Whittaker Corp. v. United Aircraft Corporation

• Citation: 482 F.2d 1079
• Decision Date: 23 July 1973
• Docket Number: No. 73-1095.,73-1095.
• Parties: WHITTAKER CORPORATION, Plaintiff-Appellant, v. UNITED AIRCRAFT CORPORATION et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

482 F.2d 1079 (1973)

WHITTAKER CORPORATION, Plaintiff-Appellant, v. UNITED AIRCRAFT CORPORATION et al., Defendants-Appellees.

No. 73-1095.

United States Court of Appeals, First Circuit.

Heard June 6, 1973.

Decided July 23, 1973.

William M. Simmons, Boston, Mass., with whom Vom Baur, Coburn, Simmons & Turtle, and Thomas J. Mizo, Boston, Mass., were on brief, for appellant.

Stephen A. Moore, Boston, Mass., with whom Michael G. Tracy, and Gaston, Snow, Motley & Holt, Boston, Mass., were on brief, for United Aircraft Corp. and Ladish Co., defendants-appellees.

Christian M. Hoffman, Boston, Mass., with whom Jerome Preston, Jr., John Leubsdorf, and Foley, Hoag & Eliot, Boston, Mass., were on brief, for Gulf and Western Industrial Products Co., defendant-appellee.

Before COFFIN, Chief Judge, and McENTEE and CAMPBELL, Circuit Judges.

McENTEE, Circuit Judge.

Plaintiff, Whittaker Corporation, incorporated and having its principal place of business in California and its Nuclear Metals Division in Massachusetts, initiated this action against defendants, United Aircraft Corporation, Gulf and Western Industrial Products Company, and Ladish Company (hereinafter United, Gulf, and Ladish) for alleged breach of contract and, as against United only, for alleged actionable deceit. United and Gulf are Delaware corporations which have their respective principal places of business in Connecticut and in a state other than California. Ladish is incorporated and has its principal place of business in Wisconsin. Jurisdiction was based on diversity of citizenship¹ and damages well in excess of $10,000 were alleged. Personal jurisdiction was sought under Fed.R.Civ.P. 4(d) (7) pursuant to the Massachusetts "long arm" statute, M.G.L.A. c. 223A § 3 (1973 Supp.), by serving each corporate defendant by registered mail. Defendants moved to vacate this service alleging that there was no basis for personal jurisdiction and also to dismiss the complaint for improper venue. After a brief hearing on affidavits, the trial court granted the motions to dismiss for lack of jurisdiction over the person. This appeal followed. For the reasons set forth below, we reverse as to United but affirm as to Ladish and Gulf.

The underlying facts are not in dispute. In 1963 Whittaker's Nuclear Metals Division, located in Concord, Massachusetts, developed a new procedure known as the Rotating Electrode Process (REP) for the manufacture of metal powder. In 1966 United began purchasing powders produced by this process from Whittaker. In September 1970, after receiving a government contract for the manufacture of jet aircraft engines, United ordered one log of IN 100 metal alloy to be produced by Whittaker using the REP procedure in accordance with its specifications. United informed Whittaker that this log would be tested to determine whether it could become a "qualified and approved" source of logs under the "GATORIZINGTM" process United was developing to fulfill its jet engine contract.² Thereafter Whittaker produced a number of additional test logs in order that it might become qualified to participate in this program. Although the parties' affidavits indicate that all of United's solicitations regarding Whittaker's participation in this program were made either in Florida or Connecticut, they also show that United personnel contacted Whittaker employees in Massachusetts by telephone, teletype, or mail on thirteen occasions and visited Whittaker's Massachusetts facility on four instances during this qualification period.

On or about March 1, 1971, United informed Whittaker that it had become a qualified source of IN 100 logs for use in the GATORIZINGTM process. As further conditions to qualification, however, Whittaker was required to sign "Vendor Agreements," in which it promised to make no changes in its source of alloy or its manufacturing process without United's approval, and a "Secrecy Agreement," under which it agreed to keep all other participants in the GATORIZINGTM procedure ignorant of the details of the work it performed. Again the parties' affidavits indicate that all of these agreements were made at United's facilities in either Florida or Connecticut.

Following Whittaker's qualification, United notified the turbine disc producers who were participating in the program that they could now use Whittaker as a log source. As a result, Whittaker received an oral order for 9,568 pounds of processed alloy from defendant Ladish on April 30, 1971, and, on May 13, 1971, a similar but larger order from defendant Gulf. On June 1, in spite of the fact that United had discovered a weakness in one of Whittaker's test logs and had sent Whittaker revised specifications in an attempt to overcome this defect, United employee LaGrace, while visiting Whittaker's Concord plant, urged Whittaker to proceed with its work on the Ladish and Gulf orders representing that United would not require strict compliance with design specifications. Based upon this representation, in July and August 1971 Whittaker entered into written agreements confirming the Ladish and Gulf oral orders and, in September, entered into a similar agreement for the production of additional logs for United. In the fall of 1971, however, the defendants rejected the logs Whittaker had produced under these agreements alleging that they failed to comply with contract specifications. Although not wholly unambiguous, the parties' affidavits reflect that while none of the defendants was either licensed to do business or had any offices or any agents either soliciting or engaged in any other business in Massachusetts, United's employees did make five visits and send sixteen documents and twenty teletype and telephone messages into the Commonwealth from the time of Whittaker's qualification to the rejection of the logs. During this same period the tally for Ladish was one visit, nine documents, and two phone calls and for Gulf three visits, seven documents, and nine teletype and telephonic messages.³

On this background Whittaker sought to obtain personal jurisdiction over all three defendants under § 3(a) and (b) of the Massachusetts long arm statute, M.G.L.A. c. 223A (1973 Supp.) and, additionally, over United under § 3(c).⁴ Specifically, Whittaker contended that the defendants were amenable to service of process under § 3(a) because the contacts set forth above indicated that they were all transacting business within Massachusetts and under § 3(b) because all of them had supplied design specifications to Whittaker to govern its performance of the contracts in question. Jurisdiction over United under § 3(c) was posited upon its allegedly deceitful representation that strict adherence to contract specifications would not be required. In the alternative, Whittaker sought discovery concerning these issues. The trial court, however, interpreting the most open-ended provision in the statute, § 3(a), concluded that the defendants' conduct "was not substantially different from the mere placing of orders in the commonwealth found insufficient" to support personal jurisdiction in the Supreme Judicial Court's recent decision in "Automatic" Sprinkler Corp. of America v. Seneca Foods Corp., 1972 Mass.Adv. Sheets 601, 280 N.E.2d 423 (1972), and granted the motions to dismiss.

On appeal Whittaker reasserts the contentions raised below. Turning first to the "transacting any business" section of the statute, § 3(a), the initial issue which must be resolved is whether, as a matter of state law, Massachusetts has "provided for bringing . . . foreign corporations into its courts under the circumstances of the case presented." Pulson v. American Rolling Mill Co., 170 F.2d 193, 194 (1st Cir. 1948). See Arrowsmith v. United Press International, 320 F.2d 219 (2d Cir. 1963). In the instant case, however, since § 3(a) has recently been construed "as an assertion of jurisdiction over the person to the limits allowed by the Constitution of the United States," "Automatic" Sprinkler Corp. of America v. Seneca Foods Corp., supra, 280 N.E.2d at 424, this question gives way to a second inquiry, namely whether the state's jurisdictional assertion offends the due process requirements of the fourteenth amendment. The parameters of this second inquiry are, of course, well settled. Where a foreign corporation has established "certain minimum contacts" with the forum so "that the maintenance of the suit would not offend `traditional notions of fair play and substantial justice,'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945), and has "purposely availed itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws," Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958), jurisdiction will be upheld. Within this constitutional framework a number of factors, including the nature and purpose of the contacts, the connection between the contacts and the cause of action, the number of contacts, the interest of the forum, and the convenience and fairness to the parties must be considered. See, e. g., Seymour v. Parke, Davis & Co., 423 F.2d 584, 586-587 (1st Cir. 1970); Aftanase v. Economy Baler Company, 343 F.2d 187, 197 (8th Cir. 1965).

In analyzing these criteria we note at the outset that we cannot subscribe to defendants' theory that the instant case is controlled by "Automatic" Sprinkler, supra, since, as we read the complaint and affidavits, it seems clear that defendants' contacts with Massachusetts were more substantial than those found in that case. In "Automatic" Sprinkler⁵ the defendant's only contact with the Commonwealth was its mailing of a purchase order and check in partial payment to plaintiff's division in Worcester and its receipt of a letter and invoice mailed from that location. This was held to be an insufficient basis to support long arm jurisdiction under § 3(a). In the case at...