Ciprari v. Servicos Aereos Cruzeiro do Sul, SA (Cruzeiro)

• Citation: 232 F. Supp. 433
• Parties: Angelo P. CIPRARI, Plaintiff, v. SERVICOS AEREOS CRUZEIRO do SUL, S.A. (CRUZEIRO), Defendant.
• Decision Date: 23 July 1964
• Court: U.S. District Court — Southern District of New York

232 F. Supp. 433

Angelo P. CIPRARI, Plaintiff, v. SERVICOS AEREOS CRUZEIRO do SUL, S.A. (CRUZEIRO), Defendant.

United States District Court S. D. New York.

July 23, 1964.

Kreindler & Kreindler, New York City, by Milton G. Sincoff, Jack L. Kroner, Gerald A. Robbie, New York City, of counsel, for plaintiff.

Debovoise, Plimpton, Lyons & Gates, by Samuel E. Gates, Robert B. von Mehren, Robert L. King, New York City, of counsel, for defendant.

EDELSTEIN, District Judge.

Plaintiff Angelo Ciprari, a United States citizen, and a resident of New York, has brought this action for personal injuries against Servicos Aereos Cruzeiro do Sul, S.A., ("Cruzeiro"). On January 15, 1963, plaintiff was a passenger for hire aboard defendant's airplane on a trip from Rio de Janeiro, Brazil, to Sao Paulo, Brazil. The aircraft crashed near Sao Paulo and plaintiff was injured. Defendant Cruzeiro is a foreign air carrier organized and existing under the laws of Brazil. The complaint was filed on August 30, 1963, and service was made on September 11, 1963. Jurisdiction is founded upon diversity of citizenship of the parties. Defendant now moves to dismiss the action or to quash the service of the summons on the ground that Cruzeiro is not "doing business" in New York so that this court lacks jurisdiction over its person, Fed.R. Civ.P. 12(b)(2), or in the alternative, to dismiss the action pursuant to the court's inherent power, on the ground of forum non conveniens.

Arrowsmith v. United Press Int'l., 320 F.2d 219 (2d Cir. 1963) has now settled the proposition that the question of whether a foreign corporation is "doing business" so as to be amenable to suit in a Federal court, where jurisdiction is based upon diversity of citizenship, is governed by the law of the state where the court sits. See also Cook v. Bostitch, 328 F.2d 1 (2d Cir. 1964). But while this court must look to the law of New York State to determine whether Cruzeiro would be subject to its jurisdiction under New York's applicable standards, the inquiry does not end there. For if Cruzeiro's activities are such as to render it amenable to service of process under New York law, then the court must determine whether the exercise of in personam jurisdiction would contravene the Fourteenth Amendment's guaranty of due process. "Due process requires only that in order to subject a defendant to a judgment in personam * * * he have certain minimum contacts with the forum such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.' * * * Those demands of Due Process may be met by such contacts of the corporation with the state of the forum as make it reasonable, in the context of our federal system of government, to require the corporation to defend the particular suit which is brought there." International Shoe Co. v. Washington, 326 U.S. 310, 316-317, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945).

Cruzeiro contends that its contacts with the State of New York are insufficient to sustain in personam jurisdiction over it since it is a foreign corporation whose main and only business is selling and providing air transportation within Brazil and from Brazil to five South American countries. The defendant asserts that it is not conducting "some substantial part of its main business" in New York since its activity is limited to purchases of spare parts and supplies which are but incidental to its business of air transportation. Cruzeiro argues further that assuming arguendo that its activities in New York fall within New York's "doing business" criteria, the exercise of this court's jurisdiction over Cruzeiro would constitute a violation of due process because it would amount to maintaining jurisdiction over a corporation which does not have sufficient minimal contacts with New York to make maintenance of the suit here reasonable.

Its final contention is that this court should exercise its inherent power and dismiss the action on the ground of forum non conveniens since in weighing the balance of conveniences the scales tip heavily in its favor. Cruzeiro points out that if the court retains the action it will have to grapple with the interpretation of the concept of "Dolus,"¹ a legal concept which is sui generis to Civil Law countries. Cruzeiro also urges that the unavailability of compulsory process to compel the attendance of witnesses here, the appropriateness of a view of the premises, the relative ease of access to sources of proof in Brazil, among other hardships detailed below, all indicate that this court should decline jurisdiction, dismiss the action, and remit the plaintiff to the Brazilian courts.

The following undisputed facts concerning Cruzeiro's New York activities appear from the parties' affidavits: Cruzeiro's principal office is in Rio de Janeiro, Brazil. Cruzeiro is now and for many years has been engaged solely in the carriage by aircraft of persons, property and mail to and from points within Brazil and other South American points. It has not operated flights to the United States for the past ten years. Its air fleet consists of fifty aircraft, 46 of which are of American manufacture while the remaining four are of French manufacture. Cruzeiro does not have ticket offices in the United States. None of its ticket stock is found in the United States. Cruzeiro is, however, a party to the International Air Transportation Association, (IATA), Interline Traffic Agreement. Pursuant to this agreement, members of IATA, who are the major international air carriers, are authorized to issue their own tickets or other travel documentation for the transportation of persons and property over the routes of Cruzeiro. An IATA Interline Agreement is an undertaking by a carrier to honor tickets issued on the stock of other participating airlines for passage on their own flights. The connecting airline, in this case Cruzeiro, collects that portion of the fare owed it through a clearing house operated by the IATA. Pan American World Airways and Cruzeiro have agreed to the interline agreement and Pan American has authority to issue tickets on its own stock for flights on Cruzeiro. Defendant contends, and it is not disputed, that Pan American is not Cruzeiro's general sales agent and no Pan American-Cruzeiro sales agency agreement is in effect. But see Lawson v. Pan American World Airways, Inc., 30 Misc.2d 274, 216 N.Y.S.2d 549 (Sup. Ct. 1961). Cruzeiro has no salesman here and does not advertise in the United States of America.

Cruzeiro's contacts with the State of New York at the time it was served with process are as follows: Cruzeiro maintains and has maintained for "some time"² a purchasing office in the City of New York, located at 39 West 55 Street. Its present office consists of three rooms, having an aggregate floor area of approximately 400 sq. ft. Prior to April 1963 it maintained "somewhat larger"³ offices at 60 East 42 Street, New York City. Defendant's name is on the door of its offices, and is listed in the building directory. Two employees are employed on a full-time basis at this New York office: Miss Cecile Malouf, its United States Representative, and a "clerical assistant." Miss Malouf has a general power of attorney from Cruzeiro and she uses this authority in her purchasing activities. Miss Malouf's functions, however, are limited exclusively to matters connected with the purchase of spare parts and other equipment necessary for the maintenance and servicing of Cruzeiro's "large fleet of American manufactured aircraft and the maintenance and servicing of American equipment on its four planes of French manufacture, as well as the export of such purchases to Brazil."⁴ Dr. J. Benito Ribeiro Dantas, President of Cruzeiro, states in his affidavit in support of the motion that "Since the manufacturers of many of the parts and supplies required by Cruzeiro do not maintain offices or sales representatives in Brazil, Cruzeiro must maintain a purchasing agent in the United States to acquire needed parts and supplies. It would be impossible for Cruzeiro to operate its fleet without access to spare parts and other equipment purchased through its New York purchasing office."⁵

The volume of Cruzeiro's gross operating revenues was given⁶ but the sales volume of Cruzeiro's procurement and purchases in the United States was not. All that was mentioned in the Dantas' affidavit which can serve as a clue as to whether or not Cruzeiro's purchases are substantial was that the sales volume of Cruzeiro's purchases in the United States from year to year varied with the "availability to it of U. S. dollar exchange and its maintenance and servicing requirements." There was no claim that Cruzeiro's United States purchases were insubstantial. Office expenses, including Miss Malouf's salary and the salary of her secretary, amounted to approximately $2,000 per month.

The purchasing office discharges its responsibility in the following manner: Cruzeiro's materiel department, located in Rio de Janeiro, Brazil, sends a detailed list of the purchasing requirements to the New York purchasing office, specifying the make, model and manufacture of the required items. The New York office then assumes full responsibility for the purchase of the materiel. It sends a request for bids to American suppliers of the desired items. The New York office has authority to, and does select the successful bidder, "largely on the basis of price, but also taking into account other factors such as the date of delivery, quality of merchandise, etc."⁷ Although the New York office has complete authority to accept or reject bids, occasionally technical advice concerning acceptance of bids is sought from Cruzeiro's principal office. After selecting the successful bidder, the New York office prepares the purchase order and submits it to the supplier.

Payment for purchases is made by the New York office from funds in one of the two bank accounts which Cruzeiro...