Alvarez v. Aircraft Modular Products, Inc.

• Decision Date: 08 November 1996
• Docket Number: Civ. No. 96-00418 ACK.
• Citation: 949 F.Supp. 1470
• Parties: Smile ALVAREZ, Plaintiff, v. AIRCRAFT MODULAR PRODUCTS, INC., Defendant.
• Court: Hawaii Supreme Court

Page 1470

949 F.Supp. 1470

Smile ALVAREZ, Plaintiff, v. AIRCRAFT MODULAR PRODUCTS, INC., Defendant.

Civ. No. 96-00418 ACK.

United States District Court, D. Hawai`i.

November 8, 1996.

COPYRIGHT MATERIAL OMITTED

Greg Heidler, Haleiwa, HI, for Plaintiff.

Anna H. Oshiro, Damon Key Bocken Leong & Kupchak, Honolulu, HI, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS AND DENYING DEFENDANT'S REQUEST FOR SANCTIONS

KAY, Chief Judge.

BACKGROUND

On May 3, 1996 Plaintiff Smile Alvarez ("Plaintiff") filed a Complaint against Defendant Aircraft Modular Products, Inc. ("Defendant"). Thereafter on July 16, 1996 Defendant filed the instant motion to dismiss for lack of personal jurisdiction. Plaintiff filed a timely opposition, to which Defendant filed a reply.

This matter came before the Court for hearing on October 15, 1996.

FACTS

Plaintiff is a flight attendant for Continental Airlines. On August 29, 1994 Plaintiff was injured by pushing a heavy duty-free storage cart into a "buffet unit" on a Continental aircraft where he was working at the time. The injury occurred over the Atlantic Ocean on a flight from Rome to Newark, on a plane which operated out of Newark.

Plaintiff brings this products liability suit against Defendant Aircraft Modular Products, Inc., the manufacturer of the buffet unit which injured Plaintiff. Defendant, a Florida corporation, contracted with Continental Airlines in 1990-1991 to provide Continental with these buffet units for use on some of its airplanes. The negotiations were conducted in Texas and Florida. At the time of the contract Continental allegedly operated a base out of Hawai`i. Plaintiff asserts the purpose of contracting for the buffet units was to increase the quality and volume of Continental's flights through Hawai`i. At the time of the contract Plaintiff was based in Hawaii, although in 1993 Continental closed its Hawai`i base and Plaintiff relocated to the mainland. Plaintiff now lives in Texas and was based in Newark at the time of the injury.

STANDARD OF REVIEW

Plaintiff bears the burden of establishing that the Court has personal jurisdiction. Federal Deposit Ins. Corp. v. British-American Ins. Co., Ltd., 828 F.2d 1439, 1441 (9th Cir.1987), citing Fields v. Sedgwick Associated Risks, Ltd., 796 F.2d 299, 301 (9th Cir.1986). When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff is "obligated to come forward with facts, by affidavit or otherwise, supporting personal jurisdiction." Amba Marketing Systems, Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir.1977); Scott v. Breeland, 792 F.2d 925, 927 (9th Cir.1986). Where the trial court's ruling is based solely upon a review of affidavits and discovery materials, dismissal is appropriate only if the plaintiff fails to make a prima facie showing of personal jurisdiction. Shute v. Carnival Cruise Lines, 897 F.2d 377, 379 (9th Cir.1988), rev'd on other grounds (forum selection clause), 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991).

DISCUSSION

The Defendant corporation brings this motion to dismiss on grounds that the Court lacks personal jurisdiction over it. Defendant is a Florida corporation with its principal place of business in Florida.

The exercise of personal jurisdiction over a defendant must comport with statutory authority and the constitutional strictures of due process. Where there is no governing federal statute which confers personal jurisdiction over the defendant, the district court must apply the long-arm statute of the state in which the court sits. Terracom v. Valley Nat'l Bank, 49 F.3d 555, 559 (9th Cir.1995); Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1484 (9th Cir.1993). Where the state's long-arm statute allows the exercise of jurisdiction to the full extent permitted by the due process clause, the statutory and constitutional analyses merge and the court need only address whether due process permits the exercise of personal jurisdiction. Terracom, 49 F.3d at 559. Hawai`i's long-arm statute allows the exercise of jurisdiction to the full extent permitted by due process under the constitution. Cowan v. First Ins. Co., 61 Haw. 644, 608 P.2d 394 (1980). Therefore the only issue is the due process inquiry.

Under the due process clause federal courts may exercise either "general" or "specific" personal jurisdiction over defendants. General jurisdiction exists where the defendant has such "systematic and continuous" contacts with the forum that the defendant may be haled into court there even if the suit is unrelated to the defendant's contacts with the state. In the case at bar Plaintiff does not contend that the Court has general jurisdiction over Defendant.

The sole inquiry thus is whether the Court can properly exercise "specific" jurisdiction. Specific jurisdiction may exist when "`the cause of action arises out of or is related to the defendant's forum activities.'" Terracom, 49 F.3d at 560 (quoting Hirsch v. Blue Cross, Blue Shield, 800 F.2d 1474, 1477 (9th Cir.1986)). The Ninth Circuit applies a three-part test to determine whether specific jurisdiction comports with due process:

(1) the defendant purposefully availed himself of the forum,

(2) the claim arose out of the defendant's forum-related activities, and

(3) the exercise of personal jurisdiction is reasonable.

Id. at 560; Shute v. Carnival Cruise Lines, 897 F.2d 377, 381 (9th Cir.1990), rev'd on other grounds (forum selection clause), 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991).

Previously the Ninth Circuit required that all three prongs be met, but the Ninth Circuit now acknowledges that it has since "adopted a more flexible approach." Brand v. Menlove Dodge, 796 F.2d 1070, 1074 (9th Cir.1986); Haisten, 784 F.2d at 1397. On one end of the spectrum, where purposeful availment has clearly been shown the reasonableness prong is presumed to have been satisfied. Brand, 796 F.2d at 1074; Haisten, 784 F.2d at 1397 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-79, 105 S.Ct. 2174, 2184-85, 85 L.Ed.2d 528 (1985)). In such instances the defendant bears the burden of overcoming this presumption "by presenting a compelling case that jurisdiction would be unreasonable." Id. However where there is a lesser showing of purposeful availment, or indeed where "the defendant has not directed its activities toward the forum state," the Ninth Circuit holds that it does not offend due process to exercise personal jurisdiction where doing so is otherwise reasonable. Brand, 796 F.2d at 1074. Specifically, "personal jurisdiction may be established on a lesser showing of minimum contacts with the state `if considerations of reasonableness dictate.'" Id. at 1075 (quoting Haisten, 784 F.2d at 1397).

1. Purposeful Availment

The purposeful availment prong is described as some act through which the defendant "purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws." Terracom at 560 (quoting Shute, 897 F.2d at 381). In World-Wide Volkswagen v. Woodson the Supreme Court stated that mere foreseeability of injury in the forum state is an insufficient basis on which to premise personal jurisdiction. World-Wide Volkswagen v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). For example where injury is conceivably foreseeable but where injury in the forum state occurs by mere "fortuitous circumstance" through no conduct of the defendant, purposeful availment is not satisfied. Id. World Wide Volkswagen involved an auto dealer who sold a car in New York which by happenstance was later involved in a car accident in Oklahoma while the buyers (who were New York residents when they purchased the car) were driving across that state. The Supreme Court ruled that the dealer had not directed any activities towards the forum state of Oklahoma and therefore Oklahoma lacked personal jurisdiction over the dealer. In that same opinion, however, the Supreme Court stated that jurisdiction is proper where a manufacturer or distributor has placed goods into the stream of commerce knowing and intending for them to be ultimately purchased by consumers in the forum state:

[I]f the sale of a product of a manufacturer or distributor ... is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State.

Id. at 297-98, 100 S.Ct. at 567 (emphasis added). The Ninth Circuit interprets World-Wide Volkswagen to hold that purposeful availment is satisfied where a distributor "has engaged in affirmative conduct to deliver its product in [the forum state]." Plant Food Co-op v. Wolfkill Feed & Fertilizer, 633 F.2d 155, 159 (9th Cir.1980), cited in Brand, 796 F.2d at 1074.

In the tort context, where unlike the distribution context the defendant might not target consumers per se in the forum, the Supreme Court holds that intending effects in the forum can serve the basis for personal jurisdiction. Calder v. Jones, 465 U.S. 783, 787-89, 104 S.Ct. 1482, 1486-87, 79 L.Ed.2d 804 (1984). In Calder personal jurisdiction was proper over a reporter and an editor of the National Enquirer magazine. The magazine published an article which featured California as the focal point and as a result the brunt of potential harm would be suffered in California. The defendants argued that they had no economic stake in distribution of the magazine to California. In support of this the defendants analogized their...