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United States: Supreme Court Opinion in Trans World Airlines v. Franklin Mint (Liability Limits under Warsaw Convention; Enforceability of Convention in U.S. Courts; Use of Last Official Price of Gold to Determine Limits in U.S. Dollars)*
Published online by Cambridge University Press: 04 April 2017
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- Judicial and Similar Proceedings
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- Copyright © American Society of International Law 1984
Footnotes
*
[Reproduced from the Slip Opinion provided by the U.S. SupremeCourt.]
[The U.S. Court of Appeals for the Second Circuit Decision in Franklin Mint v. Trans World Airlines, of September 28, 1982, appears at 22 I.L.M. 92 (1983). Montreal Protocols 3 and 4, amending the Warsaw Convention by providdng higher liability limits and by introducing the SDR as a monetary unit in which limits are expressed, appear at 22 I.L.M. 13 (1983). The U.S. Senate rejection of these Protocols on March 8, 1983, is noted at 22 I.L.M. 692 (1983).]
References
* [See I.L.M. page 824.]
1 Convention for the Unification of Certain Rules Relating to International Transportation by Air, Oct. 12, 1929, 49 Stat. 3000, T. S. No. 876 (1934), reprinted at 49 U. S. C. § 1502 note.
2 Had such a declaration been made, and an additional fee paid, Franklin Mint would have been able to recover in an amount not exceeding the declared value. See Convention Article 22(2), 49 U. S. C. § 1502 note.\
3 With respect to foreign air transportation FAA powers are now exercised by the Department of Transportation in consultation with the Department of State. 49 U. S. C. § 1551 (Supp. V 1981). For simplicity this opinion will continue to refer only to the CAB.
4 See 49 U. S. C. § 1373(a); cf. 14 CFR §§ 221.38(a)(2), 221.38(j) (1983).
5 49 U. S. C. § 1373(b)(1). CAB regulations requires each carrier to notify air transport users of liability limits. “The notice shall be clearly and conspicuously included on or attached to all of [the carrier's] rate sheets and airwaybills.” 14 CFR § 205.8 (1983).
6 See Ch. 41, §1, 31 Stat. 45 (1900) (exchange rate stated in terms of grains of gold per dollar).
7 Presidential Proclamation No. 2072, 48 Stat. 1730 (1934), pursuant to the Gold Reserve Act of 1934, 48 Stat. 337 (1934).
8 The domestic enabling legislation was the Bretton Woods Agreements Act, 59 Stat. 512 (1945). See Articles of Agreement of the International Monetary Fund, 60 Stat. 1401, 2 U. N. T. S. 39, T. I. A. S. No. 1501 (1945).
9 Par Value Modification Act, Pub. L. No. 92-268 §2, 86 Stat. 116 (1972).
10 Par Value Modification Act, Pub. L. No. 93-110 §1, 87 Stat. 352 (1973).
11 CAB Order 72-6-7, 37 Fed. Reg. 11384 (1973), implemented (for checked passenger baggage) in 14 CFR §221.176 (1973).
12 CAB Order 74-1-16, App. 54, 39 Fed. Reg. 1526 (1974), implemented (for checked passenger baggage) in 14 CFR §221.176 (1975).
13 Second Amendment of the Articles of Agreement of the International Monetary Fund, Apr. 30, 1976, [1976-1977] 29 U. S. T. 2203, T. I. A. S.No. 8937.
14 The SDR was originally created by the IMF nations in 1969. It was then valued at one thirty-fifth of an ounce of gold, or one 1969 dollar. See First Amendment of the Articles of Agreement of the International Monetary
Fund, July 28, 1969, [1969] 20 U. S. T. 2775, T. I. A. S. No. 6748. However there is no longer any fixed correspondence between the SDR and gold; the SDR is defined as a specified basket of western currencies.
15 Bretton Woods Agreements Act of 1976, Pub. L. No. 94-564, §6, 90 Stat. 2660 (1976).
16 Montreal Protocol No. 4, done Sept. 25, 1975, reprinted in A. Lowenfeld, Aviation Law, Documents Supplement 991, 996 (2d ed. 1981). Convention signatories who do not belong to the IMF determine for themselves
how the liability limit will be converted into their national currencies. Ibid.
17 See A. Lowenfeld, Aviation Law §6.51, at 7-171 (2d ed. 1981).
18 On November 17, 1981, the Senate Committee on Foreign Relations reported in favor of consenting to ratification. But on March 8, 1983, by a vote of 50 to 42 in favor of ratification, the Senate failed to reach the twothirds majority required for consent. The matter remains on the Senate calendar. See S. Exec. Rep. No. 97-5 (1981); 129 Cong. Rec. S2270, S2279 (daily ed. Mar. 8, 1983); S. Exec Rep. No. 98-1 (1983).
19 App. 56-57; 39 Fed. Reg. 1526 (1974). TWA is included in the Order's appendix that lists the carriers at which the Order is directed. Id., at 1527.
20 Three internal agency memoranda have addressed the problem. J. Golden, Director, Bureau of Compliance and Consumer Protection, CAB, Memorandum, (May 20,1981), App. 33 (urging retention of the $42.22 conversion rate until the CAB and the Departments of Transportation and State have agreed on a new rate); P. Kennedy, Chief, Policy Development Division, Bureau of Consumer Protection, CAB, Memorandum, (Mar. 18, 1980), App. 42 (urging adoption of the free market price of gold as the conversion factor); J. Gaynes, Attorney, Legal Division, Bureau of International Aviation, CAB, Memorandum, (Apr. 18, 1980), App. 60 (opposing the Kennedy memorandum recommendation).
21 CAB Order 78-8-10, 43 Fed. Reg. 35971, 35972 (1978) (liability limit of $20 per kilogram).
22 49 U. S. C. § 1502 note. The United States has, in fact, followed this procedure once before. on November 15, 1965 the United States delivered a formal notice of denunciation of the Convention to the Polish Peoples Republic. See Lowenfeld, and Mendelsohn, , The United States and the Warsaw Convention, 80 Harv. L. Rev. 497, 546-552 (1967). The notice was later withdrawnGoogle Scholar.
23 See Restatement (Second) of Foreign Relations Law of the United States § 153 and comment c (1965).
24 However, Article 39(2) of the Convention expressly permits a Convention signatory to withdraw by giving timely notice. Plainly, a party to a treaty of voluntary adhesion can have no need for the doctrine of rebus sic stantibus, except insofar as it might wish to avoid the notice requirement.
25 In this connection the Court of Appeals stated:
“[In repealing the Par Value Modification Act] Congress thus abandoned the unit of conversion specified by the Convention and did not substitute a new one. Substitution of a new term is a political question, unfit for judicial resolution. We hold, therefore, that the Convention's limits on liability for loss of cargo are unenforceable in United States Courts.” Franklin Mint Corporation v. Trans World Airlines, Inc., 693 F. 2d 303, 311 (CA2 1982) (footnote omitted).
In our view Congress has not abandoned any “unit of conversion specified by the Convention“—the Convention specifies liability limits in terms of gold francs and provides no unit of conversion whatsoever. To the contrary, the Convention invites signatories to make the conversion into national currencies for themselves. In the United States the CAB has been delegated the power to make the conversion, and has exercised the power most recently in Order 74-1-16. We are not called upon to “[s]ubstitut[e] a new term,” but merely to determine whether the CAB's Order is inconsistentwith the Convention. That determination does not engage the “political question” doctrine.
26 The dissent apparently has no difficulty accepting that while Congress selected the conversion rate between gold and the dollar “[o]ur practice was consistent with the Convention,” see post, at 17 n. 6, even though the conversion rate selected bore no relation whatsoever to the dollar price of gold on the free market, see infra, nn. 35, 37. The dissent does not explain why the CAB, whose powers are exercised pursuant to express congressional delegation, was disqualified from setting a similar conversion rate one year after Congress stopped doing so.
Article 22(4) of the Convention expressly permits each signatory nation to convert the Convention's liability limits into any national currency, but provides no conversion rates for doing so. In this country, 49 U. S. C.
§ 1373(a) requires such a conversion into dollars. The CAB has been delegated authority under which it may determine the appropriate conversion rate, and it has exercised that authority. Thus, for the extremely narrow purpose of converting the Convention's liability limits into dollars Congress has indeed “delegated authority over the currency to the CAB.” See post, at 18 n.6. We may overrule the CAB's action only if we conclude that it is inconsistent with the purposes of the Convention or with domestic law.
27 See generally Heller, , The Value of the Gold Franc—A Different Point of View, 6 J. Mar. L. & Com. 73, 94-95 (1974); Asser, Golden Limitations of Liability in International Transport Conventions and the Currency Crisis, 5 J. Mar. L. & Com. 645, 664 (1974); Lowenfeld & Mendelsohn, supra, at 499;Google Scholar Drion, H., Limitation of Liabilities in International Air Law 183 (1954); Excerpt From Warsaw Convention Conference Minutes, October 4-12, 1929, reprinted at App. 161-164Google Scholar.
28 See IMF Survey 125 (April 17, 1978); IMF Survey 114 (April 9, 1979).
29 See S. Exec. Rep. No. 98-1, at 42 (1983); IMF, International Financial Statistics, Yearbook, 521 (1983).
The CAB has in fact accepted airline tariffs in which liability limits are based on SDRs instead of the fixed $9.07 figure. See, e. g., Passenger Rules, Tariff No. PR-3 (CAB No. 55), Rule 25(D)(l)(a)(ii) (March 30,1983);CAB Order 81-3-143 (Application of British Caledonian Airways Limited (March 24, 1981).
30 Fitzgerald, , The Four Montreal Protocols to Amend the Warsaw Convention Regime Governing International Carriage by Air,42 J. Air Law & Comm. 273, 277 n. 12(1976)Google Scholar.
31 SDRs have been adopted as the basis for converting the Convention limits into national currencies in Canada (Currency and Exchange Act: Carriage By Air Act Gold Franc Conversion Regulations, Jan. 13, 1983,117 Can. Gaz., pt. II, No.2, at 431 (Jan 26, 1983) (reprinted in Brief for Petitioner TWA at BA36); Italy (Law No. 84 of March 26,1983, 90 Gazetta Ufficiale della Republica Italiana (Apr. 1, 1983) (English translation at Brief for Petitioner TWA at BA37); the Republic of South Africa (Carriage by Air Act, No. 17 of 1946, as amended by No. 5 of 1964 and No. 81 of 1979, Stat. Rep. S. Afr. (Issue No. 13) 15, implemented by Dep't of Transport Notice R2031 (Sept. 14, 1979)) (reprinted in Brief for Petitioner TWA at BA39); Sweden (Carrier by Air Act (1957:297), ch. 9, §22, (as amended Mar. 30, 1978)) (reprinted at App. 67); and Great Britain (Stat. Inst. 1980 No. 281) (reprinted at App. 70).
In other countries the courts have taken the initiative in adopting the SDR as the new unit of conversion. See, e. g., Kislinger v. Austrian Airtransport, No. 1 R 145/83 (Commercial Court of Appeals of Vienna, Austria June 21, 1983) (English translation in Brief for Petitioner TWA at BA12); Rendezvous-Boutique-Parfumerie Friedrich und Albine Breitinger GmbH v. Austrian Airlines, No. 14 R 11/83 (Court of Appeals of Linz, Austria June 17, 1983) (English translation in Brief of Petitioner TWA at BA22).
At least one court has relied instead on the last official price of gold. See Costell v. Iberia, Lineas Aereas de Espana, S. A., No. 255 (Court of Appeal of Valencia, Spain Oct. 16,1981) (English translation in Brief of Petitioner TWA at BA6).
32 See references cited supra, n. 27.
33 Excerpt From Warsaw Convention Conference Minutes, October 4-12, 1929, reprinted at App. 162 (remark of Mr. Rippert (France)).
34 For a hypothetical 44-pound lost suitcase the liability limit was $330 in 1934, $359 in 1972, and $400 in 1974. In terms of purchasing power, 330 dollars in 1934 were equivalent to $1031 in 1972 and $1215 in 1974. App. 48. Clearly, the $9.07 per pound liability limit does not represent the same value that was in effect when the United States adhered to the Convention.
35 On that date the official price of gold remained at $42.22 per ounce; the free market price of gold was about $182 per ounce. See The Wall Street Journal, 29 col.l (April 3, 1978).
36 Lowenfeld, A. , supra, at §6.51 at 7-169 (2d ed. 1981)Google Scholar.
37 It is note worthy that in the decade between 1968 and 1978 the free market price of gold rose as high as $200 per ounce, App. 24, yet the $42.22 official price of gold was uniformly accepted during that period as appropriate for converting the Convention's liability limit into dollars.
1 These fears were epitomized by the crash of the Hindenberg in 1937, though the Warsaw Convention's liability limitation could not save the dirigible— then a significant mode of international air transportation—from rapid extinction. See generally L. Ege, Balloons and Airships 176-221 (1973); D. Robinson, Giants in the Sky 250-315 (1973).
The liability limitation, it may be noted, was not limited to damages arising from special risks of an aircraft crash, nor did it fully protect carriers from those special risks. With respect to parties contracting with air carriers to ship goods, the Convention wrote with a broad brush: limiting liability as well for the kind of damage to goods that would be as likely to occur in any mode of transportation—such as the loss of a single item of cargo in connection with a safe flight. on the other hand, the Convention provided air carriers with no special protection whatsoever vis-a-vis third parties who might be injured by air crashes.
2 These units, it so happened, corresponded to the French franc as defined by a 1928 French statute. It was thus convenient to call them francs, and the Convention did so. That French statute, however, could have been repealed the day after the delegates adjourned their meeting, and it would not have affected the liability limitation. For the delegates had selected as the standard of value a commodity with a value independent of any one nation's control; indeed, a commodity perceived to have “intrinsic” value—a commodity individuals had valued before there were nations, and would value whether or not national governments made it an official medium of exchange.
3 Since the Convention was adhered to by the United States subsequent to the passage of this statute, presumably the Convention was an exception to this prohibition, unless we are to indulge the inference that Congress simultaneously abrogated and ratified the Convention. In any event, this statute has been repealed with respect to obligations incurred after October 27, 1977. 31 U. S. C. § 5118(d)(2). See 123 Cong. Rec. 33219-33220 (Oct. 11, 1977).
4 A staff memorandum addressed to the Civil Aeronautics Board on March 18, 1980 by the Chief, Policy Development Division, contains this telling comment on the background of the Warsaw liability limits and their contemporary relevance:
“The Warsaw Convention was negotiated during the late 1920's when the aviation industry was in its infancy. The minutes of the negotiations show that the primary concerns of the drafters are no longer of great importance to the industry. In addition, their assumptions about how the liability limitation mechanism would work were erroneous.
“In 1929, air travel was perceived by the public and, more importantly, by insurance companies to be an extremely risky mode of transportation. A major justification for limiting liability was that, unless carriers could present potential insurers with some degree of predictability in estimating damages from aircraft accidents, they would have great difficulty in obtaining coverage. Furthermore, the delegates had little sympathy for anyone foolish enough to board an airplane without enough personal insurance to provide for his widow (or her widower) and children should the plane crash. Over the years, air travel has become one of the safest modes of transportation, and airlines, even those operating under circumstances where they cannot limit their liability for death or personal injury, have no special difficulties finding insurers.
“The minutes also reflect the delegates' rationale for using gold as the unit of reference in determining carrier liability limits, instead of pegging the limits to some particular currency like the dollar or the franc, with no reference to the metal… .
“Warsaw has become an anachronism, yet various attempts to amend it have become stalled by the ratification process. While the Guatemala and Montreal Protocols would have revised the limits upward, the proposed limits were still relatively low, and none of the proposals contained a mechanism that would provide for periodical adjustments to compensate for inflation. Article 22 tied to gold, however, overcompensates for inflation to the point that the industry may view it as a sort of passengers' affirmative action plan that is supposed to make up for years of unreasonably low limits. Although gold-based limits may not be the most rational approach to allocating risks between carriers and consumers of international air transportation, the framers of Warsaw deliberately adopted this approach— expressly rejecting a dollar or some other currency-based system—and probably left us no flexibility as long as Warsaw remains in effect.” App. 49-51.
5 The majority asks why the CAB was “disqualified from setting a similar conversion rate one year after Congress stopped doing so.” Ante, at 11 n. 26 (emphasis supplied). So framed, the majority's question seems to answer itself. What the majority ignores is that the powers delegated to the CAB, 49 U. S. C. § 1502, previously quoted supra, must be exercised consistently with any convention in force, including the Warsaw Convention.
Although the Court makes a ritual of referring to the “CAB's choice” in its opinion (implying that it might not have made the same choice independently), ante, at 11,12,13,14,15, this is a suit between two private parties, not a declaratory judgment action challenging the CAB's exercise of its authority over tariffs. If it were, one would frame the question as whether the CAB has exercised its authority consistently with the Convention, though that is not how the majority frames the question presented at the outset of its opinion. Ante, at 1. In any event, the answer to that question, of course, turns on what the Convention means. on this matter, the CAB's views are not entitled to any special deference. While the Convention is a limitation on the CAB's powers, the CAB is not the governmental organ charged with enforcing the liability limitation—that responsibility rests with the courts of the United States. The Solicitor General correctly observes: “The Warsaw Convention is a self-executing treaty that provides a source of rules of decision applicable in United States courts without requiring enactment of any supplementary implementing legislation by Congress.” Br. for United States 16. Courts, not the CAB, render money judgments, and in rendering those money judgments, courts must apply the rules of decision provided by the Convention. Furthermore, even if some deference were to be accorded to the CAB's views, the CAB's position would have to be rejected since it conflicts the plain meaning of the Convention.
6 The Court does speak of intent at the close of its opinion. Ante, at 16. Its approach to ascertaining intent is novel, to say the least. It postulates the general “purposes” of the liability limitation. It then divines the effects of a gold-based liability in today's world. It finds the general purposes inconsistent with a gold-based limitation, and concludes that the Convention did not intend to adopt a gold-based limitation. The rather telling deficiency with this conclusion is that the Convention did adopt a gold-based limitation. The Court itself must recognize this defect, for it tells us that to achieve their purposes, “the Convention's framers chose an international, not a parochial, standard, free from the control of any one country.” Id., at 12 (footnote omitted). Inexplicably, however, the Court then proceeds to ignore the standard the Convention selected. It does rely upon the practice of the signatories between 1934 and 1978. Id., at 15. Our practice was consistent with the Convention so long as the price of gold was set by law. It is no longer. One commentator argued prior to the total demonitization of gold that the market price of gold should have been used in light of the economic reality of the early 1970's, see Heller, The Warsaw Convention and the “Two-Tier” Gold Market, 7 J. World Trade L. 126 (1973); Heller, The Value of the Gold Franc—A Different Point of View, 6 J. Mar. L & Com. 73 (1974). The response to that argument rested on the fact that the price of gold was set by law—a fact that no longer obtains. See Boehringer Mannheim Diagnostics v. Pan Am., 531 F. Supp. 344, 353 n. 46 (1981), appeal docketed, No. 81-2519 (CA5 Dec. 30, 1981).
The majority is correct in stating that I have no problem with the conclusion that our practice was consistent with the Convention when the price of gold was set by law. Ante, at 11, n. 26. We need not speculate on that score, for at the outset of the Warsaw proceedings the drafters performed the very kind of conversion they anticipated would occur when a national currency was based on the gold standard—they converted the sums expressed in gold francs in the draft proposal into equivalent sums of new French francs.
The Convention did not, of course, deprive a signatory sovereign nation of its control over its own currency. Indeed, it was a recognition of that authority which led the Swiss delegate to insist that a sum of gold—rather than a reference to the 1928 French statute—be specified in the Convention.
Congress has plenary power over our currency. See, e. g., The Legal Tender Cases, supra. In exercising that power, it may define the dollar in terms of gold. In doing so, and in periodically adjusting that relationship, it necessarily affects legal interests in many contractual areas.
See, e. g., Norman v. B. & O. R. Co., supra. For example, when Congress passed the Par Value Modification Act in 1972, setting a new price of gold, Congress “did not suggest that the CAB should thereafter use a different conversion factor” for Warsaw Convention purposes, but “the CAB did, of course, use that price to translate the Convention's gold-based liabilitly limit into dollars.” Ante, at 11. This was the only “flexible implementation”
of the treaty which occurred from 1934 to 1978. Ante, at 15. The CAB, of course, had no flexibility—air carriers were bound by the Convention, and bound by Congress' decisions on monetary policy, see, e. g., Norman v. B. & O. R. Co., supra. Congress has most recently exercised its authority over the currency by demonitizing gold completely. That has legal consquences as well. One of those consquences is that the rate of exchange between dollars and gold is no longer determined by law, and it is irrelevant that when Congress repealed the Par Value Modification Act it “did not suggest that the CAB should thereafter use a different conversion factor” for Warsaw Convention purposes. Congress has not delegated its authority over the currency to the CAB. and Congress clearly has not delegated authority to the CAB to violate Article 23 of the Convention—it has expressly stated that the CAB's authority must be exercised consistently with our treaty obligations. Congress itself, of course, does not have the authority to violate Article 23 short of repudiating the Convention. Congress naturally could repudiate the Convention and set its own liability limitation through domestic legislation, but has not done so.
“The Court might as well have selected a figure corresponding to the dollar value of 12 grams of gold in 1929, or 1934, as that existing in 1978. Indeed, if the Court fancies itself competent to decide the proper liability limit necessary to effect the “purposes” of the Convention, one wonders why it selects a figure which happens to correspond to a value of a given amount of gold at any point in time. Since it adopts such a freewheeling approach to the subject, the Court could, for example, compute the liability limit in the same basic manner as did the Convention—dividing the declared value of all air cargo by the tonnage, and then doubling that figure to arrive at a per pound limitation. Any fixed dollar figure lower than the actual damage figure, of course, would meet all of the purposes postulated by the Court as well as $9 per pound. But it appears that the Court will be willing to modify the limit it has set from time to time, for it states that its limit “might require periodic adjustment... to account both for the dollar's changing value relative to other western currencies and, if necessary, for changes in the conversion rates adopted by other Convention signatories.” Ante, at 12. The only reason the Court apparently does not make such an adjustment is that since 1978, “no substantial changes of either type have occurred.” Ibid. of course, if the standard adopted by the Convention were enforced, rather than ignored, no such adjustments would need to be made by courts—for as the Court candidly admits, “[s]ince gold is freely traded on an international market its price always provides a unique and internationally uniform conversion rate.” Id., at 14. The fact that gold has always had a uniform value—since, to use the words of the Swiss delegate, there is but one quality of gold—was, of course, a major reason why it was chosen as a standard of value in an international agreement setting an internationally enforceable limitation on liability.
8 Compare ante, at 9 (“[W]hen the parties to a treaty continue to assert its vitality a private person who finds the continued existence of the treaty inconvenient may not invoke the doctrine [of rebus sic stantibus] on their behalf.”).
9 The response of the framers to this assertion by the majority, I am quite sure, would be “au contraire.” Indeed, on the face of the majority opinion, only one of the purposes the Court identifies is not served by the gold standard—that of a stable and predictable limit. The other purposes, setting some limit, setting an internationally uniform limit, and linking the limit to a real value, are all achieved by the limit adopted by the Convention. In fact, the Court concedes the first purpose is served by any standard, ante, at 11, and seems to agree that the latter two purposes are better achieved by the limit adopted by the Convention, id., at 14-15. Hence, even if I were to adopt the freewheeling approach of the Court to the question before us—that is, an independent judicial determination of which of several “choices” would “best effect” the “different and to some extent contradictory” general “purposes” of the Convention—I would find the Court's “choice” unpersuasive.
Gold was selected because it would continue to be an internationally recognized standard of value, irrespective of what national governments did with respect to their currencies. It was also selected to guard against the fluctuating values of currencies. Gold continues to be an internationally recognized standard of value. The legacy of eons is not readily discarded. See generally I Report to Congress of the Commission on the Role of Gold in the Domestic and International Monetary Systems 98 (March 1982); M. Friedman & A. Schwartz, A Monetary History of the United States 473, 684 (1971). Its nominal value is still overwhelmingly its value in exchange, not its value in use—it is not simply another commodity. Fort Knox does not house any pork bellies. Currencies are worth far less in relation to gold than they were several years ago, that is, in perhaps bygone jargon, the currencies have been substantially devalued. The variation in the relative value of gold to currencies is not the kind of variation in value that the framers of the Convention wanted to avoid—it is one that they desired. Certainly, however, the extent of the current variation is more than they could have anticipated, and currencies have not devalued in overall purchasing power to the extent that they have in relation to gold. The Court, in support of the standard it has selected—the dollar—thinks that the relative value of various currencies has remained relatively stable in recent years (a conclusion one cannot reach based on the data relied upon by the majority). Even if that were true, all that would mean is that the currencies have not depreciated in relation to one another—it does not mean that the currencies have not devalued. The real value of those currencies has not been stable, it has been declining. The real value of gold has not been stable either, but it has not declined since 1929. The same manifestly cannot be said of the dollar.
The interests in stability and predictability, of course, do favor the Court's choice. But the fact that the market price of gold fluctuates on a daily basis does not seem to me to present particularly serious problems.
Indeed, the existence of a well recognized daily price provides a simple point of reference for computing the exact amount of the limit on the date of shipment. The calculation of insurance rates would have to take into account the variable character of the gold market, but that is hardly a matter that underwriters are incapable of evaluating realistically. and, of course, the problem of computing their contingent tort liability for cargo would remain less difficult than the problem they confront in computing their contingent tort liability to third-parties.
The idea that air transport users and carriers are forced to become unwilling speculators in the gold market is mere rhetoric. It stands history on its head even to suggest that the Warsaw Convention's liability limit has been foisted upon air carriers against their will. If, because of the demonitization of gold, the gold standard makes air carriers “speculators” in the gold market, and if the air carriers find this situation unacceptable, they can urge modification of the Convention. But, of course, they have already failed to secure Senate approval of the Montreal Protocols.
Today, their attorneys win the battle that their lobbyists lost.
10 Incredibly, the majority apparently derives some comfort from the fact that the liability limit it adopts is approximately equivalent in purchasing power to that contained in the Montreal Protocols, doing so in spite of the fact that the Montreal Protocols were rejected by the Senate. See ante, at 12-13. Indeed, the CAB accepts tariffs based on the Montreal Protocols, which passes by the majority without criticism. Id., at 13 n. 29.
11 For example, one law professor recently wrote in a doctrinaire fashion:
“Modern jurisprudence regards the distinction Marshall Court justices sought to make between the ‘will of the judge’ and the ‘will of the law’ as a distinction without a difference. The ‘legal’ decisions of judges are, in the modern consciousness, necessarily personal and creative.
“All of the modern canons for judicial behavior, and all of the modern theories of judicial performance, presuppose that judges 'make’ law and that judicial will and legal will are thus inseparable.” White, The Working Life of The Marshall Court, 1815-1835, 70 Va. L. Rev. 1, 49-50 (1984).
12 Judges, of course, must perform a lawmaking function, even in cases involving statutory construction. See, e. g., Pound, R. , The Spirit of the Common Law 170-175 (1921). But the limits of our authority and our ability to develop the law should always be respected. As Justice Cardozo explained:Google Scholar
“No doubt there is a field within which judicial judgment moves untrammeled by fixed principles. Obscurity of statute or of precedent or of customs or of morals, or collision between some or all of them, may leave the law unsettled, and cast a duty upon the courts to declare it retrospectively in the exercise of a power frankly legislative in function… . We must not let these occasional and relatively rare instances blind our eyes to the innumerable instances where there is neither obscurity nor collision nor opportunity for diverse judgment… . In countless litigations, the law is so clear that judges have no discretion. They have the right to legislate within gaps, but often there are no gaps. We shall have a false view of the landscape if we look at the waste spaces only, and refuse to see the acres already sown and fruitful. I think the difficulty has its origin, in the failure to distinguish between right and power, between the command embodied in a judgment and the jural principle to which the obedience of the judge is due. Judges have, of course, the power, though not the right, to ignore the mandate of a statute, and render judgment in despite of it. They have the power, though not the right, to travel beyond the walls of the interstices, the bounds set to judicial innovation by precedent and custom. None the less, by that abuse of power, they violate the law.” Cardozo, B., The Nature of the Judicial Process 128-129 (1921)Google Scholar.
13 Perhaps the majority would insist that it is merely deferring to the CAB's notions of wise policy. If so, this would mean that the CAB could have made another choice to which the majority would have deferred. But surely the majority would not countenance selection of the choice made by the Convention itself, for the majority believes that choice would fail to effect any of the Convention's purposes. Moreover, I cannot see how the majority could defer to a choice of the limit set forth in the Montreal protocols, given the fact that the Senate has recently rejected the Montreal protocols. But see supra, at n.— 10. Nor can one imagine the Court “deferring” to the CAB's judgment if it selected the value of the current French franc. In short, it seems rather clear that the only potential choice of the CAB to which the majority would “defer” is the one it selected.