Bell Helicopter Textron, Inc. v. Heliqwest Intern.

• Decision Date: 07 October 2004
• Docket Number: No. 03-4115.,03-4115.
• Citation: 385 F.3d 1291
• Parties: BELL HELICOPTER TEXTRON, INC., Plaintiff-Appellant, v. HELIQWEST INTERNATIONAL, LTD.; Copter Lease, LLC, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

385 F.3d 1291

BELL HELICOPTER TEXTRON, INC., Plaintiff-Appellant, v. HELIQWEST INTERNATIONAL, LTD.; Copter Lease, LLC, Defendants-Appellees.

No. 03-4115.

United States Court of Appeals, Tenth Circuit.

October 7, 2004.

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Appeal from the United States District Court for the District of Utah, Brian T. Stewart, J.

Phillip S. Ferguson, Christensen & Jensen, PC., Salt Lake City, UT, for the Plaintiff-Appellant.

Stephen R. Stegich, Condon & Forsyth, New York, N.Y. (Carol Clawson, Clawson Burgess, Salt Lake City, UT with him on the briefs) for the Defendants-Appellees.

Before HENRY, BRISCOE, and McCONNELL, Circuit Judges.

McCONNELL, Circuit Judge.

On January 9, 2000 the main rotor mast on a Bell Model 212 Helicopter fractured in-flight and separated from the blade assembly and main rotor hub. The helicopter, which was conducting heli-logging operations near Mt. Pleasant, Utah, plummeted immediately to the ground and was completely destroyed. The thicket of manufacturers, owners, lessors, lessees, corporate parents, subsidiaries, and insurers with interests in the subject helicopter led to litigation both in Utah, the site of the crash, and in Alberta, Canada where some of the relevant parties are citizens. Given the large number of actors with ties to the helicopter it is unsurprising that there are questions about whether the Utah long-arm statute permits personal jurisdiction over Copter Lease, LLC, ("Copter Lease") a party to the Utah action. Whether there is personal jurisdiction over Copter Lease in Utah determines, in large measure, the propriety of jurisdiction over appellant Bell Helicopter's declaratory judgment action. Because we find that Copter Lease is not subject to personal jurisdiction in Utah we also find that the district court did not abuse its discretion in declining jurisdiction over the declaratory judgment action. Accordingly, we AFFIRM the judgment of the district court.

BACKGROUND

Appellant Bell Helicopter manufactured the Bell Model 212 helicopter in Fort Worth, Texas in October, 1974 for the Peruvian Air Force. The helicopter was destroyed in service in 1976. Max Sonnenberg of New Mexico obtained the salvage and rebuilt the helicopter. The rotor mast that led to the accident near Mt. Pleasant, which was not an original part, was manufactured by Textool, Inc., of Houston, Texas, sometime prior to 1978. It was installed on the helicopter in 1993. Ownership of the helicopter changed hands multiple times. Non-party Eagle Copters, a company incorporated under the laws of Alberta, Canada, purchased the helicopter at a receivership sale in Canada sometime in 1993. The company intended to use or lease it for timber salvage operations on national forest land in the United States. The United States Forest Service requires its contractors to have a U.S. registration number. In February, 1999, Eagle Copters transferred an interest in the helicopter to its corporate affiliate Copter Lease, a New Mexico corporation and a defendant in this action. Copter Lease then acquired FAA registration No. N212HQ. While the exact nature of the relationship between Copter Lease and Eagle Copters is unclear, the district court found that Copter Lease owned the helicopter "in trust for the benefit of" Eagle Copters. Op. 2. Copter Lease took possession in February, 1999.

Copter Lease then leased the helicopter to defendant HeliQwest International ("HeliQwest"), an unaffiliated company incorporated under the laws of Washington State. The "directing mind" of HeliQwest is non-party HeliQwest Aviation, Inc., a company incorporated under the laws of Alberta, Canada. An affidavit by Copter Lease's sole employee states that Copter Lease and HeliQwest negotiated the lease in Canada, Aplt.App. 29 § 7. The lease contains an Alberta choice of law provision and forum selection clause. Op. 3. Copter Lease agreed to deliver the helicopter to HeliQwest at Calgary International Airport, and HeliQwest agreed to return the helicopter to Copter Lease at the same place, when the lease terminated. Id. The accident occurred while the helicopter was leased to HeliQwest.

On January 9, 2000, the helicopter crashed near Mt. Pleasant, Utah, and was completely destroyed. On or about November 16, 2001, Eagle Copters, HeliQwest Aviation, HeliQwest, and Copter Lease filed an action in Alberta against Bell Helicopter and two of its subsidiaries, based on theories of negligence and breach of contract. They sought damages for the loss of the helicopter and other damages. On or about December 3, 2001, Bell Helicopter filed a complaint in the U.S. District Court for the District of Utah against Copter Lease and HeliQwest, seeking a declaratory judgment concerning the applicability of the General Aviation Revitalization Act ("GARA"), 49 U.S.C. § 40101, to the accident. Copter Lease moved to dismiss for lack of personal jurisdiction and HeliQwest moved to dismiss for lack of subject matter jurisdiction.

The district court granted Copter Lease's motion to dismiss. The court found that because Copter Lease did not transact business in Utah, did not contract to supply goods or services in Utah, and had no office or officers in Utah, there were not sufficient minimum contacts with Utah to come within the reach of the Utah long-arm statute. Op. 8. As a consequence, the court held that it would violate federal due process to exercise personal jurisdiction over Copter Lease. Op. 9. The district court treated HeliQwest's motion to dismiss for lack of subject matter jurisdiction as a request to decline jurisdiction over Bell Helicopter's request for a declaratory judgment. The court applied the test for deciding whether to hear declaratory actions developed in State Farm Fire & Cas. Co. v. Mhoon, 31 F.3d 979, 983 (10th Cir.1994). The district court found that the four factors relevant in this case weighed in favor of HeliQwest, and accordingly declined to exercise jurisdiction over the declaratory judgment. Op. 12. Bell Helicopter filed a timely notice of appeal on both orders.

ANALYSIS

1. Personal Jurisdiction over Copter Lease.

To satisfy the constitutional requirement of due process there must be "minimum contacts" between the defendant and the forum state. World-Wide Volkswagen Co. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). In the context of products liability the minimum contacts requirement turns, in some measure, on foreseeability. The Supreme Court has explained that "the foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State [but] that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." Id. at 297, 100 S.Ct. 559. The burden of establishing personal jurisdiction over the defendant is on the plaintiff. Kuenzle v. HTM Sport-Und Freizeitgerate AG, 102 F.3d 453, 456 (10th Cir.1996) (quoting Behagen v. Amateur Basketball Ass'n of the United States, 744 F.2d 731, 733 (10th Cir.1984), cert. denied, 471 U.S. 1010, 105 S.Ct. 1879, 85 L.Ed.2d 171 (1985)). When the evidence presented on the motion to dismiss consists of affidavits and other written materials the plaintiff need only make a prima facie showing. Id. (quoting Behagen, 744 F.2d at 733). The district court must resolve all factual disputes in favor of the plaintiff. Far West Capital, Inc. v. Towne, 46 F.3d 1071, 1075 (10th Cir.1995). This Court reviews the district court's ruling on personal jurisdiction de novo. Id.

The "minimum contacts" standard may be met in either of two ways. When the defendant has "continuous and systematic general business contacts" with the forum state, courts in that state may exercise general jurisdiction over the defendant. Helicopteros Nacionales de Colombia, S.A., v. Hall, 466 U.S. 408, 414-15, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); Kuenzle, 102 F.3d at 455. When the "defendant has `purposely directed' his activities at residents of the forum," courts in that state may exercise specific jurisdiction in cases that "`arise out of or relate to' those activities." Burger King v. Rudzewicz, 471 U.S. 462, 472-73, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (citations omitted); Kuenzle, 102 F.3d at 455. In this case, Plaintiff Bell Helicopter asserts specific, not general, jurisdiction over Copter Lease.

To support specific jurisdiction, there must be "some act by which the defendant purposefully avails 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, 2 L.Ed.2d 1283 (1958) (citation omitted); see also Fidelity and Cas. Co. of N.Y. v. Phila. Resins Corp., 766 F.2d 440, 445 (10th Cir.1985).¹ This requirement of "purposeful availment" for purposes of specific jurisdiction precludes personal jurisdiction as the result of "random, fortuitous, or attenuated contacts." Burger King, 471 U.S. at 475, 105 S.Ct. 2174 (citations and internal quotation marks omitted).

The Utah long-arm statute authorizes the exercise of specific jurisdiction over:

Any person ... whether or not a citizen or resident of this state, who in person or through an agent does any of the following enumerated acts, submits himself ... to the jurisdiction of the courts of this state as to any claim arising out of or related to: ... (2) contracting to supply services or goods in this state.

Utah Code Ann. § 78-27-24. Utah law also provides that the specific jurisdiction statute "should be applied so as to assert jurisdiction over nonresident defendants to the fullest extent permitted by the due process clause of the Fourteenth Amendment to the United States Constitution." Id. § 78-27-22.

Generally speaking, specific jurisdiction must be based on...