US Airways Flight 735 from Philadelphia to Orlando encountered turbulence as it passed through 17,000 feet. Three passengers and two flight attendants were injured so badly that they were hospitalized when the plane returned for landing in Philadelphia.
What is the Airline's obligation to compensate the injured? The answer varies.
Passengers who were traveling on Flight 735 as part of an international flight:
If a passenger originated outside the US, or was ticketed to continue on from Orlando to a foreign destination, the Montreal Convention applies to that particular passenger’s claim. The Montreal Convention makes the airline liable for any injuries suffered on board the aircraft due to an "accident." The definition of "accident" includes an encounter with severe turbulence. The passenger need not prove that the airline was at fault for the accident. Under the Convention, the airline is automatically liable.
As discussed here, the Convention also entitles the passengers who suffered a physical injury to be compensated for the emotional distress they suffered as well.
Passengers who were traveling domestically:
To obtain compensation for his injuries, the domestic passenger needs to prove that his injuries were due to the airline's negligence. For example, the domestic passengers might need to prove that the flight crew could have reasonably avoided the turbulence but didn't. That will be difficult -- apparently nothing more than light turbulence was reported in the area.
The injured cabin crew cannot sue their employer due to workers compensation laws. They may be able to proceed against others responsible for the encounter, such as the weather reporting agency used by the airline. In appropriate circumstances, the crew members can also sue the United States government if Air Traffic Control should have advised the flight of the upcoming turbulence. Again, however, reports are that there is no reason to believe the turbulence could have been foreseen.