On 19 April 2013, the US District Court for the Central District of California granted defendant’s motion to dismiss on the ground that the plaintiff lacked standing to sue under the Montreal Convention. The matter, QBE Ins. (Int’l) Ltd. v. EVA Airways Corp., 2013 WL 1876429 (N.D. Cal. 2013), arose from damage to a consignment that allegedly occurred during air carriage from the United States to China. The plaintiff, which  was the subrogated insurer of the consignment’s owner, filed an action against EVA Airways, claiming that it suffered damages for the repair and replacement of the damaged  consignment.

EVA Airways filed a motion to dismiss the complaint on  the ground that the plaintiff insurer lacked standing to maintain the action under the Montreal Convention, because it was not the consignor or consignee listed on the air waybill for the subject consignment.

The Court found that the Montreal Convention applied to the case because the subject air waybill provided for transportation of the consignment between the United States and China. To determine plaintiff’s standing to sue, the Court looked to Article 14 of the Montreal Convention. Article 14 provides that “the consignor and the consignee can respectively enforce all the rights given to them … each in its own name, whether it is acting in its own interest or  in the interest of another, provided that it carried out the obligations imposed by the contract of carriage.” The Court found that Article 14 should be construed narrowly so that only the consignor and consignee listed on the air waybill have standing to sue under the Convention, even when the consignor or consignee has subrogated or assigned its rights to another party. The court observed, “the plain language of Article 14 of the Montreal Convention indicates that the sovereign state signatories to it contemplated that the consignor and consignee would only be granted the right to sue ‘each in its own’ name, rather than through a third party to whom their rights had been subrogated or assigned.”

This case is noteworthy because it appears to be the first to address standing under the Montreal Convention in a cargo-related case. Prior decisions relating to standing were based on the Warsaw Convention – the predecessor to the Montreal Convention.

This ruling is also significant for its strict interpretation of Article 14. Parties that are neither the consignor nor consignee identified on the subject air waybill, but which nonetheless may have an interest in the claim, are foreclosed from suing for damage to cargo. Such parties may include subrogees, assignees, and other parties that would have a right to sue under local law as a real party in interest based on a legal relationship with the consignor or consignee. EVA Airways was represented by our Aviation Group in San Francisco