In a 2-1 decision, the 2nd U.S. Circuit Court of Appeals ruled Wednesday that the 1996 crash eight miles off the coast of Long Island was not governed by the Death on the High Seas Act, which limits lawsuit damages.
The appeals court noted that President Reagan in 1988 extended the territorial sea of the United States from three miles to 12 miles offshore. The appeals court's ruling affirmed a 1998 decision.
The Boeing 747 exploded minutes into a flight from New York to Paris, falling in pieces to the Atlantic Ocean. All 230 people aboard were killed. The exact cause of the crash remains a mystery.
Families of the victims have sought millions from Boeing, TWA and Hydro-Aire Inc., which made the plane's fuel pumps. The plaintiffs claim the companies were negligent in the construction and operation of the plane. A trial in the case is set to begin next Feb. 1.
Steve Pounian, a lawyer for the families, said the ruling meant families would not be limited to damage awards of as little as $100,000 to $200,000 for "pecuniary losses" or those calculated from an estimate of future earnings and other factors.
Instead, they may be able to seek damages for the loss of the care, comfort and companionship of loved ones as well as the pain and suffering their loved ones went through when the plane exploded.
Boeing spokesman Russell Young said the company was studying the ruling and did not expect to quickly decide whether to appeal again.
"Regardless of where we go, we're continuing with an active defense of the airplane, its design and its operation," he said.
Julia Bishop, a TWA spokeswoman, said the airline would leave it to Boeing to decide whether to appeal "because it's more Boeing's issue than ours." A message left with a lawyer for Hydro-Aire was not returned.