Kreindler Defeats Forum Non Conveniens in Nassau, Bahamas Plane Crash
Loring v. Southern Air Charter Company, LTD
Some of the more difficult and challenging cases that Kreindler faces involve the crashes of small planes operated by small foreign commercial airlines resulting in injuries in a foreign country. These types of cases pose a myriad of legal and factual challenges to successfully obtaining a recovery for our clients, including obtaining personal jurisdiction in the United States over the airline, a motion to dismiss under the doctrine of forum non conveniens, and determining what country’s law applies on the issues of damages and liability. The laws of many foreign countries often provide very limited compensation making a lawsuit in that country impractical.
The case of Aila Tuulikki Loring against Southern Air Charter Company, Inc. (Southern Air), a small Bahamian regional airline, presented these challenges.
Ms. Loring was a Massachusetts resident who resided in that state with her 70-year-old husband, Shelden. The Lorings owned a home in the Bahamas where they resided in the winter months. The Lorings were booked on a short flight from the island of Eleuthera to New Providence Island operated by Southern Air. Because the flight was overbooked, Southern Air contracted with another small airline to provide the plane and flight crew for the trip. The plane that was provided and used for the flight was in a state of disrepair.
When the plane was on its approach for landing at the Nassau International Airport, the pilot’s instruments indicated that the left landing gear was not in a down position. The pilot flew past the air traffic control tower at the airport and the controllers informed the pilot that both the right and left landing gear was in a down position. When the pilot made a turn to begin his second approach to the airport, the plane developed engine trouble and lost altitude. The pilot decided to “ditch” the aircraft in the ocean rather than attempting to land at the airport.
When the plane struck the water, Mr. Loring’s seat became dislodged and he was ejected from the plane through the luggage door and into the water. While still belted to his seat — that had turned upside down — Mr. Loring drowned. Mrs. Loring and the other ten passengers remained in the plane after impact and were able to exit the plane and stay afloat until rescued.
Prior to filing suit, Kreindler’s lawyers did an investigation into Southern Air’s contacts with the United States and discovered that a corporation with the exact same name as Southern Air existed in Maryland. Kreindler filed suit in Federal District Court in Maryland naming both the Maryland corporation and the Bahamian corporation as defendants. Southern Air (Bahamas) moved to dismiss the action, asserting that the Maryland courts lacked personal jurisdiction over it and that the Maryland corporation was an independent entity that was not controlled by Southern Air (Bahamas).
Based on preliminary facts and the legal assertion that the two Southern Air companies were one and the same, Kreindler’s lawyers successfully moved the court for permission to conduct discovery on the issue of personal jurisdiction and the alter-ego relationship between the two Southern Air entities.
This facts revealed during jurisdictional discovery supported the plaintiff’s claim that Southern Air (Maryland) existed only to serve the interests of Southern Air (Bahamas) and that the two companies were one and the same. Specifically, based on evidence gathered from a third-party, Kreindler argued that Southern Air (Maryland) was created for the sole purpose of holding bare legal title to the two aircraft used by Southern Air (Bahamas) for its passenger operations in the Bahamas and its cargo operations into Florida. Based on this evidence, Kreindler argued further that Southern Air (Bahamas) actually purchased and owned the aircraft.
This evidence confirmed Kreindler’s position that Southern Air (Maryland) was created for the sole purpose of serving the interests of Southern Air (Bahamas). Both aircraft used by Southern Air (Bahamas) had registration numbers issued by the Federal Aviation Administration (FAA). Under federal regulations, a foreign person or entity cannot obtain an FAA number for an aircraft. Only United States citizens and corporations may be issued an FAA registration number. Kreindler argued that Southern Air (Maryland) existed for the sole purpose of holding bare legal title to the aircraft used by Southern Air (Bahamas). Although the Articles of Incorporation stated that Southern Air (Maryland) engaged in providing commercial airline passenger and cargo services, it did not engage in any such activities prior to the crash.
Kreindler lawyers further argued that the lease agreement for the aircraft between the Maryland and Bahamas entities was illusory, asserting that Southern Air (Bahamas) was the true owner of the aircraft, Southern Air (Bahamas) maintained the aircraft contrary to the provision of the lease placing that obligation on Southern Air (Maryland), and Southern Air (Bahamas) often failed to make monthly rental payments without consequence.
Because the evidence unearthed during discovery was so compelling and contrary to the deposition testimony of the defendant, Kreindler’s lawyers moved for a judgment against the defendants under the Fraud on the Court doctrine. Faced with the compelling evidence that the two Southern entities were one and the same, and the plaintiff’s fraud on the court motion, counsel for Southern Air withdrew its challenge to the Maryland court’s personal jurisdiction over Southern Air (Bahamas).
Undaunted, the defendants moved to dismiss the action under the doctrine of forum non conveniens. The court denied the motion, accepting the plaintiff’s arguments that Maryland was a convenient forum since both corporations were present in Maryland, the motion was untimely, and tactically brought only after the statute of limitations had expired in the Bahamas.
The case then settled.
Photo Credit: Piper PA-31-350 plane, Andrew Thomas