Donahue v. Far Eastern Air Transport Corp., s. 80-1243
| Decision Date | 22 April 1981 |
| Docket Number | Nos. 80-1243,80-1472,s. 80-1243 |
| Parties | Catherine M. DONAHUE, Executrix of Frances A. Cehon, deceased, and Sidney H. Cehon, Sr., Executor of the Estate of Richard P. Cehon, deceased, Appellants, v. FAR EASTERN AIR TRANSPORT CORPORATION a/k/a Yuan Tung Aeronautic Company. Catherine M. DONAHUE, Executrix of Frances A. Cehon, deceased, and Sidney H. Cehon, Sr., Executor of the Estate of Richard P. Cehon, deceased, v. FAR EASTERN AIR TRANSPORT CORPORATION a/k/a Yuan Tung Aeronautic Company, Appellant. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Marc S. Moller, New York City, for appellant in No. 80-1243 and appellee in No. 80-1472.
Geoffry D. C. Best, New York City, for appellee in No. 80-1243 and cross-appellant in No. 80-1472.
Before ROBB, WILKEY and GINSBURG, Circuit Judges.
Opinion for the Court filed by Circuit Judge GINSBURG.
Two United States citizens, Frances A. and Richard P. Cehon, lost their lives at Taipei International Airport on July 31, 1975, while on holiday in Taiwan. The Cehons, parents of two young children, were Connecticut domiciliaries, temporarily residing in Guam. They had purchased tickets in Taiwan for an intra-island flight. The couple departed from Hualien, a city on Taiwan, aboard a British-made Viscount, owned and operated by a Taiwan company, Far Eastern Air Transport Corporation (F.E.A.T.). At the terminus of the journey in Taipei, the plane crashed in an attempted landing during a heavy rainstorm. We are called upon to determine whether F.E.A.T. is subject to suit in a United States forum for the alleged wrongful death of the Cehons.
Asserting negligence in the operation, maintenance, and control of the aircraft, the Cehons' executors commenced identical actions against F.E.A.T. in five U. S. district courts: the District of Guam, the District of Hawaii, the Central District of California, the Southern District of New York, and the District of Columbia. Pursuant to 28 U.S.C. § 1407 (1976), the Judicial Panel on Multidistrict Litigation, on June 30, 1977, ordered all five actions consolidated for pretrial proceedings in the District of Columbia. In re Air Crash Disaster at Taipei International Airport on July 31, 1975, 433 F.Supp. 1120 (Jud.Pan.Mult.Lit., 1977).
Following the transfer and consolidation, F.E.A.T. moved to dismiss, under Fed.R.Civ.P. 12(b)(2), for lack of personal jurisdiction. At plaintiffs' request, the district court deferred decision on the motion to dismiss pending discovery limited to the jurisdiction issue. Donahue v. F.E.A.T., Misc. No. 77-0147 (D.D.C. Nov. 1, 1977). One year later, in a memorandum opinion filed November 16, 1978, the court granted the motion to dismiss in its entirety. It concluded that F.E.A.T. lacked contacts with any of the five forums sufficiently "substantial and continuous" to make it fair to subject the airline to suit on claims unrelated to the demonstrated United States contacts. The next year, in response to plaintiffs' motion for reconsideration, the district court adhered to its initial ruling regarding Guam, Hawaii, New York, and the District of Columbia. However, based on an augmented presentation of California connections, it determined that the litigation should proceed there. Donahue v. F.E.A.T., Misc. No. 77-0147 (D.D.C. Dec. 18, 1979).
After district court certification pursuant to 28 U.S.C. § 1292(b) (1976), this court authorized an interlocutory appeal from the ruling that F.E.A.T. was answerable in California for the Taipei crash. 1 Before us now are: (1) plaintiffs' appeal from the order granting F.E.A.T.'s motion to dismiss with respect to the actions commenced in Guam, Hawaii, New York, and the District of Columbia; and (2) F.E.A.T.'s appeal from the denial of its motion with respect to California. We conclude that the motion to dismiss should have been granted with respect to all five actions.
Plaintiffs and, to a more limited extent, the district court have confounded specific jurisdiction to adjudicate claims linked to activities occurring or having an impact in the forum state, and general, "all purpose" adjudicatory authority to hear and decide claims totally unconnected with the forum. See Stabilisierungsfonds Fur Wein v. Kaiser Stuhl Wine Distributors, 647 F.2d 200, at 203 n.5 (D.C.Cir.1981). F.E.A.T.'s California connections would permit litigation against it there on claims relating to ventures it pursued in that state. Those connections, however, are not "so substantial and of such a nature" 2 as to warrant haling F.E.A.T. to California to answer for activity it pursues entirely within Taiwan.
In its initial November 1978 ruling, the district court pointed to three F.E.A.T.-California connections: (1) F.E.A.T. purchased spare airplane parts from United States companies in several states and paid for them from a San Francisco Citibank account; 3 (2) after the crash that took the lives of the Cehons but before commencement of this litigation, F.E.A.T. applied to the Civil Aeronautics Board, in December 1975, to initiate a Taipei-Los Angeles cargo charter service; (3) anticipating inauguration of the cargo service, F.E.A.T. negotiated for the purchase of two Boeing 737 aircraft from United Airlines, and consummated the over $7 million purchase in May 1977. These activities, the district court pointed out, bore no relationship to the Taipei accident. They were insufficient, the court determined, to require F.E.A.T. to defend a lawsuit in California seeking recovery for the estate and survivors of the United States citizens killed in the crash. 4
The augmented presentation that led the district court to reach an opposite conclusion in December 1979 related to F.E.A.T.'s anticipated California-Taiwan cargo service. The Civil Aeronautics Board had granted permission for thrice-weekly cargo flights from Taiwan to Los Angeles and San Francisco via Hawaii and Guam; F.E.A.T. sent approximately 44 employees to California for six weeks of training in the operation and maintenance of the Boeing aircraft; F.E.A.T. retained a freight forwarding agent in California to arrange for transshipment of airplane parts for repair purposes; 5 the planned cargo service was announced in the World Aviation Directory, a publication circulated throughout the United States. In addition to these contacts, enumerated in the district court's December 1979 memorandum, plaintiffs call our attention to further aspects of the cargo venture. Among these additional contacts, plaintiffs feature the following items: a "managing agent" of F.E.A.T. "temporarily resided" in California to facilitate arrangements for the purchase of aircraft and the planned cargo service; the Boeing planes F.E.A.T. purchased to carry cargo were to be serviced in California pursuant to a repair, overhaul, and maintenance agreement with United Air Lines; F.E.A.T. contemplated acquisition in the United States of additional aircraft, it anticipated opening offices in Los Angeles and Honolulu staffed by a total of six people, and it forecast a 1976 profit of $1.5 million from Taiwan-United States transportation of approximately 95,550 tons of freight.
The planned cargo service did not get off the ground. After this litigation commenced, F.E.A.T. halted the proposed operation on advice of counsel. Counsel's advice was rendered in view of F.E.A.T.'s potential exposure to jurisdiction in the United States in the wrongful death actions plaintiffs had instituted. It is undisputed that the cargo service was not inaugurated and that F.E.A.T. has derived no revenue from the projected venture. Nonetheless, the district court reasoned that the activity had gone far enough to qualify California as a permissible forum for adjudication of the claims in suit. The court noted F.E.A.T.'s characterization of the cargo venture contacts "as tentative or preliminary business activities," but stated that "they clearly constitute the initial phase of a major business enterprise." J.A. 318. The magnitude of the F.E.A.T.-California connections relating to the planned cargo enterprise, the district court concluded, made it fair and reasonable for the Cehons' executors to call F.E.A.T. to account in California for the tragic termination of the July 31, 1975, intra-Taiwan flight.
Plaintiffs have invoked federal court subject matter competence on the basis of the parties' diversity of citizenship. No claim arising under federal law figures in the litigation. Personal jurisdiction over F.E.A.T. in these circumstances turns on state law. See Arrowsmith v. United Press International, 320 F.2d 219 (2d Cir. 1963) (en banc); Ramamurti v. Rolls-Royce Ltd., 454 F.Supp. 407 (D.D.C.1978), aff'd mem., 612 F.2d 587 (D.C.Cir.1980); 4 C. Wright & A. Miller, Federal Practice and Procedure § 1075, at 309-10 & n.50 (1969). The relevant state law provision, California Code of Civil Procedure § 410.10 (West 1973), telescopes state and federal limitations on the state's assertion of personal jurisdiction: the section permits the exercise of personal jurisdiction "on any basis not inconsistent with the Constitution ... of the United States." We therefore turn to the question whether this litigation may go forward in California without violating constitutional due process constraints on a state's assertion of personal jurisdiction over an alien corporation.
Our inquiry is guided by recent Supreme Court decisions elaborating upon Chief Justice Stone's benchmark opinion in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), particularly, Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977), Rush v. Savchuk, 444 U.S. 320, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980), and World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). While none of these decisions dealt...
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