Korean Air Flight 801: Warsaw and the FTCA

Written by Anne M. Huarte
for trial attorneys and partners, William H. Wimsatt and Peter T. Cathcart
of:

MAGAÑA, CATHCART & McCARTHY

1801 Avenue of the Stars, Suite 810
Los Angeles, California 90067-5899
(310) 553-6630 mcmc-law.com
Presented by William H. Wimsatt

Introduction

In this air tragedy case, Article 28 of the Warsaw Convention prevented many of the plaintiffs from being able to sue Korean Air Lines Co., Ltd. ("KAL") in the United States. As this audience undoubtedly knows, Article 28(1) provides that "An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting parties, either before the court of the domicile of the carrier or of his principal place of business, or where he has a place of business through which the contract has been made, or before the court at the place of destination." The domicile and principal place of business of KAL is Korea. And the majority of the injured or decedent passengers in this case were Korean nationals who had purchased their tickets in Korea, with a final destination of Korea on round trip tickets. Therefore, those plaintiffs could not bring suit against KAL in the U.S., but only in Korea.

In spite of the fact that the business activities of KAL did not qualify it to be sued in the U.S. by most of the foreign plaintiffs in this case, those plaintiffs were able to bring the question of KAL’s liability into the U.S. federal district court by a less direct means. First, the plaintiffs filed suit in federal district court against the U.S. for the FAA air traffic controllers’ negligence, and against Serco Management Services, Inc. ("Serco"), for negligently operating the control tower on behalf of the FAA.

In turn, those defendants filed cross-complaints for indemnification against KAL. When the district court allowed the original defendants to seek indemnity from KAL in the U.S. court, the question of KAL’s liability suddenly became a question to be addressed by the U.S. courts. This ruling, along with other crucial rulings, helped induce the three defendants, the U.S., KAL, and Serco, to enter into agreements that both admitted and apportioned liability.

Once liability was admitted and apportionment agreed among defendants, the court appointed a mediator, Justice Robert Feinerman. The parties then settled the majority of the cases in California, under U.S. damage standards, despite the fact that most of the injured and decedent passengers were foreign nationals from Korea with no jurisdiction under the Warsaw Convention to sue KAL in the U.S.

The Accident

On August 6, 1997, at approximately 1:42 a.m., a Boeing 747-300 aircraft crashed into a hillside on approach to the Guam International Airport. The flight was operated by Korean Air Lines as KAL Flight 801 from Seoul, Korea, to Agaña Guam. The crew consisted of two pilots, one flight engineer, one purser, 13 flight attendants and 231 passengers. Of the 254 people aboard, 228 died as a result of the crash.

On the night of the crash, the glide slope for the instrument landing system to the target runway, runway 6L, was out of service, and thunderstorms were in the area.

Causation and Defendants’ Liability

1. Korean Air Lines

KAL’s flight crew did not follow the published and prescribed flight procedure for the approach into the airport. As stated, the glide slope was not working, and consequently the pilots used a Localizer/DME approach. The flight crew did not follow the step-down procedure on the Localizer approach, but rather descended in a straight line, and crashed into Nogomo Hill, about three miles short of the runway.

Darkness and rain showers severely inhibited visibility of the runway environment for the KAL flight crew. These conditions increased the flight crew’s reliance on the air traffic control system to help land the airplane safely.

2. FAA Air Traffic Control Facility, Guam (a U.S. Territory)

The agents of the air traffic control system failed to fulfill many of their duties. Every failure is not included here. Of particular significance, the CERAP (combined center and radar approach control) controller failed to monitor the progress of the flight on the radar scope that would have allowed him to see that six miles from the runway, the airplane had descended below a safe altitude. Because of that inattention, he failed to see its dangerous descent and failed to call the flight crew and issue the required "low altitude alert" to KAL 801. That controller also failed to request a read back that the glide scope was unusable.

Another significant failure of the FAA’s agents was that the Minimum Safe Altitude Warning System (M-SAW) was not operating. The FAA personnel responsible for maintaining safety critical equipment had failed to correctly install the M-SAW. What’s more, there was evidence that FAA personnel had deliberately turned off M-SAW.

M-SAW is critical safety equipment that would have provided aural and visual alarms to the controller when KAL 801 descended below the minimum safe altitude. Because of the lack of M-SAW alarms, the air traffic controller was not alerted, and did not communicate a low altitude alert warning to KAL 801. Such a warning would certainly have caused the flight crew to abandon their Localizer/DME approach to the airport and execute a missed approach.

3. The Air Traffic Control Tower, Operated by Serco Corporation

The air traffic control tower was operated by Serco Corporation for the FAA. The local traffic controller in the tower at the Agaña airport failed to communicate vital information to the flight crew. He did not timely update the ATIS (Airport Terminal Information Service) to reflect that the weather had changed and that KAL 801 might encounter a thunderstorm on its approach. Nor did he radio the crew that thunderstorms were in the area, although that information was available to him for nine minutes before he first spoke to KAL 801’s crew. Controllers are required to issue "special weather observations" to pilots as soon as possible. This incorrect information about the weather gave the pilot of KAL 801 a false expectation that he would have good visibility on approach.

Most strikingly, although the controller could not see the Boeing 747, he cleared KAL 801 to land. Using binoculars, the tower controller would normally expect to see a large jet at night with all its lights on, about six miles from touchdown. When he did not see the aircraft at that point, he was required to inform the crew that it was: "not in sight." The controller failed to do this, which in turn failed to alert the pilot to check his altitude.

Jurisdiction in the Federal District Courts in the Actions Against the U.S. and Serco

All the plaintiffs, whether they had Article 28 jurisdiction or not, were able to file suit in the federal district courts against the U.S. for the alleged negligence of the FAA air traffic controllers and the alleged negligence of Serco. The Federal Tort Claims Act ("FTCA") waives sovereign immunity and grants exclusive jurisdiction to the federal district courts over covered tort actions. The FTCA imposes liability on the U.S. for the wrongful act or omission "of any employee of the government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred. . . ." Specifically, the U.S. can be held liable for the failure of air traffic controllers to provide their services with due care.

Plaintiffs filed their cases in various locations in the U.S. district courts, including Guam (a U.S. Territory), California, New York and New Jersey.

The Multidistrict Litigation panel ordered more than 80 different lawsuits consolidated. All of the cases were eventually sent by the Multidistrict Litigation Panel to the U.S. District Court, Central District of California, for coordinated pretrial proceedings.

The U.S. Code provides that civil actions pending in different districts and involving one or more common questions of fact, may be transferred to any district for coordinated or consolidated pretrial proceedings. Such transfers are made by the Judicial Panel on Multidistrict Litigations. The purpose is to effect judicial economy and to eliminate the potential for conflicting contemporaneous pretrial rulings by different district courts.

It is important to note that the Central District of California had no power to retain the cases for trial. All of the cases not originally filed in the federal district court in California were subject to the Multidistrict Litigation statute: 28 U.S.C §1407(a). That statute provides that cases sent to a particular courtroom for pretrial proceedings must be remanded to their original location at or before the conclusion of the pretrial proceedings. It is up to the transferor court to make any further transfers of venue for trial.

But in these consolidated cases, many parties signed settlement agreements before the conclusion of the pretrial proceedings. This result flowed directly from the court’s rulings on key issues.

The Court Ordered that the IATA Agreements Applied, Thus KAL Was Presumptively Liable for Full Compensatory Damages Without Limit Unless it Could Prove Freedom

From Negligence

The plaintiffs brought a motion for partial summary judgment, asking the district court to determine certain issues. Plaintiffs argued that KAL had signed the International Air Transport Association (IATA) Agreements of 1996, and that they applied to the subject crash. (The IATA Agreements consist of the Intercarrier Agreement on Passenger Liability (IIA) and the Agreement on Measures to Implement the IATA Intercarrier Agreement (MIA).)

The passenger liability limits for signatories to the Warsaw Convention have increased over the years. In 1929, the Warsaw Convention set forth uniform rules for passenger liability:

(1) it limited liability of the international carrier to about $8,300 (Article 22);

(2) this was subject to the defense that the carrier was not negligent (Article 20(1));

(3) the limitations may be waived in favor of a higher limit by "special contract" between airline and passenger (Article 22(1)); and

(4) all limits are inapplicable in the event of airline "willful misconduct" (Article 25(1)).

These provisions have undergone changes over the years, some by intergovernmental agreements and some by airlines contracting with each other to waive rights under the Warsaw Convention, with governmental approval. Changes include the Hague Protocol (1955), the Montreal Agreement (1966), and the IATA Agreements of 1996.

KAL was a signatory to the Montreal Agreement. That Agreement raised the limit of liability to $75,000 and waived the non-negligence defense for amounts up to $75,000. Plaintiffs could recover full compensation above $75,000 only if they could prove "willful misconduct."

But according to the IATA Agreements of 1996, an international carrier is strictly liable to each passenger for up to 100,000 SDRs. Carriers also are presumptively liable for full compensatory damages above that amount unless they prove freedom from negligence. In other words, the IATA Agreements reinstated the "all necessary measures" (or non-negligence) defense for carriers that had been done away with in the Montreal Agreement.

Most favorable of all, under the IATA Agreements, it is no longer necessary for the plaintiff to prove "wilful misconduct" to escape the damages limitation of the Convention.

Thus, Plaintiffs urgently desired that the IATA Agreements would be considered applicable to KAL.

Although KAL admitted signing the IATA Agreements in October 1995, the question for the district court to determine was when the agreements became effective. The MIA stated that the IATA Agreements would become effective when "[t]he Director General of IATA shall declare the Agreement effective on November 1st 1996, or such later date as all requisite Government approvals have been obtained. . . ." The U.S. Department of Transportation (DOT) approved the Agreements in January 1997, and the European Commission approved them in February 1997. The Director General of IATA declared the Agreements to be in effect on February 14, 1997.

KAL contended that the Agreements were not applicable to it until the Korean government approved the Agreements (which it did after the KAL crash). Indeed, the Agreements do not specifically define the "requisite Government approvals." Contrary to KAL’s argument that the term "requisite Government approvals" meant the approval of the tariff by the Korean government, the district court found that the Korean government’s approval was not required. The court stated that the conduct of the parties to IATA revealed an intention that their waivers of prior limits would take effect after approval by the DOT and the European Commission, and when the Agreements were declared effective. There was no indication that any signatory had taken the position that each country’s tariff authority had to give approval before the IATA Agreements became effective.

Another argument raised by KAL was that the Agreements were not "special contracts" with the passengers as provided by the Warsaw Convention, Article 22(1). KAL stated that the Agreements were between carriers, and did not bestow new legal rights on the passengers until Korean government approvals were obtained and the new terms were incorporated into contracts of carriage and tariffs. The district court rejected KAL’s argument, finding that the practical interpretation of the airlines and the governments of the phrase "special contracst" includes agreements among carriers. The court reiterated that KAL had waived its Warsaw Convention defenses and limits, and that its failure to seek approval of its changed tariffs before the crash was irrelevant to the issue of waiver.

The court granted the plaintiffs’ motion in part and determined that the IATA agreements of 1996 came into effect on February 14, 1997 — the date of promulgation of effectiveness of the agreements following approval by the U.S. and the European Commission.