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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