Eason v. Linden Avionics, Inc.

• Decision Date: 12 January 1989
• Docket Number: Civ. A. No. 87-4680.
• Citation: 706 F. Supp. 311
• Parties: Christopher EASON, individually and as Surviving Spouse and as Administrator of the Estate of Susan Eason, Plaintiff v. LINDEN AVIONICS, INC., Jen Rob Aviation, Inc., King Radio Corporation, Bendix Corporation, Allied-Signal, Inc. and Beech Aircraft Corporation, Defendants.
• Court: U.S. District Court — District of New Jersey

706 F. Supp. 311

Christopher EASON, individually and as Surviving Spouse and as Administrator of the Estate of Susan Eason, Plaintiff v. LINDEN AVIONICS, INC., Jen Rob Aviation, Inc., King Radio Corporation, Bendix Corporation, Allied-Signal, Inc. and Beech Aircraft Corporation, Defendants.

Civ. A. No. 87-4680.

United States District Court, D. New Jersey.

January 12, 1989.

COPYRIGHT MATERIAL OMITTED

Noah H. Kushlefsky, Kreindler & Kreindler, New York City, for plaintiff.

Martin G. Picillo, Budd, Larner, Kent, Gross, Picillo, Rosenbaum, Greenberg & Sade, Short Hills, N.J., for Linden Avionics, Inc.

David N. Zeehandelaar, Bolger, Picker & Winer, Vorhees Township, N.J., for Jen Rob Aviation, Inc.

John T. Keale, Carpenter, Bennett & Morrissey, Newark, N.J., for King Radio Corp. and Allied-Signal, Inc.

Wayne D. Greenfeder, Schwartz and Andolino, Livingston, N.J., for Beech Aircraft Corp.

LECHNER, District Judge.

In this diversity action Christopher Eason, in his individual capacity and as administrator of the estate, sues to recover for the wrongful death of his wife Susan. Allan Ramsay and Susan Eason were killed when the small passenger plane they were piloting and co-piloting crashed in Rhode Island. Several defendants allegedly responsible for the design, manufacture, maintenance and ownership of the airplane are joined in this action.

Defendant Beech Aircraft Corporation ("Beech") moves to dismiss the claim against it for lack of personal jurisdiction and improper venue. In the alternative, Beech requests that the action be transferred to the United States District Court for the District of Kansas. Beech raised an identical jurisdiction motion in the Superior Court of New Jersey, Bergen County where a companion suit was brought by the Estate of Allan Ramsay and is presently pending (the "State Court Action"). The motion in the State Court Action was denied.

Presented in this motion are four issues: (1) whether the state court ruling denying Beech's jurisdictional motion has preclusive effect in this action; (2) if not, whether Beech has sufficient minimum contacts with the State of New Jersey to render it amenable to personal jurisdiction; (3) whether the District of New Jersey is the proper venue for the claim against Beech; and (4) whether this action should be transferred to the District of Kansas.

Facts

On November 27, 1985 pilot Allan Ramsay and co-pilot Susan Eason were killed when their Beechcraft King Air Model C-90 crashed in East Greenwich, Rhode Island while en route from Morristown, New Jersey to Providence, Rhode Island. Alleging responsibility on the part of various defendants, Christopher Eason ("Eason") brought this action based on theories of negligence and strict liability. The State Court Action seeks recovery for the wrongful death of pilot Allan Ramsay. See Letter from Noah H. Kushlefsky to chambers, dated October 6, 1988. The plaintiff in this action and the plaintiff in the State Court Action are represented by the same law firm. Id.

Beech, a Delaware corporation with its principal place of business in Kansas, allegedly designed and manufactured the Beechcraft airplane. Defendant Jen Rob Aviation, Inc. ("Jen Rob"), a New Jersey corporation operating principally in New Jersey, allegedly owned the airplane at the time of the crash. Defendants King Radio Corporation ("King Radio"), a Kansas corporation, and Bendix Corporation ("Bendix"), a Delaware corporation, allegedly designed various component parts of the airplane. Defendant Linden Avionics, Inc. ("Linden"), a New Jersey corporation, allegedly maintained the airplane on behalf of Jen Rob. Defendant Allied-Signal, Inc. ("Allied-Signal"), having acquired King Radio and Bendix, is named in the action on a theory of corporate successor liability.

In its motion to dismiss, Beech contends its contacts with New Jersey are insufficient to support either jurisdiction or venue in this district. Beech conducts the bulk of its business outside of New Jersey. Although authorized to do business in Colorado and Alabama, Beech is not so authorized in New Jersey. Affidavit of Richard S. Griffiths ("Griffiths Aff.") ¶ 2. Beech maintains no manufacturing, sales, warehouse or other facilities in New Jersey. Id. at ¶ 4. Beech owns no property in New Jersey. Id. It has no officers or employees in New Jersey, nor has it authorized a New Jersey agent to receive service of process. Id. at ¶ 6.

The only Beech contacts with New Jersey arise from its use of the New Jersey market for the sale of its airplanes. Beech airplanes are sold by various New Jersey aviation centers. Id. at ¶ 7. Two wholesalers, one of which is located outside of New Jersey, supply Beech parts within New Jersey. Id. These companies operate as independent distributors. Id. According to Beech, "all sales of aircraft and parts by Beech to these independent distributors are made pursuant to sales purposefully negotiated and completed in Kansas."¹ Beech Moving Brief at 4.

Beech concedes its employees often make trips to New Jersey. "On occasion, Beech employees have assisted independent distributors located within the State of New Jersey and demonstrated Beech products. Such assistance is performed solely at the request of and for the benefit of such independent distributors." Plaintiff's Exhibit 1 at 3, ¶ 8. Beech also admits to making contracts for "procurement of vendor goods or services from a New Jersey retailer." Id. Beech has sold thirty-one airplanes to New Jersey aviation centers within the last five years. Id. Attachment "A." Beech lists over one hundred employee trips to New Jersey in the past five years. Id. Attachment "B." Beech also admits to purchasing goods and services from companies located in New Jersey. Beech Moving Brief at 6.

With regard to the sale of the airplane flown by Allan Ramsay and Susan Eason, Beech first sold the plane to its subsidiary, Indiana Beechcraft Corporation, located in Indiana, which in turn sold the plane to a subsidiary, Beechcraft East, located in Farmingdale, New York. Beechcraft East then sold the plane to Irwin Feiner of Ocala, Florida, who then resold it to Beechcraft East. Beechcraft East thereafter sold the airplane to Jen Rob in New Jersey.

In the State Court Action, Judge Arthur Minuskin issued an order denying a Beech motion to dismiss for lack of personal jurisdiction. Letter from Noah H. Kushlefsky to chambers, received October 17, 1988. Judge Minuskin held Beech had sufficient contacts in New Jersey to support personal jurisdiction in New Jersey. Relying on Asahi Metal Ind. v. Superior Ct. of Cal., Solano Cty., 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987), Judge Minuskin found that Beech both placed its aircraft products into the stream of commerce and maintained purposeful contact with New Jersey through the sales and marketing activities of its employees.

Discussion

A. Issue Preclusion

Before addressing the substance of the Beech jurisdictional defense, the possible preclusive effect of the prior state court judgment must be examined.² Congress has provided that "judicial proceedings shall have the same full faith and credit in every court within the United States ... as they have by law or usage in the courts of the State ... from which they are taken." 28 U.S.C. § 1738.³ Based upon this statutory direction, federal courts are to raise the issue of the preclusive effect of prior state court rulings whenever the courts of the state "from which the judgments emerged would do so." Kelly v. TYK Refractories Co., 860 F.2d 1188, 1193 (3d Cir. 1988) (quoting Allen v. McCurry, 449 U.S. 90, 96, 101 S.Ct. 411, 415-16, 66 L.Ed.2d 308 (1980)); see also VanDissel v. Jersey Cent. Power & Light, 194 N.J.Super. 108, 121-122, 476 A.2d 310 (App.Div.), cert. denied, 99 N.J. 186, 491 A.2d 690 (1984). Accordingly, the preclusive effect of the order denying the Beech motion in the State Court Action will be determined with reference to New Jersey law. See Migra v. Warren County School District Board of Ed., 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984); Towers, Perrin, Forster & Crosby, Inc. v. Brown, 732 F.2d 345 (3d Cir. 1984).

Res judicata and collateral estoppel are "related but independent concepts." Gregory v. Chehi, 843 F.2d 111, 115 (3d Cir. 1988). These doctrines generally prohibit relitigation of claims and issues decided in a prior proceeding. As summarized by the Supreme Court in Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n. 5, 99 S.Ct. 645, 649 n. 5, 58 L.Ed.2d 552 (1979):

Under the doctrine of res judicata, a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action. Under the doctrine of collateral estoppel, on the other hand, the second action is upon a different cause of action and the judgment in the prior suit precludes relitigation of issues actually litigated and necessary to the outcome of the first action.

(citing 1B J. Moore, Moore's Federal Practice ¶ 0.405(1) at 622-624 (2d ed. 1974)).

The term res judicata has been given a variety of meanings, some of which incorporate the distinct concept of collateral estoppel. Gregory, 843 F.2d at 115 (citing A. Vestal, Res Judicata/Preclusion, V-13 to 14 (1969)). "To reduce the confusion that resulted from the interchangeable use of these terms, the courts have refined the nomenclature used in the preclusion doctrine." Id. (citing Wade v. City of Pittsburgh, 765 F.2d 405, 408 (3d Cir.1985)). Following the guidance of the Supreme Court and the Restatement (Second) of Judgments, the terms "claim preclusion" and "issue preclusion" will be used. See Migra, 465 U.S. at 75, 104 S.Ct. at 892; Gregory, 843 F.2d at 115-116. The term claim preclusion replaces res judicata; the term issue preclusion replaces collateral estoppel. Gregory, 843 F.2d at 116.

Eason seeks to estop Beech from raising the specific issue of personal jurisdiction, invoking the doctrine of issue preclusion....