Appeal from the United States District Court for the District of Columbia (91cv3005)
Before: Wald, Silberman, and Williams, Circuit Judges.
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Opinion for the Court filed by Circuit Judge Silberman.
Dissenting opinion filed by Circuit Judge Wald.
Air France appeals the district court's determination that it engaged in "willful misconduct" and was accordingly not entitled to limit its liability, under Article 22 of the Warsaw Convention, for damage to carpets owned by Mohammad Ali Saba and transported by Air France. We disagree with the district court's formulation of the standard for willful misconduct, and believe that the evidence presented does not, as a matter of law under the appropriate standard, amount to willful misconduct. We reverse.
Appellee Saba arranged in 1990 to have Air France ship 575 carpets from Salzburg, Austria to Dulles Airport in Virginia. Air France accepted the carpets in 191 bales-each containing a bundle of two to five rolled carpets separated with plastic and wrapped in burlap-from Saba's freight forwarder on September 19, 1990. The carpets were shipped by truck from Salzburg to Linz, Austria. At Air France's station in Linz, Air France employees loaded the bales in roughly even amounts onto metal pallets and into cargo containers. The carpets were then flown to Kennedy International Airport in New York City, and subsequently transported by truck to the cargo facility of Dynair, Air France's cargo agent, at Dulles Airport.
Dynair stored the carpets outside, in accordance with its usual practice when its warehouse was full, and they remained outside for five days. Dynair employees placed additional, heavy-gauge plastic over the cargo on the pallets and added similar plastic to the top of the cargo inside at least one of the containers. The day before Saba's son arrived to retrieve the carpets, .34 inches of rain fell at Dulles. It was discovered that despite the packaging supplied by Air France and despite the extra plastic, the carpets were damp, particularly at the bottoms of the pallets and containers. Further inspection revealed that 86 of the carpets (in 73 bales) had sustained water damage.
Saba sued Air France for the loss. Air France's liability for the damaged cargo is limited by the Warsaw Convention, which provides that "[i]n the transportation of checked baggage and of goods, the liability of the carrier shall be limited to a sum of 250 francs per kilogram." Convention for the Unification of Certain Rules Relating to International Transportation by Air, Oct. 12, 1929, Art. 22(2), reprinted in 49 U.S.C. app. Section(s) 1502, Historical Note (1988). Saba contended, however, that Air France and its agent, Dynair, had engaged in willful misconduct, so the Convention's liability limitation did not apply. Warsaw Convention, Art. 25(1) ("The carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his liability, if the damage is caused by his willful misconduct or by such default on his part as, in accordance with the law of the court to which the case is submitted, is considered to be equivalent to willful misconduct."). Saba alleged that Air France's packing the carpets in violation of its cargo-handling regulations and Dynair's leaving the carpets outside constituted willful misconduct. After a bench trial, the district court agreed and awarded Saba damages well in excess of Air France's liability had the Convention been held to apply. The district court opinion, finding willful misconduct, documented a variety of flaws in the packing of the carpets: Air France stacked 40% of the carpets on metal pallets, rather than in enclosed containers as suggested by its own regulations; failed to provide double plastic covers (i.e., cover over and under the cargo) on the palleted carpets as required by its regulations; failed to provide reinforcement to prevent the pallets from deforming under the weight of the carpets as required by its regulations; used containers fitted with net doors, which were doubly inadequate-they were not rigid as required by Air France regulations, and they did not close properly; and used one container that had a three-inch gash in the top. The district court also pointed to the fact that Air France's agent, Dynair, left the badly packaged carpets outside despite publicly forecasted rain and did not bring the carpets inside once it started to rain.
In describing the standard for willful misconduct in this circuit, the district court referred to In re Korean Air Lines Disaster of Sept. 1, 1983, 932 F.2d 1475, 1479 (D.C. Cir.), cert. denied sub nom. Dooley v. Korean Air Lines, Ltd., 502 U.S. 994 (1991), in which we upheld the district court's jury instruction that "[w]illful misconduct is the intentional performance of an act with knowledge that the act will probably result in an injury or damage, or in some manner as to imply reckless disregard of the consequences of its performance." Saba v. Compagnie Nationale Air France, 866 F. Supp. 588, 593 (D.D.C. 1994). The judge interpreted that formulation to mean that "a combination of factors can, taken together, amount to willful misconduct, and that merely the act itself needs to be intended, not the resulting injury or the wrongfulness of the act." Id. (citation omitted). He thought, moreover, that "a finding of willful misconduct is appropriate when the act or omission constitutes a violation of a rule or regulation of the defendant carrier itself." Id. After reviewing the evidence of Air France's "lack of judgment," id. at 594, and "disregard of its own cargo-handling regulations as well as of plain ...