Wednesday, March 25, 2009
Court Rules Plane-Crash Suit May Be Tried in China
By SHERRI M. OKAMOTO, Staff Writer
China provides a suitable alterative forum for litigation arising from the November 2004 crash of a China Eastern Yunnan Airlines flight, this district’s Court of Appeal ruled in an opinion ordered published yesterday.
In its Feb. 26 decision, Div. Seven affirmed Los Angeles Superior Court Judge James C. Chalfant’s order staying the consolidated claims by relatives of the crash victims on the ground of forum non conveniens.
The ill-fated flight took off from the Baotou city airport in Inner Mongolia, bound for Shanghai. The plane, a Bombardier CRJ-200, crashed into an ice-covered lake in Nanhai Park seconds after takeoff.
All 47 passengers and six crew members were killed, as were two people on the ground.
Relatives of the crash victims filed separate suits against China Eastern Airlines Co. Ltd— a commercial airline incorporated in China, with its principal place of business in Shanghai which had acquired China Eastern Yunnan Airlines’ assets—and the manufacturers of the plane and of the plane’s engines in the Los Angeles Superior Court.
The four cases were consolidated, and the airline moved to dismiss or stay the action on the basis that California was not a convenient forum for trial of the actions, and China provided an adequate alternative forum for trial. The other defendants joined in the motion.
Bombardier Inc., a Canadian corporation with its principal place of business in Montreal, designed, manufactured, assembled and tested the plane in Canada and sold it to the China Aviation Supplies Import and Export Corporation in Quebec in 2002.
The airplane was powered by two engines designed and manufactured by General Electric Co., which is incorporated in New York and has its principal place of business in Fairfield, Conn.
If the motion were granted, the defendants promised to submit themselves to personal jurisdiction in China, waive any applicable statutes of limitations so long as the actions were re-filed in China within six months, and satisfy any final judgment by the Chinese courts.
The airline also stated that it would not contest liability or seek to enforce limitations on wrongful death damages, and would fully compensate the families of the victims in accordance with Chinese law.
In opposition to the motion, the family members of the crash victims argued that they would not be able to receive a fair trial in China. They contended that the airline was a government-owned entity in which the government was encouraging foreign investment, and that the Chinese court system was subject to the control of the Communist Party leadership.
Chalfant acknowledged there “may be serious problems in the Chinese judicial system,” but absent any evidence of a personal injury or wrongful death case against a government-owned or government-controlled entity that was subject to governmental manipulation and interference or that the plaintiffs were likely to be mistreated by the Chinese justice system, Chalfant reasoned that the Chinese legal system was adequate for the victims’ family members to “get basic justice.”
He granted the defendants’ motion and stayed the consolidated actions for the purpose of permitting proceedings in China, conditioned on the defendants honoring their promises.
Writing for the appellate court, Justice Frank Y. Jackson explained that an alterative forum is suitable if it has jurisdiction and an action in that forum would not be barred by the statute of limitations, except in “rare circumstances” where the alternative forum is a foreign country which lacks an independent judiciary or due process of law.
“Plaintiffs must show more than general allegations of corruption, lack of due process or other factors making an alternative forum unsuitable,” he said.
Jackson noted the conflicting opinions of expert witnesses regarding the quality of the Chinese justice system, but because the evidence accepted by the trial court as true was not completely implausible, he concluded substantial evidence supported Chalfant’s conclusion that Shanghai’s courts were capable of adjudicating complex, multi-party litigation involving airplane crashes. He further reasoned that Chalfant did not abuse his discretion in determining that California was a seriously inconvenient forum because the crash had occurred in China, all of the victims—except one Indonesian passenger—were Chinese citizens, and none of the defendants were California corporations.
Although he acknowledged that some evidence concerning the airplane’s design and manufacture could be located in the United States, Jackson concluded that this did not make California a convenient forum, especially when the defendants have all committed themselves to participating in the trial in China.
Justices Fred Woods and Laurie D. Zelon joined Jackson in his decision.
The victims’ family members were represented by Robert J. Nelson and David L. Fiol of Lieff, Cabraser, Heimann & Bernstein and Kenneth K. Tanji of the Law Offices of Michael S. Yu. Nelson and Tanji declined to comment.
W. Mark Wood, Wallace M. Allan, Haley M. McIntosh, and Cynthia A. Merrill of O’Melveny & Myers represented China Eastern Airlines.
Allan opined that the appellate court’s decision “is an important precedent establishing that China is an adequate alternative forum for cases involving airline crashes in China,” which would mean that “future airline crashes in China will be litigated in China, where they belong, rather than the United States.”
A. Kristine Floyd and Julie W. Russ of Allen Matkins Leck Gamble Mallory & Natsis represented Bombardier. They could not be reached for comment.
Joseph D. Lee, Joshua P. Groban and Kevin A. Goldman of Munger, Tolles & Olson represented General Electric Co. Lee declined to comment.
The case is Guimei v. General Electric Co., 09 S.O.S. 1765.
Copyright 2009, Metropolitan News Company