Boston Business Litigation Blog

Judge Rules Legal Sea Foods is Not Entitled to Insurance Coverage for Pandemic-Related Losses

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In early March 2020, Legal Sea Foods (Legal) signed an insurance policy with Strathmore Insurance Co. (Strathmore). Shortly thereafter, Governor Baker issued an order prohibiting Massachusetts restaurants from providing on-premises food or beverage consumption. As a result of this order and similar orders in other states (COVID-19 restriction orders), Legal submitted a claim to Strathmore seeking coverage for business interruption losses. Strathmore denied the claim and, in May 2020, Legal sued Strathmore for two counts of breach of contract.

Updated IBA Rules on the Taking of Evidence in International Arbitration

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On February 15, 2021, the International Bar Association ("IBA") released an update to its highly influential Rules on the Taking of Evidence in International Arbitration ("IBA Rules"). The IBA Rules are a mix of common law and civil law traditions, and serve as the ground rules for discovery and the treatment of evidence in a majority of international arbitrations. Tribunals and parties frequently include reference to the IBA Rules in their Terms of Reference, and rely on the IBA Rules to decide evidentiary disputes between the parties.

Can Court-Ordered Restrictions on Co-Parenting Communications Violate a Parent's Constitutional Rights?

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The short answer, according to a recent Appeals Court Memorandum and Order Pursuant to Rule 23.0, is yes. In the unpublished case of Sanavage v. Chavis, the parties were never married and were the parents of one child together. Following a trial on the father's complaint for custody, support and parenting time, the Probate and Family Court issued a judgment ordering, in relevant part, that the child should continue to reside primarily with the mother, that father would have regular parenting time, and that the parents would abide by specific provisions with respect to their co-parenting communications, such as only communicating with each other about matters related to the child and only via text message or email, among other restrictions. The trial judge inserted these detailed provisions because the evidence presented at trial demonstrated that the parties had experienced difficulty in co-parenting effectively throughout the child's life; presumably, the judge was intending to reduce any similar friction by imposing certain limitations on the parties' future co-parenting communications.

What is the Statute of Limitations Period for a Chapter 93A Claim for Debt Collection Efforts?

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In Aja v. Select Portfolio Servicing, Inc. (Memo and Order, November 25, 2020), the United States District Court for the District of Massachusetts allowed Select Portfolio Servicing, Inc.'s and Wells Fargo Bank's ("Defendants") motion to dismiss the amended complaint because Plaintiff failed to state a claim.

Despite Mistake in Contract Language, Former Employee Not Permitted to Collect Windfall Severance

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In Dahua Technology USA, INC. v. Zhang, the District Court granted a Plaintiff-employer, Dahua Technology USA's, motion for summary judgment and ordered the reformation of the severance agreement at issue. In so holding, the Court noted that the Defendant-employee, Zhang, breached his duty of good faith and fair dealing in attempting to hold Dahua Technology to erroneous contract terms and that there was no genuine dispute that a mistake (mutual or otherwise) occurred in the drafting of the severance agreement at issue.

In disability discrimination lawsuit, former employee held bound by inconsistent statement made in Social Security Disability benefits application

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Under the principle of judicial estoppel, a party to a lawsuit is precluded from asserting a claim that is inconsistent with a prior statement or position. In Thompson v. Gold Medal Bakery, Inc., the First Circuit recently applied this principle in the context of a lawsuit involving claims of disability discrimination against a former employer.

Banks Challenge Oregon's COVID Foreclosure Moratorium

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A group of Oregon banks and banking organizations have come together to challenge the legality of that state's emergency COVD-19 banking regulations. Enacted on June 30, 2020 and in effect until it expired on December 31, Oregon's House Bill (HB) 4204 placed limitations on financial institutions' abilities to enforce mortgage contracts. Specifically, HB 4204 mandated that banks provide forbearance from mortgage payments to individual and commercial borrowers who attested that their inability to pay related to the COVID-19 pandemic. Banks also could not pursue collection or foreclosure actions during this time. Even though these emergency forbearance provisions have now expired, lenders will not be able to collect accumulated overdue sums until their borrowers' loans reach maturity-often years or decades in the future. Borrowers have the power to enforce HB 4204 by filing a lawsuit against any lender who violates these emergency regulations.

Can a savings clause save an indemnification provision that would otherwise be void under M.G.L. c. 149, § 29C?

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The U.S. District Court for the District of Massachusetts addressed this issue in a recent order on a motion in limine in the case Lennar Northeast Properties, Inc. d/b/a Lenna Northeast Urban, and Lennar Hingham Holdings, LLC v. Barton Partners Architects Planners Inc., et. al.

Virtual Arbitration After COVID

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The world has grown more accustomed to doing business virtually during the COVID-19 pandemic. As the vaccine rollout progresses, and businesses and lawyers ponder a future post-pandemic, the question arises: what permanent changes to the business world will this virus, and our greater reliance on virtual interactions, have wrought?

The Impact of Social Security Disability Insurance (SSDI) Benefits on Child Support

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Pursuant to the 2018 Child Support Guidelines, "[i]f a parent receives social security benefits or SSDI benefits and the children of the parties receive a dependency benefit derived from that parent's benefit, the amount of the dependency benefit shall be added to the gross income of that parent." Thus, disability benefits are taken into account when determining a noncustodial parent's child support obligation. Recently, in Leavitt v. Restuccia, the Appeals Court described how to calculate that benefit as part of a noncustodial parent's income for child support purposes.

Lack of Testamentary Capacity in Massachusetts Will Contests

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Showing a lack of testamentary capacity in Massachusetts will and trust litigation is not easy. In Joseph A. Haddad, et. al. v. Marcel A. Haddad, et. al., the Massachusetts Appeals Court recently reversed a decision by the Massachusetts Superior Court by finding that a father who changed his estate planning documents to leave everything to only one of his three sons while likely suffering from the early stages of dementia-did not lack testamentary capacity to do so.

Circuit Split Grows on Benign Language Exception for Debt Collection Envelopes

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The United States Court of Appeals for the Sixth Circuit has joined the split from holdings by the Fifth and Eighth Circuits regarding a "benign language" exception for debt collection letters. The Sixth Circuit instead joined with the Seventh Circuit in holding that the Fair Debt Collection Practices Act ("FDCPA") does not contain a "benign language" exception to the requirement that the envelope for a debt collection letter contain no language other than that necessary to facilitate mail delivery. Donovan v. FirstCredit Inc.

Jurisdiction for Filing of Divorce in Massachusetts

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In new decision, De-Paz York v. York, the Appeals Court finds that the Probate and Family Court did not have subject matter jurisdiction to issue a divorce judgment. In that case, the parties last lived together in Colombia on March 30, 2017. The wife filed a complaint for divorce in Massachusetts on October 30, 2017, claiming there had been an irretrievable breakdown of the parties' marriage as of April 1, 2017. The wife resided in Norwell, MA at the time she filed the complaint.

Superior Court Sheds Light on the Application of Frustration of Purpose Doctrine During the COVID-19 Pandemic

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In the recent case of UNMV 205-207 Newbury, LLC v. Caffé Nero Americas, Inc., the Suffolk County Superior Court weighed in on the applicability of the frustration of purpose doctrine in connection with a commercial lease. In this specific case, the tenant ("Caffé Nero") operated a Caffé Nero restaurant under a 15-year lease that specified that the only purpose for which the tenant could utilize the leased premises was to operate a Caffé Nero location. On March 24, 2020, Governor Charlie Baker issued an executive order that prohibited any on-premises consumption of food or beverages at restaurants in response to the outbreak of the coronavirus pandemic. Caffé Nero thereafter wrote to its landlord and explained that it could not pay its rent for the month of April due to the mandatory closure of the cafe. The landlord responded by refusing to waive or reduce any of Caffé Nero's rent payments and, later, by proclaiming to terminate the lease and informing Caffé Nero that it must immediately quit and surrender the premises. Following further disputes and negotiations with the landlord regarding the amount that was owed for the unpaid rent, Caffé Nero vacated the premises in October 2020, having paid no rent for the months from April - October.

Can Massport treat a car sharing company like a traditional airport rental car company? Supreme Judicial Court to weigh in.

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In January the Supreme Judicial Court (SJC) heard oral argument in a case challenging the ability of car sharing company Turo to facilitate pickups at Logan International Airport without paying the taxes and fees that Massport requires of traditional car rental companies. Like Airbnb and HomeAway do for the short-term house rental market, Turo allows individual car owners to rent out their cars for short periods of time when they would otherwise sit unused. The case, Massachusetts Port Authority v. Turo, Inc., promises to have national implications for whether car sharing companies and other internet businesses that facilitate peer-to-peer transactions can shield themselves from liability by relying on the Communications Decency Act of 1996 (CDA). The CDA protects internet businesses from being held liable for claims that would treat the website as the publisher or speaker of objectionable content posted by third parties. Search engines and social media applications are classic examples of companies often protected by the CDA, but it is less clear whether the immunity extends to companies that do more than simply serve as a bulletin board for third-party posts.

Employees Beware: Appeals Court Allows Termination for Exercising Statutory Right

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Massachusetts law gives employees the right to place a written statement in their personnel file if they disagree with information their employer has put into the file that has or may negatively affect the employee's qualification for employment, promotion, transfer, additional compensation or the possibility that the employee will be subject to disciplinary action. But in the recent case of Meehan v. Medical Information Technology, Inc., the Appeals Court held that an employer can fire an at-will employee simply for exercising this right.

United States Supreme Court Hold Foreign Government Taking From Own Citizens Does Not Fall Within Exception To Foreign Sovereign Immunities Act

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The Supreme Court of the United States recently held in Federal Republic of Germany v. Philipp that Germany was immune from suit brought by heirs of Jewish art dealers on the grounds that the heirs' claims did not fall within an exception to the Foreign Sovereign Immunities Act ("FSIA").

Life Sciences Companies Increase the Use of International Arbitration

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As a natural result of their expansion even further into the global market, life sciences companies have increasingly relied on international arbitration to resolve disputes, joining a growing number of industries that have made a similar move in recent years.  

Can a Court Deviate from the Child Support Guidelines?

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In Luce v. Folino-Inadoli, the Massachusetts Appeals Court (Rule 23.0 decision) affirmed the Probate and Family Court's reduction of the child support amount paid by the father to the mother, as well as the denial of retroactive relief for the father.

Alimony Statute Does Not Restrict Parties' Ability to Negotiate / Agree Upon How Alimony is Calculated

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In a recent Rule 23 decision, a panel of the Massachusetts Appeals Court reversed the lower court and held that G. L. c. 208, section 53 (i.e., section 53 of the Alimony Reform Act) does not restrict parties' ability to negotiate and agree upon how alimony is calculated when entering into a separation agreement. (See Pedro v. Pedro).  

Who Should Regulate FinTech Companies? OCC and CFPB at Odds

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Over the past decade, there has been rapid growth in technology-enabled financial services, referred to as FinTech. This growth has included the creation and expansion of nonbank FinTech companies, i.e., companies that do not have a banking license and generally do not take traditional deposits. This rapid growth has inevitably led to questions of how such FinTech entities should be regulated.  

School Costs Cannot Form Basis to Deny Housing Construction Permits

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The Massachusetts Land Court, in two separate opinions, has held that the costs of educating school-age children who may occupy a housing complex is not a valid basis for denying a developer's request for a building permit. While the Massachusetts Appeals Court had skirted this issue years ago, these two cases are the first to squarely address the question of whether fiscal impact on a public school system is a valid ground on which to deny a housing proposal. The Bevilacqua Co., Inc. v. Lundberg, et al.160 Moulton Drive LLC v. Shaffer.

What is the Automatic Restraining Order in a Divorce Case?

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A question that frequently comes up in a divorce is what effect the filing has on the financial lives of the parties. Can they still use the joint credit card? Change the beneficiaries on the life insurance policy? Spend money?

Can U.S. Companies Can Be Sued in the U.S. for their Supplier's Human Rights Violations? Supreme Court to Weigh In.

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Last month, the U.S. Supreme Court heard oral argument in a pair of cases that question the role of the U.S. court system in holding companies accountable for profiting from child slavery in foreign countries. The Alien Tort Statute (ATS) gives federal courts jurisdiction to hear lawsuits filed by non-U.S. citizens for some violations of international law. In two related cases, the Supreme Court will decide whether U.S. corporations--as opposed to individuals--may be liable under the statute, and whether the allegations of corporate wrongdoing in these cases were sufficiently connected to the U.S.  

In Case of First Impression, First Circuit Holds that Retaliation Claims Under the False Claims Act Must Be Evaluated Under the But-For Causation Standard

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The False Claims Act prohibits employers from discriminating against an employee "because of" his or her protected conduct. In a case of first impression recently decided, Lestage v. Coloplast Corp., the First Circuit explained the meaning of "because of."  Lestage, a salesperson, sued Coloplast alleging that, after it learned she had filed a qui tam action against it and against one of its customers, Coloplast retaliated against her in violation of the False Claims Act by placing her on leave and then assigning her inferior accounts when she returned. A jury trial awarded Lestage $762,525 in compensatory damages. Coloplast unsuccessfully moved for judgment as a matter of law and new trial, and then appealed. The First Circuit affirmed the judgment.

Receiving Collection Letter Overstating Debt Owed Does Not Constitute Harm Sufficient to Create Standing Under Fair Debt Collection Practices Act

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In Nettles v. Midland Funding LLC the Seventh Circuit recently held Plaintiff Ashley Nettles did not have standing to bring a claim against Defendant Midland Funding LLC under the Fair Debt Collection Practices Act ("FDCPA") on the grounds that Plaintiff suffered no harm in fact for receiving a debt collection letter that overstated her remaining balance owed to Defendant.    

What Happens to My Health Insurance Post-Divorce?

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In many divorce cases, the parties and their children maintain common health insurance coverage, often through a plan that is available as the result of one party's employment. If both parties are employed at the time of their divorce, then it is commonplace for each of them to agree to obtain and pay for his or her own individual health insurance post-divorce. However, in cases where one party will not have the ability to access reasonably priced health insurance post-divorce - normally because he or she is not eligible to receive full health insurance coverage through employment - the parties' Separation Agreement or Judgment of Divorce must address how each party will obtain and pay for their health insurance. Luckily, and depending on the specific insurance plan(s) at issue, Massachusetts allows individuals to remain on their ex-spouse's health and dental insurance plans post-divorce, as provided for in G. L. c. 175, 110I. Importantly, this right is not automatic; if one party intends to stay on an ex-spouse's health insurance plan post-divorce, then that entitlement must be specifically incorporated into the parties' Separation Agreement or Judgment of Divorce in order to be enforceable. 

Massachusetts Paid Family and Medical Leave Act

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On January 1, 2021, the Massachusetts Paid Family and Medical Leave Act ("PFML") will begin providing benefits to eligible workers. Eligible workers will be entitled to the following benefits:

Reflections on Client Advocacy and Practicing Family Law in Massachusetts During a Global Pandemic

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As 2020 draws to an end, COVID-19 continues to impact the way of life for individuals and businesses across the Commonwealth, and the Massachusetts Probate and Family Court bar is no exception. Beginning in March 2020, and seemingly overnight, Probate and Family Court judges, clerks, administrators, staff and domestic relations attorneys had to rework their practices to address the challenge of pivoting from an entrenched system to adapting to a new reality. 

Can Employers Require Their Employees To Receive A COVID-19 Vaccine?

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On December 16, 2020, the United States Equal Employment Opportunity Commission ("EEOC") issued guidance addressing questions related to the administration of the COVID-19 vaccine to their employees.  Under this guidance, employers may require their employers to be vaccinated.  However, requiring employees to be vaccinated raises multiple legal issues that employers should be aware of.

First Circuit Reverses Its Earlier Decision Voiding a Foreclosure Sale Over a Potentially Defective Notice of Default After the SJC, on Certification, Found the Notice Was Not Misleading

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When a borrower defaults on the terms of the mortgage, the loan is accelerated, thereby allowing the bank to conduct a foreclosure sale. Because Massachusetts is a non-judicial foreclosure state, a bank does not need to obtain a judgment to foreclose (provided the mortgage contains a statutory power of sale provision). When sending a notice of default, a bank must strictly comply with the terms of the mortgage and also comply with statutory provisions governing the foreclosure of mortgages.

First Circuit Upholds New Trial on Basis of Confrontation Clause Violation

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In United States v. Ackerly, the government appealed the District Court's decision to grant a new trial on the basis of the defendant's argument that the government violated the Confrontation Clause. In that case, the defendant and her co-defendants were alleged to have conducted a fraudulent scheme, which consisted of bribing an employee of a firm (ISS) in exchange for non-public information about ISS's proxy-voting advice, and to have concealed their scheme by falsely invoicing their own employer's (Georgeson, Inc.) clients for a portion of the cost of the bribes. 

Massachusetts Appeals Court Affirms Superior Court Decision that Retreat Rentals on an Uninhabited Coastline in Duxbury do not Violate Conservation Restriction

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In Wildlands Trust of Southeastern Mass., Inc v. Cedar Hill Retreat Center, Inc., the Massachusetts Appeals Court affirms a Superior Court judge's determination that Defendant Cedar Hill Retreat Center, Inc. ("Cedar Hill") did not violate a conservation restriction placed upon the coastal lands on the Duxbury Shore despite the trial judge's misinterpretation of the restriction's provisions.

"CORPORATE FAMILY LAW" AT FITCH: Business Litigators and Family Law Litigators: Learning from Each Other

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This post is part one in a series aimed at helping business litigation and family law litigation attorneys expand their arsenal of strategies for helping clients resolve their disputes. To the casual observer, the practice of business litigation and the practice of family law litigation may appear to have little in common.  Each practice area has its own separate governing statutes and its own distinct and well-developed body of case law.  Indeed, in Massachusetts, business and family law litigation take place in different trial courts, with business litigation often occurring in The Superior Court Department and family law litigation in The Probate and Family Court Department.  

European Data Protection Board Issues Recommendations to Guide Data Transfers from European Union to the United States

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In July 2020, the European Court of Justice invalidated the use of the Privacy Shield framework, which thousands of companies had been using to transfer data between the European Union (EU) and the United States. The Court reasoned that the Privacy Shield did not provide the required level of protection to the transferred data, as the level of protection required for data in the European Economic Area is not diminished merely because that data is transferred outside of the EU.

Face-to-Face Meeting Requirement Before Foreclosure Satisfied by Letter and Visit to Arrange Later Meeting

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The United States Court of Appeals for the First Circuit has held that, where a foreclosing mortgagee is required by HUD regulations incorporated into the mortgage, to make reasonable efforts to hold a face-to-face meeting with a borrower before foreclosure, there is no requirement that those efforts to arrange such a meeting must be made by someone with the "qualifications or authority to conduct a face-to-face meeting for the purpose of resolving mortgage delinquencies."  Donahue v. Federal National Mortgage Association

SJC Rules that Statute of Limitations in Condo Construction Defect Claims are Specific to Each Building in a Multi-Building Development, Not the Entire Development

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In a win for developers, Supreme Judicial Court says six-year clock for design and construction defect claims runs separately for each building within condominium development.

Massachusetts peer review privilege does not apply in federal cases alleging health care billing fraud

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A magistrate judge for the U.S. District Court for the District of Massachusetts recently held the peer review privilege did not apply in a case alleging health care billing fraud. In Wollman v. Massachusetts General Hospital, Dr. Lisa Wollman, a former anesthesiologist at Massachusetts General Hospital ("MGH"), brought a qui tam action under the False Claims Act and the Massachusetts False Claims Act, alleging that MGH and its physicians organization fraudulently billed Medicare and Medicaid for "overlapping and concurrent surgeries that required two patients to be under anesthesia at the same time." In addition to alleging these overlapping surgeries were fraudulent billing practices, Dr. Wollman alleged they endangered patients by placing them under anesthesia for longer than necessary, violated informed consent regulations, violated recording keeping regulations, and caused the government to pay for teaching physicians who were not present during key parts of the surgeries.

9th Circuit to Judge Regulation of Mandatory Employment Arbitration

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On December 7, the Ninth Circuit Court of Appeals is scheduled to hear oral argument in a case of particular relevance to employers who use arbitration to resolve disputes with employees. The case, Chamber of Commerce of the U.S. v. Becerra, considers whether states can prevent employers from conditioning an offer of employment or receipt of employment benefits on an employee's agreement to arbitrate (rather than litigate) any future disputes with the company. In 2019, the State of California passed Assembly Bill 51 (AB 51)-a law that would have done just that. But a California federal judge blocked the law before it could go into effect, reasoning that the Federal Arbitration Act's (FAA's) pro-arbitration policy takes precedence over (or "preempts") the state law. The State appealed to the Ninth Circuit.

A Zero is Something: The Massachusetts Appeals Court Concludes that a Divorce Judgment Provided for a "Zero-Dollar Alimony Award"

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People often think about the number zero as only nothing, when in fact, the invention of the humble zero constantly forces us to realize that the absence of something is a thing in and of itself.  In a recent decision, the Massachusetts Appeals Court changed the durational limits of an alimony award based on an implicit "zero-dollar alimony award" in the separation agreement, once again proving that when it comes to zero, nothing absolutely matters. 

Because The Montreal Convention Preempts All Local Claims That Fall Within Its Scope

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The liability of aircraft carriers is governed by the Convention for the Unification of Certain Rules for International Carriage by Air, May 28, 1999, S. Treaty Doc. No. 106-45 (2000) (the "Montreal Convention"), a multilateral treaty to which the United States is a signatory.  The Montreal Convention superseded the Warsaw Convention of 1934 and some of the provisions are essentially the same in both conventions.