Why MH370 compensation lawsuits may go nowhere in U.S.
Gillian Wong, The Associated Press
Published Wednesday, April 16, 2014 9:14AM EDT
BEIJING -- Since Malaysia Airlines Flight 370 went missing, some lawyers have claimed they can get several millions of dollars in damages for each lost passenger by taking the cases to the United States. But past lawsuits show U.S. federal courts are more likely to throw such cases out if the crashes happened overseas.
Major disasters draw lawyers looking to sign up clients for big lawsuits, and the missing Malaysian plane, which was carrying mostly Chinese passengers, has been no exception. Lawyers from various firms have descended on a Beijing hotel where relatives of the passengers have been staying, and have even travelled around China to visit them in their homes.
The Chinese relatives have said their main focus remains on the search for the plane, so lawyers have had little luck so far in signing up clients here, despite dangling the potential of major damage awards.
"This is not the right point in time to discuss legal matters because nothing has been found yet and everybody has no idea what exactly happened to the plane," said Steve Wang, a representative of some of the Chinese relatives.
Relatives can expect to get at least about $175,000 from Malaysia Airlines for each lost passenger under terms of the Montreal Convention, an international treaty governing air travel compensation. The relatives can also sue the carrier in Malaysia or their home countries for further damages.
Chinese made up two-thirds of the 227 passengers aboard Flight 370, which disappeared March 8 en route from Kuala Lumpur, Malaysia, to Beijing. Searchers looking in a stretch of the southern Indian Ocean have yet to find any debris from the plane.
Malaysia Airlines said in an email that it was focused on helping the families of the passengers and 12 crew members, and that "other matters will be dealt with appropriately."
Some lawyers have argued that the families could still sue in America if they alleged the plane's U.S. manufacturer, the Boeing Co., was somehow responsible for the disaster.
But such lawsuits are likely to be rejected if they're filed in the United States because federal courts there have dismissed many similar foreign air crash cases, especially if most of the plaintiffs are not American.
The courts have tossed out lawsuits against U.S. parts makers in connection with the 2009 crash of Air France Flight 447 in the Atlantic Ocean. They also dismissed lawsuits against Boeing in the 2008 Spanair flight that crashed on takeoff in Madrid and the 2005 Helios Airways flight that crashed near Athens, Greece, when a loss of cabin pressure caused the people on board to lose consciousness.
The U.S. courts have ruled that it would be more convenient for the claims to be heard by a court in the country where the crash happened or where the investigation is taking place, making it easier to obtain witnesses and evidence.
"Courts with crowded dockets are likely to dismiss foreign plaintiffs where there are language problems, esoteric laws and/or missing witnesses," Joseph Sweeney, an emeritus professor of law at Fordham University in New York, wrote in an email.
Sweeney said dismissal of foreign claimants based on such grounds has been "almost customary" since the U.S. Supreme Court's decision in 1981 to throw out lawsuits resulting from the crash of a plane in Scotland.
American courts are a popular forum for lawsuits on damages related to air crashes because juries are often sympathetic to the plaintiffs and are perceived as being more likely to award sizable damages. In domestic air crashes, juries have awarded plaintiffs sometimes millions of dollars per passenger.
For the same reasons, they attract lawsuits even when the crashes take place outside America and involve non-U.S. airlines and passengers and crew who are citizens of other countries.
"America is the land of liability opportunity," said Professor Steve Dedmon, an aviation law expert at Embry-Riddle Aeronautical University's Daytona, Florida, campus. "We are very plaintiff friendly."
Some attorneys are already telling relatives they should consider suing Boeing, because it made the 777 plane. Boeing has declined to comment.
"As long as the possibility that the Boeing plane is related to the incident is not eliminated, there are no limitations on seeking compensation from Boeing," said Wang Guanhua, a Chinese-based lawyer working for Ribbeck Law Chartered, a Chicago firm.
Wang was speaking by phone from the eastern province of Zhejiang, where he had visited a number of relatives in their homes. His visits to family members have also taken him to four major Chinese cities. Wang said the relatives would best benefit from suing Boeing in the U.S. and that he believed they could get $6 million in damages for each passenger.
Ribbeck Law was criticized last month by a Cook County Circuit Court judge for filing a petition asking the court to order Malaysia Airlines and Boeing to turn over any documents related to the plane's disappearance. Judge Kathy Flanagan described the request as improper and threatened to impose sanctions if the firm tried a similar motion again.
Other attorneys have criticized the claims of multimillion-dollar settlements for foreign families as misleading. "Neither we nor any responsible lawyer would presently say that there is any case that can be brought in the United States," Justin Green, a partner at aviation accident law firm Kreindler & Kreindler LLP in New York, wrote in an email. "We will need the wreckage in order to establish a case against Boeing."
Another team of lawyers has argued that rather than take the litigious route in the U.S., the families are better off negotiating a settlement with Malaysia Airlines' insurers.
"We want a quicker settlement and a reasonable settlement," said David Tang, a London-based lawyer working with U.K. firm Stewarts Law and an American firm, who have teamed up and say they've been approached by family members for advice.
Tang was in Beijing this past weekend meeting with Chinese relatives at a hotel where they've been staying. He showed the relatives an information sheet describing how insurance payments for loss of life differ according to nationality.
"What we argue is that a Chinese life should not be worth less than an American's, or whatever," Tang said.
The legal team, if hired by the families, intends to demand more than $1.75 million for each passenger, James Healy-Pratt of Stewarts Law wrote in an email.
If Chinese families sued the Malaysian carrier in China, they could get around 1.5 million yuan ($250,000) per passenger, depending on their age, job, income and other factors, according to Beijing-based aviation lawyer Zhang Qihuai.
In Malaysia, a court would probably not stray too far from the $175,000 compensation limit set by the Montreal Convention, said Jeremy Joseph, a Malaysian aviation lawyer. "The judicial trend for awarding damages in Malaysia is very conservative. It is not the trend here for courts to issue massive awards in damages to the millions," he said.
Associated Press writer Eileen Ng in Kuala Lumpur, Malaysia, and researcher Fu Ting in Shanghai contributed to this report.