Second Circuit Finds Montreal Convention’s Preemptive Effect Extends To Claims Arising Under State Law – Aviation

The Second Circuit affirmed the Southern District of New
York’s dismissal of importer New Fortune Inc.’s
(“NFI”) claims against freight forwarders Apex Logistics
International (“Apex”) and Aeroflot Airlines, on the
ground that NFI’s state law claims were preempted by the
Montreal Convention.

NFI, a New York corporation that imports goods exclusively from
China, brought state common law claims for breach of contract,
breach of bailment and negligence against Apex (the freight
forwarder) and Aeroflot arising out of the delay in delivery of,
and damage to, a shipment of one million face masks transported
from China to New York.

Apex and Aeroflot argued that the Montreal Convention –
which governs the international transportation of persons, baggage,
and goods by air where the flight occurs between two signatory
nations – preempted NFI’s state law claims. In granting
the defendants’ motion to dismiss, the district court held that
the Montreal Convention, like its predecessor, preempted state law
where applicable. On appeal, the Second Circuit affirmed, finding
that the Montreal Convention clearly precludes parties from
bringing an action under local law when they cannot establish air
carrier liability under the treaty.

In its opinion, the Second Circuit rejected NFI’s argument
that its claims did not fall within the purview of the Montreal
Convention because they were for non-performance, not delay.
Specifically, the court determined that notwithstanding NFI’s
attempts to circumvent the Convention, its claims were for damage
and delay under Articles 18 and 19. Because NFI did not plead
claims under Articles 18 and 19, the district court properly
dismissed the claims.

While the holdings of the district court and the Second Circuit
that the Montreal Convention preempted NFI’s state law claims
are entirely consistent with existing law on these issues, it is
interesting that the district court denied NFI leave to amend the
complaint to assert a cause of action under the Convention. A
review of the filings in the district court reveals that the court
reached this unusually strict result because: (1) in both its
original and amended complaints, NFI invoked the Montreal
Convention as a basis for subject matter jurisdiction, but
nevertheless failed to plead a claim under the Montreal Convention
in either pleading; and (2) NFI did not request leave to amend in
its opposition to Aeroflot’s motion.

In sum, the Second Circuit’s decision reaffirms the
preemptive effect of the Montreal Convention and demonstrates that
litigants cannot use imaginative pleadings to avoid its
applicability.

New Fortune Inc. v. Apex Logistics Int’l (CN)
Ltd., 2021 U.S. App. LEXIS 34924 (2d Cir.
Nov. 24, 2021).

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