Wise Up! Why It’s Time to Dump <em>Reed v. Wiser</em> and Get Real about Third-Party Actions

The Warsaw Convention of 1929 and the Montreal Convention of 1999 (Conventions) are international treaties governing the liability of the air carrier for damage arising during international carriage by air, e.g., passenger death or bodily injury. The foundation for the applicability of these Conventions is the contract of carriage. However, given the nature of the air transport operations and their technological complexity, a given accident can result from several causes attributable to different parties. The plaintiff (e.g., the passenger) may have the option of suing, not only the carrier based on the contract of carriage, but, alternatively, an airframe or component manufacturer, or an aviation service provider (e.g., airport or air traffic service provider), or even an employee or agent of the air carrier. These alternative defendants are third parties to the contract of carriage; as such, the Conventions do not apply to these claims. Where a plaintiff opts to sue a third party to the contract of carriage, that third party will often bring a third-party action for contribution or indemnification against the air carrier. The dilemma raised by such actions is whether the Conventions apply to them. If not, the risk arises that the provisions of those Conventions (e.g., monetary limitations of liability) will not apply, although they would have had the plaintiff to the main action sued the carrier directly. This would mean that the Conventions may be effectively circumvented and their purposes defeated. There is judicial division on the matter, both within the United States and internationally. This Article aims to identify and critically evaluate the doctrinal foundations of the competing arguments for and against the applicability of the Conventions to third-party actions and to establish which is doctrinally correct. It starts by examining how courts (and the international community) have treated the applicability of the Warsaw Convention to actions brought against employees and agents of the air carrier. Attention then turns to the related matter of the applicability of the Conventions to third-party actions for contribution or indemnification taken against air carriers; it identifies two distinct approaches taken by courts: the orthodox approach and the alternative approach. The thesis of this Article is that the favoring by U.S. courts of the alternative approach is the result of a doctrinal misstep traceable to the Second Circuit’s decision in Reed v. Wiser. This Article exposes the weakness of the Second Circuit’s reasoning and reveals the true policy justifications for the decision. This Article proves that these policies, although compelling at the time, no longer hold water and that, instead, the more doctrinally sound doctrine of the orthodox approach should be followed—a conclusion supported by recent decisions of some U.S. courts, as well as decisions from Australia and the United Kingdom. Although this would give rise to some invidious problems, this Article argues that only by freeing ourselves of the baneful influence of Reed v. Wiser and thereby setting ourselves back on a sound doctrinal footing can we hope to get real about third-party actions and find a solution to the problems posed by them.

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