Griffin v. Air South, Inc., Civ. A. No. 13559-13562

• Decision Date: 24 March 1971
• Docket Number: Civ. A. No. 13559-13562,13923 and 14063.,13658,13700
• Citation: 324 F. Supp. 1284
• Parties: Mrs. Laverne H. GRIFFIN, Plaintiff, v. AIR SOUTH, INC. and Beech Aircraft Corporation, Defendants. Mrs. Iness ROBERTS, Plaintiff, v. AIR SOUTH, INC. and Beech Aircraft Corporation, Defendants. Mrs. Louise B. GIBSON, Plaintiff, v. AIR SOUTH, INC. and Beech Aircraft Corporation, Defendants. Mrs. Charlotte I. FULLER, Plaintiff, v. AIR SOUTH, INC. and Beech Aircraft Corporation, Defendants. Mrs. Judy WAGNER, Plaintiff, v. BEECH AIRCRAFT CORPORATION, Defendant. Mrs. Beulah L. SWAGGART, Plaintiff, v. AIR SOUTH, INC. and Beech Aircraft Corporation, Defendants. Violet Sharp WINTERBOTTOM et al., Plaintiff, v. AIR SOUTH, INC. and Beech Aircraft Corporation, Defendants. AIR SOUTH, INC. and William H. Evans, Plaintiffs, v. BEECH AIRCRAFT CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Georgia

324 F. Supp. 1284

Mrs. Laverne H. GRIFFIN, Plaintiff, v. AIR SOUTH, INC. and Beech Aircraft Corporation, Defendants.

Mrs. Iness ROBERTS, Plaintiff, v. AIR SOUTH, INC. and Beech Aircraft Corporation, Defendants.

Mrs. Louise B. GIBSON, Plaintiff, v. AIR SOUTH, INC. and Beech Aircraft Corporation, Defendants.

Mrs. Charlotte I. FULLER, Plaintiff, v. AIR SOUTH, INC. and Beech Aircraft Corporation, Defendants.

Mrs. Judy WAGNER, Plaintiff, v. BEECH AIRCRAFT CORPORATION, Defendant.

Mrs. Beulah L. SWAGGART, Plaintiff, v. AIR SOUTH, INC. and Beech Aircraft Corporation, Defendants.

Violet Sharp WINTERBOTTOM et al., Plaintiff, v. AIR SOUTH, INC. and Beech Aircraft Corporation, Defendants.

AIR SOUTH, INC. and William H. Evans, Plaintiffs, v. BEECH AIRCRAFT CORPORATION, Defendant.

Civ. A. Nos. 13559-13562, 13658, 13700, 13923 and 14063.

United States District Court, N. D. Georgia, Atlanta Division.

March 24, 1971.

Arnold & Cate, Atlanta, Ga., Pruitt & Ruhle, Anderson, S. C., Robert S. Perkins, Speiser, Shumate, Geoghan, Krause, Rheingold & Madole, Washington, D. C., Robert E. Browne, III, Means, Evins, Browne & Hamilton, Spartanburg, S. C., for Laverne H. Griffin, Iness Roberts, Louise B. Gibson and Charlotte I. Fuller.

Ross & Finch, Atlanta, Ga., for Judy Wagner.

Hurt, Hill & Richardson, Atlanta, Ga., for Beulah L. Swaggart.

Troutman, Sams, Schroder & Lockerman, Atlanta, Ga., Kreindler & Kreindler, New York City, for Violet Sharp Winterbottom and others.

Powell, Goldstein, Frazer & Murphy, Atlanta, Ga., for Air South, Inc. and William H. Evans.

Smith, Cohen, Ringel, Kohler, Martin & Lowe, Edward E. Dorsey, Atlanta, Ga., for Beech Aircraft Corp.

ORDER OF COURT

MOYE, District Judge.

The Court has before it the motions and supplemental motions of defendant Beech Aircraft Corporation ("Beech") for summary judgment as to its first, second, third, and fourth defenses. In addition Beech has moved to dismiss in No. 13923.

I. STATEMENT OF THE FACTS

These cases all arose out of the crash of a Beech B-99 aircraft operated by Air South, Inc. ("Air South") near Monroe, Georgia, on July 6, 1969. Civil Action Nos. 13559, 13560, 13561, 13562, 13700 and 13923 are wrongful death actions naming both Air South and Beech as defendants; No. 13658 is a wrongful death action against Beech alone; and No. 14063 is a hull loss claim by Evans (owner) and Air South (lessee) against Beech.

Beech's motions for summary judgment are based upon lack of in personam jurisdiction, insufficiency of process and service thereof, and, improper venue.

Plaintiffs in all of these cases sought service of process on Beech by serving an officer of Southern Airways Company ("Southern") at the Atlanta Airport. In addition, plaintiffs in Nos. 13700, 13923 and 14063 sought service on Beech pursuant to the Georgia "long-arm" statute, Ga.Code Ann. § 24-113.1. Plaintiffs in Nos. 13700 and 14063 also sought service on Beech pursuant to the "Georgia Non-Resident Corporation Act", Ga.Code Ann. §§ 22-1507, 1508 and 1509. Finally, after Beech had filed its motion for summary judgment, plaintiffs in Nos. 13559, 13560, 13561, 13562 and 13658 also sought service on Beech pursuant to the "long-arm" statute, supra.

Defendant Beech is a Delaware corporation having its office and principal place of business in Wichita, Kansas. Beech is not qualified to do business in Georgia.

The B-99 aircraft is sold only by Beech itself, and is not sold through distributors.

Southern, although not a party to any suit here, is the sole distributor of Beech products, exclusive of the B-99, in Georgia and other southeastern states. Southern services all Beech products, including the B-99.

These are all diversity cases. Beech has implied that diversity is lacking because plaintiff Swaggart, in Civil Action No. 13700, is a citizen of Colorado and Beech is authorized to do business in Colorado. Beech is incorporated in Delaware and has its principal office and place of business in Kansas. Under 28 U.S.C. § 1332(c), diversity would be lacking only if plaintiff were from Delaware or Kansas. Such is not the case here, and diversity exists.

II. JURISDICTIONAL QUESTION

There are two problems which confront the Court at the outset in its consideration of in personam jurisdiction: (1) whether the Georgia "long-arm" statute comports with the due process clause of the Fourteenth Amendment to the United States Constitution, and (2) whether in personam jurisdiction is properly acquired under that statute.

This Court, in Marival, Inc. v. Planes, Inc., 302 F.Supp. 201, at 205 (N. D.Ga.1969), noted that: "Our task in the instant case is made easier by the fact that, absent state cases on this subject, we hold the Georgia "long-arm" statute Ga.Code Ann. § 24-113.1 to be coterminous with the due process clause." Nothing has intervened to change the Court's view, and we adhere to that holding.

The fountainhead for due process considerations in jurisdictional questions is the landmark case of International Shoe Company v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). There the Supreme Court abandoned the accretion of years embodied in the "implied consent" or "presence" tests running back to Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1877). The Supreme Court held in International Shoe that in personam jurisdiction is proper in a state court if the defendant has "certain minimum contacts with it the forum state such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" 326 U.S., at 316, 66 S.Ct., at 158 (citations omitted).

International Shoe's progeny have constantly expanded the concept of what will be held to constitute those "minimum contacts" necessary to subject a defendant to the forum court's jurisdiction. See, Travelers Health Association v. Virginia, 339 U.S. 643, 70 S.Ct. 927, 94 L.Ed. 1154 (1950); McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1955). Those cases supply the standards, but, of course, the Court must look to the facts of the cases before it to determine if the standards are met.

The precise question under consideration here, although in a different factual situation, was heard in International Shoe, supra. There the Court said:

But to the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give rise to obligations; and, so far as those obligations arise out of or are connected with the activities within the state, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue.

326 U.S. 310, at 319, 66 S.Ct. 154, at 160.

In determining whether Beech has the "minimum contacts" with Georgia necessary to subject it to in personam jurisdiction under the Georgia "long-arm" statute, it is necessary to articulate the precise position occupied by Beech in this litigation. Beech is a Delaware corporation having its principal place of business in Wichita, Kansas. With the exception of sales of the B-99 type aircraft involved in this case, Beech distributes its products in Georgia through Southern, its Contract Distributor. The Distributor Agreement between Beech and Southern are attached as exhibits to the affidavits of John A. Elliott, Secretary-Treasurer of Beech, Jesse M. Childress, Jr., President of Southern, and Gerald Ford, Assistant Comptroller of Southern, submitted in all cases in support of Beech's motion for summary judgment.

The Distributor Agreement, or its direct lineal forebears, has been subject to the close scrutiny of several courts to determine if Beech was "doing business" within the jurisdiction of those courts. The unanimous conclusion was that Beech, through its distributors, had been doing business in the forum states. Szantay v. Beech Aircraft Corp., 237 F. Supp. 393 (E.D.S.C.1965), aff'd, 349 F. 2d 60 (4th Cir. 1965); Dunn v. Beech Aircraft Corp., 276 F.Supp. 91 (E.D.Pa. 1967); Scalise v. Beech Aircraft Corp., 276 F.Supp. 58 (E.D.Pa.1967). While it is not alleged that this Court has before it the identical Distributor Agreements considered by those courts, we have read those cases and have read the Distributor Agreement with Southern, and the conclusion is inescapable that Beech has, while changing the wording of the agreement somewhat, done nothing to lessen the degree of control exercised over its distributors.

The Court does not feel it necessary to spell out in this opinion all of the incidents of control Beech exercises over signatories to the Distributor Agreement with Southern, but rather feels it sufficient to say that they are present here as they were in Szantay, Scalise and Dunn. See, the enumeration of these "contacts" and incidents in the Addenda to Plaintiff's Memorandum of Law, filed December 18, 1970, in Civil Action No. 13559; Plaintiff's Brief, filed November 25, 1970, in Civil Action No. 13658, at pp. 1 and 2; Plaintiff's Brief, filed December 18, 1970, in Civil Action No. 13700, at pp. 13 and 14.

A case which is particularly in point here is Delray Beach Aviation Corp. v. Mooney Aircraft, Inc., 332 F.2d 135 (5th Cir. 1964). In that case Mooney, a Texas aircraft manufacturer, was held to be within reach of the Florida "long-arm" statute, based on its contacts in Florida. Judge (now Chief Judge) Brown, writing for the Court, said:

Mooney Aircraft, engaged in the manufacture of airplanes in Texas, but aware that its commercial success depended on the intensive sale of its airplanes throughout the nation, purposefully sought to enter and compete in the Florida market. With a choice of doing it by direct employees in a company branch, or through a traditional sales and service distributor, it deliberately chose the latter. In so doing, it was careful

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