Swissair has gone to court to find out if a U.S. law on "high seas" prevents the families of people killed in a crash near Nova Scotia from seeking compensation for pain and suffering.
The company's lawyers asked a federal judge in Philadelphia, Monday, to decide if the relatives are entitled to punitive damages.
Right now, the families are negotiating a possible legal settlement with the airline.
Swissair is offering about $300 million. But many of the victims' families don't like the deal because it would stop them from trying to get another $1 billion in punitive damages.
A U.S. law called the Death on the High Seas Act is at the heart of the case.
The legislation permits compensatory damages, or real losses, associated with lost income and medical costs after an accident. But it does not permit punitive damages.
The act, which Congress passed in 1920, does not define the term "high seas."
Swissair flight 111 crashed within the territorial waters of Canada in September of 1998.
All 229 people on board the flight from New York to Geneva were killed.
The cause of the crash is still under investigation.