Court of Appeals Affirms FNC Dismissal of MH370 Litigation

Published 14 January 2020 by Condon & Forsyth LLP

On January 10, 2020, the U.S. Court of Appeals for the D.C. Circuit affirmed the dismissal of U.S. litigation arising out of the March 8, 2014 disappearance of Malaysia Airlines Flight MH370.1 The MH370 litigation, which encompassed 40 separate actions that had been consolidated by the Judicial Panel on Multidistrict litigation, had been dismissed on forum non-conveniens (“FNC”) grounds by U.S. District Court Judge Ketanji Brown Jackson on November 21, 2018.

In its opinion, the Court of Appeals reiterated the test for dismissing an action on FNC grounds: the moving party must show “(1) that an adequate alternative forum is available to hear the dispute, and (2) if so, that the balance of certain public and private interest factors strongly counsels in favour of trying the dispute in the alternative forum.”2  Acknowledging the District Court’s broad discretion in applying this test, the Court of Appeals ruled that the District Court “did not abuse its discretion when it concluded that Malaysia is an adequate, available forum for appellants’ Montreal Convention and state law products liability and wrongful death claims.”3

Flight MH370

Flight MH370 disappeared en route from Kuala Lumpur International Airport in Malaysia to Beijing, China, early in the morning on March 8, 2014.  Onboard were 227 passengers and 12 Malaysian crew members. The 227 passengers were of 14 nationalities, including 152 Chinese citizens, 38 Malaysian citizens, and 3 U.S. citizens.  A massive international search and rescue effort was launched, but neither the plane nor any survivors were ever recovered.  On January 28, 2015, the Malaysian Department of Civil Aviation announced that all aboard Flight MH370 were presumed dead.

Adequacy of the Forum

Certain appellants challenged the District Court’s finding that Malaysia was an adequate alternative forum, arguing that legislation enacted by the Malaysian government after Flight MH370’s disappearance effectively barred plaintiffs from recovering damages from Malaysia Airlines Systems Berhad (“MAS”), the national carrier of Malaysia that operated Flight MH370.

The legislation, the Malaysian Airline System Berhad (Administration) Act 2015 (“Act 765”), created Malaysia Airlines Berhad (“MAB”), which replaced MAS as Malaysia’s national carrier; transferred MAS’s assets to MAB; and placed MAS under administration.  Under the explicit terms of Act 765, MAB is not a successor corporation to MAS and did not assume any of MAS’s liabilities related to Flight MH370.

The appellants argued that, by enacting Act 765 and failing to designate MAB as the successor entity to MAS, the Malaysian government made it impossible for plaintiffs to collect and enforce a judgment against MAS and/or MAB under Malaysian law.  The Court of Appeals rejected this argument, reasoning that “MAS appears to have an insurance policy that would apply to appellants’ Montreal Convention claims—and even assuming Act 765 did render MAS judgment proof, a U.S. forum would not provide any greater likelihood of redress.”4 The Court of Appeals also rejected appellants’ argument that Malaysian law provided for inadequate damages recovery.  It held that “‘a foreign forum is not inadequate merely because it has less favourable substantive law.’”5  Rather, “[w]here, as here, it appears undisputed that an alternative forum would provide a plaintiff at least some remedy,” the District Court acted within its discretion by finding that Malaysia was an adequate alternative forum to the U.S.6

Public and Private Interest Factors

The Court of Appeals also affirmed the District Court’s weighing of the relevant FNC public and private interest factors, finding that, on balance, the factors “weigh heavily in favour of trying appellants’ cases in Malaysia.”7  The Court of Appeals agreed with the District Court that “Malaysia’s public interest in hearing claims arising out of Flight MH370’s disappearance far outweighs that of the United States, even as to the tort claims asserted against U.S.-based manufacturer Boeing” and that the private interest factors “tilt strongly in favour of trying these cases in Malaysia, given the overwhelming amount of evidence and witnesses located in Malaysia and the potentially insurmountable challenges that would arise from attempting to make that evidence available in a United States court.”8

In affirming the District Court’s balancing test, the Court of Appeals rejected the foreign appellants’ argument that the District Court failed to give any deference to their choice of forum.  Reviewing the District Court’s lengthy opinion, the Court of Appeals found that “the district court’s analysis reflected a careful consideration of the foreign appellants’ interests in trying these cases in the United States and a thoughtful balancing of the public and private interest factors with respect to those individuals specifically.”

With respect to the appellants’ argument that the District Court erred in refusing to decide the issue of MAS’s and MAB’s foreign sovereign immunity before dismissing the case on FNC grounds, the Court of Appeals ruled that district courts are not required to “conclusively determine whether a defendant enjoys sovereign immunity before considering immunity as a relevant factor in its forum non-conveniens analysis.”9  The Court further explained that “it was entirely proper for the district court to recognize that serious jurisdictional questions exist and weigh that as a factor in favour of dismissal.”10

The Court of Appeals’ decision reflects the broad discretion that U.S. district courts are afforded in deciding motions to dismiss on FNC grounds. While the District Court’s decision in the MH370 litigation was lengthy and “well-reasoned,” the Court of Appeals took care to emphasize throughout its opinion the “narrow” abuse of discretion standard that governs an appeal of a district court’s FNC analysis.  The District Court’s decision further bolsters the FNC doctrine as strong grounds to seek dismissal of U.S. litigation arising from a foreign aviation accident, particularly with respect to the individual MH370 actions that involved both U.S. passengers and U.S.-based defendant Boeing.  That being said, the unique circumstances surrounding the disappearance of Flight MH370 arguably distinguish this FNC dismissal of the MH370 litigation from other U.S. litigation arising out of foreign aviation accidents.


Disclaimer: This publication is made available for educational purposes only and is not intended as legal advice. If you have questions about any matters in this publication, please contact the authors directly.  General inquiries may be directed to info@condonlaw.com.

1 In re: Air Crash Over the Southern Indian Ocean on March 8, 2014, No. 18-7193 (D.C. Cir. Jan. 10, 2020).
2 Id. at 6 (citing Agudas Chasidei Chabad of U.S. v. Russian Fed’n, 528 F.3d 934, 950 (D.C. Cir. 2008)).
3 Id.
4 Id. at 7.
5 Id. at 7 (quoting Agudas Chasidei Chabad, 528 F.3d at 950).
6 Id. at 7-8.
7 Id. at 8.
8 Id. at 9.
9 Id. at 11.
10 Id. at 12.