(CN) – A federal judge in Los Angeles sent back to state court a dispute between a law firm and two passengers of a Pan Am flight hijacked by Libyan terrorists in 1986.
Gargi and Giatri Davé were aboard Pan Am Flight 73 on Sept. 5, 186 when it was hijacked by Libyan terrorists. When Pakistani stormed the plane, the hijackers turned their guns on the 380 passengers, killing 20 and injuring 120 before they were taken into custody.
Crowell & Moring formed the Pan Am Flight 73 Liaison Group in 2005 to sue the Libyans on behalf of hijacking victims, including the Daves.
The Davés joined a group of 186 passengers who agreed to let Crowell & Moring litigate their claims for a percentage of any amount won.
Before Crowell & Moring could secure an award, the United States and Libya entered a bilateral agreement to settle all terrorism-related claims. As a result, Crowell & Moring and the liaison group had to dismiss the Pan Am lawsuit.
Meanwhile, Gargi Davé was awarded $3 million by the Federal Settlement Claims Commission for her injuries from the hijacking.
Crowell & Moring told her to deposit the money in an escrow account to be distributed according to their original agreement that the firm would get a cut of any judgments or settlements.
The Davés refused and filed a pre-emptive lawsuit in Los Angeles Superior Court, seeking a declaration that the firm was not entitled to any portion of the money, because it played no role in the settlement. They also sued for breach of contract, interference with contract and interference with prospective economic advantage.
The law firm removed the case to federal court based on the Davés’ federal defenses, which they offered to counter any breach-of-contract counterclaims that the firm might raise.
U.S. District Judge Gary Allen Feess said the type of case filed by the Davés – an action seeking a court declaration – “plainly arises under state law” and must be decided by a state court.
The three remaining claims “fall outside this court’s federal question jurisdiction,” Feess ruled.
He granted the Davés’ motion to remand and sent the case back to California courts.