Dalmau Rodriguez v. Hughes Aircraft Co., 85-1303
| Decision Date | 09 January 1986 |
| Docket Number | No. 85-1303,85-1303 |
| Parties | Juan DALMAU RODRIGUEZ, et al., Plaintiffs, Appellants, v. HUGHES AIRCRAFT COMPANY, et al., Defendants, Appellees. |
| Court | U.S. Court of Appeals — First Circuit |
Francisco M. Troncoso with whom Paul E. Calvesbert and Calvesbert & Brown, San Juan, P.R., were on brief for plaintiffs, appellants.
Francisco Ponsa-Flores with whom Francisco Ponsa-Feliu, Edda Ponsa-Flores, and Lawrence E. Duffy, San Juan, P.R., were on brief for defendants, appellees.
Before BOWNES, Circuit Judge, TIMBERS, * Senior Circuit Judge, TORRUELLA, Circuit Judge.
This is an appeal from a dismissal of plaintiffs' diversity tort action against defendant Hughes Helicopters, Inc. 1 of California for lack of personal jurisdiction. The question is whether Hughes' contacts with Puerto Rico were sufficient under Puerto Rico law and the due process clause of the Constitution to subject it to the jurisdiction of the United States District Court for Puerto Rico.
When jurisdiction is contested, the burden is on the plaintiff to prove facts necessary to sustain jurisdiction. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936); Escude Cruz v. Ortho Pharmaceutical Corp., 619 F.2d 902, 904 (1st Cir.1980). This action arose when a helicopter manufactured by Hughes and owned by the Police Department of Puerto Rico crashed on April 20, 1981, seriously injuring its two police occupants. The jurisdictional facts began with the acquisition by the Police Department of the helicopter that crashed.
On July 15, 1980, the General Services Administration of Puerto Rico solicited bids for two helicopters for the Police Department. Bids were submitted by Enstrom Corporation, Carib Aviation, Inc. of Miami, Florida, Hughes, and Helicopter Rental Co., a Puerto Rico company. Carib, Hughes, and Helicopter Rental all bid to sell the same helicopter, a model 300C Hughes helicopter. Enstrom bid to sell its own model, F-28C-2 helicopter. After consideration, the Puerto Rico GSA determined that the 300C Hughes machine was superior to the Enstrom. The Enstrom bid, which was the lowest, was, therefore, rejected. The next lowest bidder, Carib, was rejected because it did not submit a bid for the installation of the radios as called for in the specifications. Hughes, which submitted the third lowest bid, was eliminated because it did not submit a bid for the spare parts and special tools as required in the invitation to bid. Helicopter Rental was awarded the contract. It agreed to furnish two model 300C Hughes helicopters, optional equipment, spare parts, tools, freight, insurance, and training for pilots and mechanics for the sum of $272,995.
Hughes submitted its bid by mail and did not appear in person when the bids were opened. Hughes is incorporated in Delaware with its principal place of business in Culver City, California. At no time has it been authorized to do business in Puerto Rico and it has never done business there through any employee, agent or subsidiary. Hughes had no bank account in the Commonwealth and never owned or leased real or personal property located in Puerto Rico. The only personal contact Hughes had with Puerto Rico prior to its bid was a visit to the Island in 1977 or 1978 by its international sales representative, George Hurd, who went there as a guest of Carib Aviation and Marine Consultants, which was Hughes' distributor for the Caribbean area at the time. After the sale, Ray Stephens, a Hughes technician, went to Puerto Rico from February 23 to 25, 1981, to give assistance and advice relative to the drive shaft alignments of the two helicopters. Stephens also went to Puerto Rico in April of 1981 to help in the investigation of the crash. This constitutes all of Hughes' direct contacts with Puerto Rico.
Prior to receiving the invitation to bid, Augustine Carrasco, owner of Helicopter Rental, had seen an advertisement of Hughes in one of the trade journals or magazines that he received. He sent a request to the magazine for more information about Hughes helicopters and received a list of the commercial marketing personnel. Carrasco contacted the Eastern Sales Division of Hughes and was referred to one Robert F. Todd who, Carrasco was told, covered the Puerto Rico area. He told Todd about the bid request for the purchase of two helicopters by the Puerto Rico Police Department. According to Carrasco's sworn statement, he contacted Todd after he received the invitation to bid "on or about July 15, 1980." 2 Carrasco was informed by Todd that the two helicopters could be furnished by his office and Todd gave Carrasco all of the financial information needed to comply with the bid specifications.
After his company was awarded the bid, Carrasco called Todd who advised him to come to Atlanta, Georgia, and make a deposit for the two helicopters. When Carrasco got to Atlanta, he was informed by Todd that the two helicopters had been "optioned" by Hughes to Carib Helicopters, Inc. of Miami. 3 Todd said, however, that if Carrasco paid an additional $5,000 for each machine, he could arrange for them to be delivered to the Puerto Rico Police Department Todd wrote to Carrasco on October 10, 1980, telling him that the helicopters would be ready for pick up at Culver City on October 15. By telex of October 17, 1980, Carib authorized Hughes to accept payment in the amount of $181,700 from Carrasco for the two machines and deliver them to Alex Air. Carrasco instructed Alex Air as to how and where the helicopters were to be shipped. They arrived in San Juan, Puerto Rico, before the end of October and were delivered to the Puerto Rico Police Department. For some reason, the spare parts did not arrive with the helicopters. Carrasco called Todd and the parts arrived in Puerto Rico in different shipments, some consigned directly to the Puerto Rico Police Department and others consigned to Helicopter Rental.
but, if the payment was not made, Carrasco would have to wait until the helicopters came off the production line, which meant delivery after October of 1980. Since Carrasco had to make immediate delivery of the helicopters, he paid the additional $10,000.
The papers show that the helicopters were sold by Hughes to Carib. The bills of sale ran from Hughes to Carib, as did the warranties. There was evidence that a Hughes warranty could be transferred to the first subsequent purchaser. Hughes had a helicopter service center agreement with Carib whereby Carib was authorized as a factory inspection and service center for Hughes "on a non-exclusive basis." The agreement specifically provided that Carib was to furnish service "as an independent contractor and not as agent or manufacturer."
In its definitive opinion on the reach of Puerto Rico's long-arm statute, the Supreme Court of Puerto Rico held that in personam jurisdiction extends to all cases where it is constitutionally permissible. A.H. Thomas Co. v. Superior Court of Puerto Rico, 98 P.R.R. 864, 870 n. 5 (1970). Our inquiry into the requirements of state-law jurisdiction is, therefore, telescoped into our due process constitutional analysis.
The starting point is International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), which laid down the jurisdictional principle that
due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278.
Id. at 316, 66 S.Ct. at 158. The Court stated that an estimate of the inconveniences which would result to the corporation from a trial away from its principal place of business was relevant in determining whether the demands of fair play and substantial justice had been met. Id. at 317, 66 S.Ct. at 158. It went on to explain that there could be instances in which the continuous corporate operations within a state could be thought so substantial and of such a nature as to justify suit against it on causes of actions arising from dealings entirely distinct from its continuous activities. Id. at 318, 66 S.Ct. at 159. The Court stated that as a general rule the commission of some single or occasional acts of the corporate agent in a state would not suffice to establish jurisdiction over the corporation. It pointed out, however, that some acts "because of their nature and quality and the circumstances of their commission," could be deemed sufficient in and of themselves to render the foreign corporation liable to suit. Id. at 318, 66 S.Ct. at 159.
International Shoe 's main theme of "minimum contacts" and "traditional notions of fair play and substantial justice" has been replayed consistently by the Court with some variations and modifications. In McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), the Court held that a contract which had a "substantial connection" with the forum State was a sufficient basis for allowing it to exercise jurisdiction in a suit based on that contract. Id. at 223, 78 S.Ct. at 201. The particular contract involved was a contract of insurance under which a Texas insurance corporation had agreed to insure a California resident. Suit was later instituted by the beneficiary of the insured against the insurer in California state court. The insurer had no office or agent in California, but the Court upheld the jurisdiction of the California court. It noted that the contract was delivered in California, that the premiums were mailed from there and that the insured was a resident of California when he died. Id. The Court concluded that California had "manifest interest in providing effective means of redress for...
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