Jones Enterprises, Inc. v. Atlas Service Corporation

• Decision Date: 07 April 1971
• Docket Number: No. 25516-25518.,25516-25518.
• Citation: 442 F.2d 1136
• Parties: JONES ENTERPRISES, INC., a corporation, and Western, Ltd., a corporation, comprising a joint venture known as Jones-Western, Appellee-Respondent, v. ATLAS SERVICE CORPORATION, a corporation, and Atlas Prestress, Inc., a/k/a Atlas Prestressing Co., a corporation, Appellants-Petitioners. JONES ENTERPRISES, INC., etc. v. EMPIRE PRESTRESS, INC. JONES ENTERPRISES, INC., etc. v. T. Y. LIN & ASSOCIATES, INC.
• Court: U.S. Court of Appeals — Ninth Circuit

442 F.2d 1136 (1971)

JONES ENTERPRISES, INC., a corporation, and Western, Ltd., a corporation, comprising a joint venture known as Jones-Western, Appellee-Respondent, v. ATLAS SERVICE CORPORATION, a corporation, and Atlas Prestress, Inc., a/k/a Atlas Prestressing Co., a corporation, Appellants-Petitioners.

JONES ENTERPRISES, INC., etc. v. EMPIRE PRESTRESS, INC.

JONES ENTERPRISES, INC., etc. v. T. Y. LIN & ASSOCIATES, INC.

Nos. 25516-25518.

United States Court of Appeals, Ninth Circuit.

February 25, 1971.

Rehearing Denied April 7, 1971.

George Hayes (argued), of Delaney, Wilses, Moore, Hayes & Reitman, Anchorage, Alaska, for Atlas Service Corp. and others.

Murphy Clark (argued), of Hughes, Thorsness, Lowe, Gantz & Clark, Anchorage, Alaska, King, Miller, Anderson, Nash & Yerke, Portland, Or., for Empire Prestress, Inc.

Michael W. Roberts (argued), of Boyko & Simmons, Los Angeles, Cal., for T. Y. Lin & Associates, Inc.

Jack L. Joyce, Corvallis, Or. (argued), of Kobin & Meyer, Portland, Or., Burr, Pease & Kurtz, Anchorage, Alaska, for appellee.

Before CHAMBERS, JERTBERG, and HUFSTEDLER, Circuit Judges.

Rehearing Denied in No. 25518 April 7, 1971.

HUFSTEDLER, Circuit Judge:

Appellants, Atlas Service Corporation, Atlas Prestressing, Inc.,¹ Empire Prestress, Inc., and T. Y. Lin & Associates, pursuant to leave of this court (28 U.S. C. § 1292(b)), appeal from an order denying their motions to quash service of process upon them. Appellee, Jones-Western, a joint venture composed of Jones Enterprises, Inc., and Western, Ltd., brought a breach of contract action based on diversity of citizenship in the District Court for the District of Alaska and obtained substituted service upon each of the appellants following the procedure adopted by the Alaskan long-arm statute. Since this is a diversity case, amenability of appellants to in personam jurisdiction depends upon Alaskan law defining Alaska's jurisdiction, read with the constitutional limitations imposed by the due process clause. Appellants contend that they are immune from the assertion of in personam jurisdiction in Alaska, because none had sufficient contacts with Alaska to render it amenable to substituted process.

The action arises from the collapse of an apartment building in Anchorage, during an earthquake on March 27, 1964. Jones-Western was the general contractor for the construction of the building. Empire Prestress, Inc. ("Empire"), contracted with Jones-Western to supply certain materials to the job, including prestressed tendons and anchors, shop drawings, and design calculations, together with installation equipment. Empire subcontracted the supply of tendons and anchors to Atlas, and subcontracted the supply of engineering designs and drawings for the prestressed items to T. Y. Lin & Associates ("Lin"). Jones-Western's complaint charged that the collapse was caused by faulty engineering designs and drawings and by the failure of the prestressed materials to meet contract specifications.

Before we reach the merits of the jurisdictional question we dispose of two preliminary contentions.

First, appellants argue that Jones-Western waived its right to assert in personam jurisdiction against them because it yielded to an earlier ruling of the district court quashing service. A quick sketch of the procedure antedating the order from which the appeal is taken will suffice. The appellants severally moved to quash service of process. The court initially indicated that it would grant the motions, but in its order, the court gave Jones-Western 30 days within which "to file an amended complaint alleging facts establishing the jurisdiction of this Court." The order also stated that, if no amended complaint were thus filed, it would dismiss the action, or, alternatively, if Jones-Western elected to stand on the complaint, the court, upon receiving notice of the election, would dismiss the action. Within the 30-day period, Jones-Western filed a document labeled "Amended Complaint," that added no new facts, but that cited Duple Motor Bodies, Ltd. v. Hollingsworth (9th Cir. 1969) 417 F.2d 231, a decision that had come down after the district court's initial ruling. The district court addressed a memorandum to counsel stating its intention, based on Duple, to deny the motions to quash and to dismiss, and ordering counsel to file supplemental briefs directed to Duple. Thereafter, the court entered the order denying the motions and staying the proceedings for the purpose of applying to our court for an interlocutory appeal. On these facts we see no basis for any waiver or estoppel on Jones-Western's part. The district court's initial order showed on its face that it was not intended to be final forthwith. Before the order became final, Jones-Western filed an additional brief. True, Jones-Western labeled the document "Amended Complaint," rather than a motion to reconsider, accompanied by points and authorities. But that procedural irregularity does not change the substance of what happened. The misbranding is not the foundation for a claim of either waiver or estoppel. (Cf. Rule 8(f), Fed.R.Civ.Proc.; Rubenstein v. United States (10th Cir. 1955) 227 F.2d 638, cert. denied (1956) 350 U.S. 993, 76 S. Ct. 542, 100 L.Ed. 858.)

Second, appellants contend that Jones-Western could not rely on the Alaskan long-arm statute (Alaska Stats. 09.05.015) because it was not enacted until after this cause of action arose, and Alaska has a statutory policy against retroactive interpretation of its statutes (Alaska Stats. 01.10.090). We assume, without deciding, that appellants are right. But the assumption does not help appellants, because the law of Alaska, antedating the new statute, subjected foreign corporations to Alaska process to "the outer limits of the due process clause of the Federal Constitution." (Northern Supply Inc. v. Curtiss-Wright Corp. (Alaskan Supreme Court 1965) 397 P.2d 1013, 1016-1017; see also Stephenson v. Duriron Co. (Alaska 1965) 401 P.2d 423.) The new statute cannot be broader than that, and it is not seriously contended that the new statute is narrower; therefore, it makes no practical difference which law applies.

We now reach the root question: Did each appellant have such minimum contacts with Alaska that subjecting it to Alaskan jurisdiction would not offend "traditional notions of fair play and substantial justice"? (International Shoe Co. v. Washington (1945) 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95.)

Each appellant supplies us with a lengthy list of the things it does not and did not do in Alaska: None had ever qualified to do business in Alaska; none had an agent for service of process there. In short, this is not a case, as to any appellant, in which there were any elements of physical presence within the forum state connected with the cause of action, nor is it a case in which the alleged actionable wrong occurred in the forum state. If the drawings and designs were defective and if the materials supplied did not meet contract specifications, those derelictions occurred before those products reached Alaska. The effect of those derelictions, the collapse of the building, was most certainly felt in Alaska. Nonetheless, as appellants correctly note, the existence of an effect in the forum state cannot, without more, subject its cause to in personam jurisdiction in that state. Appellants, however, did do more, and very little indeed in addition to impact in the state is required to satisfy due process.

Empire contracted in Oregon to supply Jones-Western with the structural materials and designs for a price of $32,400 f. o. b. Portland. It knew that the ultimate destination of this flow of materials was Anchorage. In a few instances it caused materials to be shipped directly to Anchorage. It corresponded with Jones-Western's project superintendent in Alaska and placed several telephone...