Egan v. Kollsman Instrument Corp.
287 N.Y.S.2d 14, 21 N.Y.2d 160, 234 N.E.2d 199 (1967)
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Rule of Law:
For an air carrier to limit its liability under the Warsaw Convention, it must provide notice of the liability limitation on the passenger's ticket in a manner that is reasonably legible and conspicuous. A notice printed in such small and unreadable type that it fails to afford a passenger a reasonable opportunity to take self-protective measures is insufficient, even if it literally complies with the Convention's text.
Facts:
- Eileen M. Seiter purchased a round-trip airline ticket for travel from New York City to Vancouver, Canada, and back.
- The ticket contained a footnote in very small (4½ point) print stating that the transportation was subject to the liability limitation rules of the Warsaw Convention.
- On her return date, Seiter's flight from Vancouver was canceled due to bad weather, so she traveled from Vancouver to Seattle by bus.
- In Seattle, Seiter used her original ticket to board her scheduled Northwest Airlines flight to Chicago.
- After arriving late in Chicago and missing her connection, Northwest Airlines exchanged her ticket for a new one on an American Airlines flight to New York, with the new ticket referencing the original routing.
- The American Airlines plane carrying Seiter crashed on approach to La Guardia Airport in New York, resulting in her death.
Procedural Posture:
- The administrators of Eileen M. Seiter's estate sued American Airlines and others in the New York Supreme Court, Kings County (a trial-level court), for wrongful death.
- American Airlines raised an affirmative defense seeking to limit its liability under the Warsaw Convention.
- The plaintiffs (Seiter's administrators) filed a motion to dismiss American Airlines' affirmative defense.
- The court at Special Term denied the plaintiffs' motion to dismiss, allowing the defense to stand.
- The plaintiffs appealed this decision to the Appellate Division of the Supreme Court (an intermediate appellate court), which unanimously affirmed the trial court's order.
- The Appellate Division then granted the plaintiffs (as appellants) leave to appeal to the Court of Appeals of New York (the state's highest court) on a certified question.
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Issue:
Does a passenger ticket that contains a statement on the applicability of the Warsaw Convention's liability limitations in exceedingly small and almost unreadable print provide sufficient notice to the passenger, thereby allowing the airline to limit its liability for wrongful death?
Opinions:
Majority - Chief Judge Fuld
No. A passenger ticket with a notice of liability limitation printed in exceedingly small, almost unreadable print does not provide sufficient notice, and therefore the airline may not limit its liability. Although the flight from Chicago to New York was part of the 'international transportation' governed by the Warsaw Convention, the carrier failed to comply with the Convention's notice requirements. Article 3 of the Convention requires a 'statement' that transportation is subject to its liability rules. The court rejected a strictly literal reading of this requirement, reasoning that the purpose of the statement is to provide meaningful notice to passengers, allowing them to take self-protective measures like purchasing additional insurance. A statement that is virtually unreadable fails to achieve this purpose. Citing precedents like Lisi v. Alitalia, the court held that the quid pro quo for the Convention's significant advantage to carriers (limited liability) is the delivery of a ticket with a conspicuous warning. Because the notice was effectively 'camouflaged' in Lilliputian print, it was inadequate, and the carrier cannot invoke the Convention's liability limits.
Analysis:
This decision represents a significant shift from a literal to a purposive interpretation of treaty provisions, particularly in the context of consumer contracts of adhesion. By requiring that notice be not only present but also meaningful and conspicuous, the court placed a greater burden on air carriers to ensure passengers are genuinely informed of limitations on their rights. This ruling bolstered a national policy favoring clear and conspicuous consumer notices and influenced subsequent judicial and regulatory standards, mandating larger font sizes and clearer language for liability limitations in travel contracts. The case set a precedent that a party cannot benefit from a contractual or treaty-based limitation of liability if the notice of that limitation is effectively hidden from the other party.
