Convention "far beyond anything that was in the contemplation of the parties."

The Court recognized that the issue of liability was one of first impression as far as the Federal Circuit and the Supreme Court were concerned, and suggested that an immediate appeal could materially advance the termination of the case.

The U.S. Court of Appeals for the Fifth Circuit held, on June 20, 1975, in the case of Butler's Shoe Corp. v. Pan American World Air, Inc., 514 F.2d 1283 (1975), that a provision in the carrier's tariff requiring that a written claim for loss of goods be filed within 120 days from the date of issue of the air waybill was not a "provision which tends to relieve the carrier of liability," and therefore was not void as conflicting with the Warsaw Convention (49 Stat. 3000; TS 876; entered into force for the United States October 29, 1934, subject to a reservation).

The plaintiff had appealed from a grant of summary judgment in favor of Pan American, on a $14,391 claim for lost goods. It had failed to file its claim in the 120-day period and contended that the 120-day requirement contravened Article 23 of the Warsaw Convention which provides:

Any provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this Convention shall be null and void. . .

The District Court rejected that contention, but alternatively held that the argument amounted to an attack upon the validity of Pan American's tariff which must be made before the Civil Aeronautics Board (CAB).

The Court of Appeals affirmed the judgment of the District Court, while rejecting the conclusion that plaintiff's argument was an attack upon the reasonableness of the tariff. It noted that the issue presented was interpretation of the provisions of a treaty and therefore a matter properly before the courts without initial resort to the CAB.

Jurisdiction

In Vergara v. Aeroflot "Soviet Airlines,” 390 F. Supp. 1266 (1975), the U.S. District Court for the District of Nebraska, on March 5, 1975, denied a motion by the defendant airline to dismiss an action for damages brought by Nebraska airline passengers whose trip around the world had been partly rerouted at Tashkent because of a "revolution" in progress at Kabul, the next scheduled stop. The defendant argued that the change of plans terminated the original contract and created two new contracts. As the case involved an

international flight governed by the Warsaw Convention (TS 876; 49 Stat. 3000; entered into force for the United States October 29, 1934, subject to a reservation), the Court examined the jurisdictional issues relating to Article 28 of the Convention.

The Court held that, with respect to a trip consisting of several parts, the ultimate destination is accorded treaty jurisdiction under Article 28 of the Warsaw Convention and that rescheduling of the world trip constituted a mere modification of the original contract which at all times included Omaha as the ultimate destination.

The rearranging of schedules due to missed or unavailable flights is a common occurrence and, in most such situations, the ultimate destination remains unchanged. Missed or unavailable flights are rarely caused by the willful conduct of the airline or passenger, and passengers expect assistance from the airline in rearranging their itineraries. In the typical instance where one must take a different airline, the fare is disbursed between the airlines, and the passenger is not required to pay an additional amount. All of these factors persuade the Court that an airline ticket constitutes a highly modifiable contract. The parties expect such modifications and have evolved their attitudes and business procedures to readily accommodate modifications. . .

The Court ruled further that the defendant Russian airline was transacting business in Nebraska within the Nebraska long-arm statute when plaintiffs purchased their airline tickets there through a travel agency which was the authorized agent for Pan American World Airways, which in turn was authorized by the Russian airline to collect the fee. The Court concluded that the cause of action thus arose from the Nebraska transaction, not from the subsequent modifications made in Tashkent.

Choice of Law

As a result of the Paris air crash of a Turkish Airlines DC-10, the United States, along with McDonnell Douglas Corporation, General Dynamics Corporation, Brackett, Inc., Fireman's Fund Insurance Company, and Turkish Airlines, Inc., was sued by next of kin of some of the 346 persons who died in the accident, in re Paris Air Crash of March 3, 1974, 399 F. Supp. 732 (1975). Plaintiffs alleged that the crash occurred as a result of a faulty rear cargo door and charged that the U.S. Federal Aviation Administration was negligent in its airworthiness certification of the aircraft. The defendants agreed to a formula among themselves that precluded litigation of the matter of liability and left for settlement or trial

only the issue of damages, on condition individual plaintiffs waived exemplary or punitive damages.

On August 1, 1975, the U.S. District Court for the Central District of California held that the governmental interests of the United States and the State of California, where the plane had been designed, manufactured, and tested, were significantly greater than the interests of the countries or states of which either the decedents or claimants were citizens, and were such as to require application of the law of California to the issue of damages. In view of the Federal interest, the opinion called for adoption of the phrase "pecuniary loss" as used in admiralty as part of the applicable law on measure of damages.

The United States had filed a motion to dismiss the complaints on the ground that the accident occurred in France and that, under 28 U.S.C. 2680(k), it could not be sued under the Federal Tort Claims Act, which excludes any claim arising in a foreign country. The District Court rejected the argument, noting that all of the acts or failures to act of the United States upon which plaintiffs relied were alleged to have occurred in the United States, in the State of California, by the wrongful inspection and approval of the plane, even though those acts or failures came to fruition in a foreign country. The Court said:

inasmuch as the United States has preempted the field of regulating aviation . . . to the extent that no plane manufactured anywhere in toe United States can fly without a United States certificate of airworthiness, . . . the United States Government has as much, or greater, interest in the products which it certifies as airworthy as any state or any nation in order to insure the integrity of its products in this very competitive world market and also to insure that anyone coming within the ambit of strict products liability shall know that its liability for a defect shall be uniform, no matter where or how the defect is discovered, through accident or otherwise.

The Court stated further that application of the more liberal law of some jurisdictions in respect of some defendants would result in denial of equal protection to other defendants.

Other questions raised in the case were the constitutionality and application of the Warsaw Convention of 1929, the Hague Protocol, and the Montreal Agreement, as well as the value of the gold French franc of 1929 as against the official current value of the gold French franc if the Warsaw Convention applied. The Court saw no need to consider those questions, since they were not applicable on the face of the texts to the United States, the

manufacturer, designer, or seller of the plane which was the subject of the suits.

§ 5

Domestic Law and Regulation

Foreign Charter Operations

President Ford, on April 22, 1975, approved a Civil Aeronautics Board decision to issue a foreign air carrier permit to Société Anonyme de Transport Aerien (SATA). The permit authorized the Swiss charter carrier, for two years, to engage in foreign air transportation with respect to charters to passengers between Switzerland and the United States, a limited number of planeload charters of cargo, and certain inclusive tour charters of passengers which originate in Switzerland or elsewhere in Europe. The international charter authority of foreign carriers to operate in the United States is not subject to bilateral agreement between the United States and the other country involved. However, the United States and Switzerland, by an exchange of letters of June 12 and July 25, 1974 (TIAS 7916; 25 UST 239b; entered into force July 25, 1974), agreed to accept, through December 31, 1975, as charterworthy, charter flights carrying traffic originating in the other country which conform to the charterworthiness rules of that other country.

For the text of the CAB announcement, see CAB Press Release 75-78, Apr. 22, 1975.

Customs Regulations

The U.S. Court of Appeals for the First Circuit, on February 21, 1975, held in the case United States v. Nunes, 511 F.2d 871 (1975), that customs officials had no right to demand a declaration of cargo, much less to search and seize cargo, from a plane making an emergency refueling stop, landing no cargo or passengers, and pursuing its announced intention to depart abroad.

The defendant-appellant, a Jamaican, had been indicted and charged with "knowingly and intentionally importing" into Puerto Rico from Jamaica 375 pounds of marijuana. Following denial by the U.S. District Court for the District of Puerto Rico of his motion to suppress evidence produced by a customs search of his airplane after an emergency landing at San Juan enroute to the British Virgin Islands from Jamaica, he was found guilty and appealed.

The Court of Appeals examined the statute which exempts from

customs inspection vessels entering a port in distress or for the purpose of taking on stores or fuel without landing or taking aboard passengers or cargo (Tariff Act of 1930, § 441(4); 19 U.S.C. 1441(4)). The Court considered that provision to be an exception to the general provision of the same statute authorizing boarding of vessels by customs officers (§ 581(a); 19 U.S.C. 1581(a)). It found also that, although the statute was phrased in terms of "vessel" or "vehicle" and did not apply to aircraft, regulations issued by the Secretary of the Treasury for aircraft parallel the statute and must be construed broadly in conformity with it. The Court referred to Code of Federal Regulations, Title 19, Chapter 1, Part 6Air Commerce Regulations, and said that, although the regulations did not track the statutory provision, they must be construed in pari materia. In the first place, the Court said, the Secretary does not have power to issue regulations inconsistent with the general precepts and tenor of the enacted legislation; but, more importantly, the exemption of vessels in distress from customs inspection is not an act of governmental munificence but "recognizes fundamental principles of international law," citing United States v. Sullivan, 26 F.2d 606 (1928), and The Brig Concord, 9 Cranch 387 (1815).

Preferences for United States Air Carriers

In a note dated December 9, 1974, to the Department of State the British Embassy at Washington expressed its objection to the U.S. Government's "fly U.S. flag" program as constituting a violation of the "fair and equal opportunity" provision of the Air Services Agreement between the United States and the United Kingdom (TIAS 1507; 60 Stat. 1499; entered into force February 11, 1946). The Embassy noted in particular a letter dated October 23, 1974, from Secretary of Transportation Claude S. Brinegar to the chief executives of all the domestic U.S. scheduled airlines appealing for a "shift in the level of interline traffic that you feed to our international carriers" as well as other appeals and campaigns directed at travel agents and shippers of air cargo. Citing the understanding in the Final Act of the Air Services Agreement that "there shall be fair and equal opportunity for the carriers of the two nations to operate on any route between their respective territories," the Embassy charged that the Secretary of Transportation's appeals to "fly U.S. flag" were an incitement to discrimination and incompatible with that undertaking. The note requested deletion of the "fly U.S. flag" program from the "Seven-Point