Milestone Aviation Group v. DSV Air & Sea, Inc.

Background

Milestone entered into a transportation agreement with DSV to move a 2013 Sikorsky Model S92A helicopter from Rzeszow, Poland, to Lafayette, Louisiana. The planned route included truck transportation to Gothenburg, Sweden, ocean transportation to Brunswick, Georgia, and a final truck leg to Lafayette. DSV subcontracted the final leg to International Machine Transport USA.

After the helicopter reached Brunswick, it was loaded onto a flatbed truck accompanied by two escort vehicles. The lead escort vehicle had a pole intended to replicate the helicopter’s height. The truck later left the planned route because of a travel restriction affecting permitted trucks entering Baton Rouge. According to allegations accepted as true for this motion, the lead escort vehicle’s pole struck a bridge, but the lead escort vehicle continued toward a truck stop without ensuring that the truck driver knew about the insufficient clearance. The truck then proceeded under the bridge, and the helicopter struck it, causing substantial damage and rendering the helicopter a total constructive loss. The amended complaint alleged approximately $16 million in damages.

Milestone alleged three causes of action: breach of contract, negligence, and breach of bailment obligations. DSV moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not adequately state a claim for relief. DSV’s motion specifically sought dismissal of the negligence and bailment counts.

Economic-Loss Argument

DSV argued that the negligence and bailment claims were barred by New York’s economic-loss doctrine. The court explained that New York’s Court of Appeals had clarified that this rule applies in the products-liability context. Because Milestone did not assert a products-liability claim, the court held that the doctrine did not apply and denied DSV’s motion to dismiss Counts II and III on that ground.

DSV also briefly raised an argument concerning the prohibition on duplicative contract and tort claims in its reply brief. The court found that this argument was not adequately presented. DSV’s argument that the Federal Aviation Administration Authorization Act preempted the tort claims was raised only in footnotes and was not addressed. DSV’s argument that the Carriage of Goods by Sea Act preempted the negligence and bailment claims was raised for the first time in its reply. The court treated those arguments as forfeited and did not decide them. It noted that any limits the Carriage of Goods by Sea Act might place on liability or damages could be raised in a later summary-judgment motion or trial-related briefing.

Gross-Negligence Claim

DSV argued that Milestone had not pleaded facts supporting gross negligence. Under New York law, gross negligence requires allegations suggesting conduct that shows reckless indifference to the rights of others and is an extreme departure from ordinary care.

The court rejected DSV’s argument at the pleading stage. It considered the allegations that the truck driver deviated from the planned route to avoid a known travel restriction, that the route change created unnecessary risks in transporting the helicopter, that the lead escort vehicle’s pole struck the bridge, and that the lead escort vehicle allegedly continued without confirming that the truck driver received a warning. Taken together, the court held, these allegations plausibly suggested conscious disregard of an obvious danger and reckless indifference to the helicopter’s safety. The court therefore denied DSV’s motion to dismiss any gross-negligence claim.

Disposition

The court denied DSV’s motion to dismiss. DSV was ordered to answer the amended complaint by April 1, 2025. The court also ordered the parties to appear for an initial pretrial conference on April 16, 2025, and to submit a proposed case-management plan and scheduling order by April 9, 2025. Judge John P. Cronan directed the Clerk of Court to terminate the motion at Docket Number 23.