrier, if your automated kiosks in airport terminals cannot readily be used by a passenger with a disability for such functions as ticketing and obtaining boarding passes that the kiosks make available to other passengers, you must provide equivalent service to the passenger (e.g., by assistance from your personnel in using the kiosk or allowing the passenger to come to the front of the line at the check-in counter). United contends that DOT considered whether the final rule should require automated kiosks to be accessible to passengers with disabilities, but chose not to require kiosk accessibility because of cost and technical issues. 6 As such, United argues that the regulations occupy the subject area of the complaint and, therefore, that an airline satisfies its obligations under the law by complying with these regulations. The plaintiffs assert that there is no field preemption because DOT's final rule is described in the Federal Register as an "interim measure" and because DOT plans to issue a notice of proposed rulemaking in July 2011 to "seek information from the public on... whether automated kiosks operated by carriers in airports and elsewhere should be required to be accessible" under the ACAA. 7 According to the plaintiffs: "Because the regulations are unfinished in this regard means that the federal scheme is anything but exclusive for purposes of field preemption." 8 Conflict Preemption Under the ACAA United contends that DOT considered whether the final rule should require automated kiosks operated by air carriers in airports to be accessible to passengers with disabilities and chose not to require kiosk accessibility because of questions about cost and technical issues. As to conflict preemption, United contends that the state law claims "stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress in enacting the federal law." 9 United again points out that DOT chose not to enact a regulation requiring the accessibility of automated kiosks because of cost and technical issues, and that applying California law would override DOT's judgment. The plaintiffs stress that DOT did not reject such a requirement, but rather announced that it would solicit further comment on cost and technical issues. The plaintiffs cite the interim measures as an indication "that the regulations are not pervasive for purposes of conflict preemption." 10 Preemption Under the Airline Deregulation Act United separately asserts that the Airline Deregulation Act expressly preempts regulation of airline services, arguing that the U.S. Supreme Court has made clear that the phrase "services of an air carrier" covers a broad field that includes more than "the frequency and scheduling of transportation" or "the selection of markets to or from which transportation is provided." 11 United argues that an automated kiosk is a "service of an air carrier" because it "is unambiguously part of a provision of labor from United to its passengers and is a boarding procedure." 12 6

7 The plaintiffs contend that the Ninth Circuit's more limited definition of "service" controls and has not been overruled by the Supreme Court. The Ninth Circuit has specified that "'service" does not refer to "assistance to passengers in need" and reasoned that interpreting "service" any more broadly than the provision of air transportation from one place to another would "ignore the context of its use; and, it effectively would result in the preemption of virtually everything an airline does." 13 Alternatively, the plaintiffs argue that even if kiosks are a service, the limited effect that the California state statutes have on United's provision of kiosks does not rise to the level Congress intended to preempt. The plaintiffs note that the cost of the kiosks is too small compared to the revenue United enjoys from operating in California to invoke preemption. 14 The District Court's Request for U.S. and DOT Input On February 7, 2011, the district court issued a Request for Input seeking the views of the U.S. and DOT on the following issues: (1) whether 14 C.F.R preempts application of California state law as to requiring blind-accessible kiosks at airports; and (2) whether the Airline Deregulation Act preempts state anti-discrimination laws related to airline service as to blind patrons regarding kiosks. The Court stated that it "is interested in whether DOT comprehensively regulates the extent to which alternative facilities are made available to blind individuals at airports in the United States from the ticketing section through the departure/arrival gates." The Court requested that the U.S. and DOT respond within 45 days of the date of the request. By letter to the Court dated February 17, 2011, the United States Attorney for the Northern District of California stated that on or before March 24, 2011, it would advise the Court of the views of the U.S. and DOT, if any, on the preemption issues or, if necessary, how long it will take to respond to the request. The input from the U.S. and DOT will be significant because, at least as requested by the Court, it should address the preemption issues that are at the root of United's arguments. The statement also may provide insight on the Notice of Proposed Rulemaking (NPRM) presently expected to be published in July 2011 that will address whether automated kiosks operated by carriers in airports and elsewhere must be accessible to blind passengers. Centerline will provides updates on this litigation and the NPRM as they become available. For more information, contact: Marc L. Antonecchia marc.antonecchia@hklaw.com Notes 1 Recent decisions addressing preemption in the context of the ACAA regulations have reached somewhat inconsistent conclusions. Compare Elassaad v. Independence Air, Inc., 613 F.3d 119, (3d Cir. 2010) (ACAA regulations do not control the standard of care from the standpoint of airline safety); Hodges v. Delta Air Lines, Inc., No. C BAT, 2010 WL , at *4 (W.D. Wash. Dec. 29, 2011) (negligence claim relating to movement of a disabled passenger from an airplane seat to a wheelchair not regulated by ACAA) with Gilstrap v. United Air Lines, Inc., No. 2:10-cv JHN-JCx (C.D. Cal. Jan. 21, 2011) (ACAA regulations impliedly preempt state law claims arising from wheelchair assistance while traveling through the terminal); Johnson v. Northwest Airlines, Inc., No. C VRW, 2010 WL , at *5-6 (N.D. Cal. May 5, 2010) (ACAA regulations specify a carrier's obligations to provide disabled passengers with assistance and therefore preempt the state law standard of care); Russell v. Skywest Airlines, Inc., No. 7

8 C , 2010 WL , at *4-5 (N.D. Cal. Aug. 11, 2010) (ACAA regulations provide the applicable federal standard of care and preempt state law claims of passengers with visual impairments). 2 See, e.g., Seymour v. Continental Airlines, Inc., No ML, 2010 WL (D.R.I. Oct. 4, 2010) (plaintiff's claims under California's Unruh Civil Rights Act and Disabled Persons Act held preempted by the ADA because boarding policies and procedures constitute "services" under the ADA). 3 National Federation of the Blind et al v. United Airlines Inc., Docket No. C (WHA) (N.D. Cal.). 4 "Field preemption" occurs "where the scheme of federal regulation is so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it." Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 98 (1992). 5 "Conflict preemption" applies where a state law creates an obstacle to achieving Congress's purpose in enacting a federal law. Id. 6 See Nondiscrimination on the Basis of Disability in Air Travel, 73 Fed. Reg (May 13, 2008). 7 See Report on DOT Significant Rulemakings, November 2010, #71, available at Plaintiffs' Mem. of Points and Authorities in Support of Opposition ("Plaintiffs' Mem."), at p United's Mem. of Points and Authorities in Support of Motion to Dismiss ("United's Mem."), at p. 6-7 (quoting Montalvo v. Spirit Airlines, Inc., 508 F.3d 464, 470 (9 th Cir. 2007)). 10 Plaintiffs' Mem., at p United relies on Rowe v. New Hampshire Motor Transport Ass'n, 552 U.S. 364 (2008), in which the Supreme Court construed a federal preemption provision governing the regulation of motor carriers. 12 United's Mem., at p Plaintiffs' Mem., at p. 5 (quoting Charas v. Trans World Airlines, Inc., 160 F.3d 1259, 1266 (9 th Cir. 1998) (en banc)). 14 Aside and apart from the preemption issue, United contends that California's Unruh Civil Rights Act and Disabled Persons Act do not apply because neither statute requires identical treatment of passengers with disabilities. United further contends that neither of these statutes require modification of or alteration of United's kiosks. The plaintiffs, however, argue that they are not afforded the full and equal access to which they are entitled under the statutes because they cannot quickly and independently move through the check-in process as do other travelers, but must either wait for a United employee to perform the transactions or alternatively provide sensitive information to sighted strangers in order to conduct the transactions. 8

9 About the Editors Christopher G. Kelly is the Practice Group Leader for the 30-member New York Litigation Practice Group. Mr. Kelly s practice focuses primarily on the defense of mass torts, product liability, toxic torts, federal and state court class actions (consumer, labor and privacy), and contract disputes. Mr. Kelly has represented numerous airlines and equipment lessors in cases of first impression in federal and state courts. Judith R. Nemsick is a Partner in the firm's New York Litigation Practice Group. Her areas of practice primarily involve aviation, mass torts, product liability and privacy rights. Ms. Nemsick has extensive experience with complex aviation disaster litigation and litigating claims governed by the Warsaw and Montreal Conventions. Marc L. Antonecchia is a Partner in the firm s New York Litigation Practice Group with an emphasis in commercial litigation, product liability and insurance matters. Mr. Antonecchia s experience in aviation matters includes purchase and lease contract disputes and aviation disaster litigation. About the Authors Lyndall M. Lambert is a Partner in the firm s Litigation Practice Group in Miami. She devotes her practice primarily to aviation litigation, product liability and mass disaster matters. Ms. Lambert has 26 years of litigation experience in the defense of aviation and product liability cases. She has represented major commercial airlines in multidistrict litigation arising out of domestic and foreign airline crashes. In product liability cases, she has represented manufacturers and sellers of many diverse products. Laura Maria Gonzalez is an Associate in the firm's Litigation Practice Group in Miami. She practices in the area of commercial litigation. 9

10 Upcoming Events William Piels will participate in a panel on Cape Town issues titled The International Registry in the Second Five-Year Term: All New... Implications For You at the 18th Annual Aircraft Transactions Forum, February 28 March 1, 2011, in Scottsdale, Arizona. Additional information is available at: Phillip Durham will participate in a panel on Cape Town issues and the Mexicana Airlines bankruptcy titled Cape Town Enforcement: Mexicana Airlines Bankruptcy at the 18th Annual Aircraft Transactions Forum, February 28 March 1, 2011, in Scottsdale, Arizona. Additional information is available at: Alan Reitzfeld will be presenting a mock mediation at the McGill Conference on International Aviation Liability & Insurance, May 6-7, 2011, in Montreal, Canada. More information is available at: Recent Events Anita Mosner was a panelist on Regulatory Update: A Review of 2010 and What s Ahead in 2011, a discussion that was featured at the IATA Legal Symposium in Vancouver, British Columbia, Canada, February 13-15, More information is available at: Andrew Holmes was a panelist on Legal Opinons in Transitional Times at the 2011 Aircraft Registration Conference in Naples, Florida, February 3-4, More information is available at: Conference-Brochure.pdf David Whitestone moderated a panel on The Washington Landscape: New Congress, New Agenda at the American Association of Airport Executives (AAAE) Aviation Issues Conference in Kona, Hawaii, January 9-13, More information is available at: 10

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