SOCAR v. Boeing, No. 14-CV-5130 (E.D.N.Y. Nov. 12, 2015) [click for opinion]

In August 1984, while preparing for take off, one of Cameroon Airlines’ jets caught fire, killing three passengers and injuring seventy-two others.  SOCAR was the insurer for Cameroon Airlines at the time and paid out over $150 million on behalf of Cameroon Airlines to the victims’ families and for property damage to the plane.  

In August 2014, SOCAR brought a subrogation action against Boeing and Pratt & Whitney in federal district court to recover its losses.  Standing in the shoes of Cameroon Airlines, it alleged claims for product liability, personal injury, and breach of warranty.

In a diversity case, such as this one, a federal court will generally apply the choice of law rules and statute of limitations of the law of the forum state.  The court thus applied New York law and held that all of SOCAR’s claims were barred by New York’s statute of limitations.

Under the New York borrowing statute, where a plaintiff, not a resident of New York, sues upon a cause of action that arose outside of New York, a court must apply the shorter limitations period of either: (1) New York; or (2) the state where the cause of action “accrued.”  

Under New York law, the statute of limitations for product liability and personal injury actions is three years from the date of the accident.  For a breach of warranty claims, the limitations period is four years from the date of delivery of the product to the first purchaser.  Since SOCAR’s claims accrued in the 1980’s, they would be untimely under the New York statute of limitations. 

SOCAR argued that the court should deny defendants’ motion to dismiss because a Cameroonian “statute of repose” provides for a 30 year limitations period.  The court held that the New York borrowing statute applied regardless of whether the Cameroonian statute was classified as a statute of repose or statute of limitations.  Thus, New York’s shorter statute of limitations controlled and warranted dismissal.

Michael Bloom of the Chicago office contributed to this summary.