## Facts

- On September 1, 1983, Korean Air Lines Flight 007, traveling from New York (JFK) to Seoul, was destroyed over the Sea of Japan by Soviet military aircraft, killing all passengers and crew.
- Wrongful-death actions were filed against Korean Air Lines Co., Ltd. (KAL) in multiple federal district courts throughout the United States.
- The Judicial Panel on Multidistrict Litigation transferred the actions to the U.S. District Court for the District of Columbia for coordinated pretrial proceedings under 28 U.S.C. § 1407.
- The Warsaw Convention and the Montreal Agreement of 1966 limited an airline’s liability for injuries and death in international air carriage to $75,000 per passenger.
- Plaintiffs moved for partial summary judgment seeking a ruling that KAL could not use the $75,000 limit because its passenger tickets did not provide notice in the form required by the Montreal Agreement.
- The Montreal Agreement required the liability-limitation notice to be printed in at least 10-point type, but KAL’s notice was printed in 8-point type.
- The district court denied plaintiffs’ motion and held KAL could invoke the $75,000 limit despite the type-size defect, rejecting contrary Second Circuit authority.
- The district court certified an interlocutory appeal under 28 U.S.C. § 1292(b) on whether KAL could rely on the Warsaw/Montreal limitation despite the defective ticket notice, and the plaintiffs’ steering committee appealed.

## Issues

1. In a multidistrict litigation transfer under 28 U.S.C. § 1407, must the transferee court apply the federal-law precedent that would control in the transferor court’s circuit when the circuits disagree on the governing rule?
2. For actions originally filed in district courts within the Second Circuit, does KAL’s failure to print the Montreal Agreement notice in 10-point type bar KAL from invoking the $75,000 Warsaw/Montreal liability limitation?

## Decision

- The D.C. Circuit reversed the district court’s order to the extent it permitted KAL to claim the $75,000 limitation in cases that originated in the Second Circuit, and remanded for further proceedings.
- The court held that an MDL transfer for coordinated pretrial proceedings does not change the law applicable to each transferred case; the transferee court must apply the same substantive law that the transferor court would apply.
- Where federal circuits have conflicting interpretations of federal law relevant to a transferred case, the transferee court must apply the controlling precedent of the transferor circuit for that case.
- Because Second Circuit precedent treated failure to comply with the Montreal Agreement’s 10-point type requirement as disabling the Warsaw/Montreal liability cap, KAL’s 8-point notice prevented use of the $75,000 limit in Second Circuit-filed actions.

## Legal Principles

- A transfer under 28 U.S.C. § 1407 is for coordinated or consolidated pretrial proceedings and does not alter the substantive law governing each action.
- In MDL proceedings, the transferee court applies the law that the transferor court would apply, including controlling precedent from the transferor circuit on federal questions when circuits differ.
- Under controlling Second Circuit law on the Warsaw Convention as modified by the Montreal Agreement, compliance with the Agreement’s ticket notice requirements (including the 10-point type specification) is a condition to the carrier’s use of the $75,000 per-passenger liability limitation.
- When a carrier’s ticket notice fails the Montreal Agreement’s type-size requirement, the carrier may be denied the treaty-based liability cap in jurisdictions that treat the requirement as mandatory.

## Conclusion

The D.C. Circuit held that, in § 1407 MDL proceedings, the transferee court must apply the same circuit precedent that would bind the transferor court; therefore, for cases originally filed in the Second Circuit, KAL’s use of 8-point type rather than the Montreal Agreement’s required 10-point type barred KAL from invoking the Warsaw/Montreal $75,000 per-passenger liability limitation.


In re Korean Air Lines Disaster of September 1, 1983, 829 F.2d 1171 (1987)