LNS Enters. LLC v. Cont'l Motors, Inc.

• Decision Date: 12 January 2022
• Docket Number: No. 20-16897,20-16897
• Citation: LNS Enters. LLC v. Cont'l Motors, Inc., 22 F.4th 852 (9th Cir. 2022)
• Parties: LNS ENTERPRISES LLC, a limited liability company; Sonoma Oral and Facial Surgery PLLC, a professional limited liability company; Peter Spanganberg; Lynn Spanganberg, Plaintiffs-Appellants, v. CONTINENTAL MOTORS, INC., a Delaware corporation; Textron Aviation, Inc., a Kansas corporation, Defendants-Appellees, and Columbia Aircraft Manufacturing Corporation; Cessna Aircraft Company ; Chandler Aviation Services, Inc. ; Van Bortel Aircraft, Inc.; Skylancer Aviation LLC ; Lone Mountain Aviation, Inc.; Falcon Executive Aviation, Inc.; Professional Air; Unknown Parties, Defendants.
• Court: U.S. Court of Appeals — Ninth Circuit

22 F.4th 852

LNS ENTERPRISES LLC, a limited liability company; Sonoma Oral and Facial Surgery PLLC, a professional limited liability company; Peter Spanganberg; Lynn Spanganberg, Plaintiffs-Appellants,

v. CONTINENTAL MOTORS, INC., a Delaware corporation; Textron Aviation, Inc., a Kansas corporation, Defendants-Appellees,andColumbia Aircraft Manufacturing Corporation; Cessna Aircraft Company ; Chandler Aviation Services, Inc. ; Van Bortel Aircraft, Inc.; Skylancer Aviation LLC ; Lone Mountain Aviation, Inc.; Falcon Executive Aviation, Inc.; Professional Air; Unknown Parties, Defendants.

No. 20-16897

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 18, 2021 Phoenix, Arizona

Filed January 12, 2022

Brian J. Lawler (argued), Pilot Law P.C., San Diego, California; Robert K. Lewis, Amy M. Lewis, and Christopher A. Treadway, Lewis & Lewis Trial Lawyers, Phoenix, Arizona; for Plaintiffs-Appellants.

Laurie A. Salita (argued), Malvern, Pennsylvania; Will S. Skinner, Woodland Hills, California; for Defendant-Appellee Continental Motors, Inc.

Tracy H. Fowler (argued), Snell & Wilmer LLP, Salt Lake City, Utah; Rachael Peters Pugel, Snell & Wilmer LLP, Phoenix, Arizona; for Defendant-Appellee Textron Aviation, Inc.

Before: Ronald Lee Gilman,^** Consuelo M. Callahan, and Daniel A. Bress, Circuit Judges.

GILMAN, Circuit Judge:

This appeal involves claims against Defendants Continental Motors, Inc. (Continental) and Textron Aviation, Inc. (Textron) arising from a nonfatal airplane crash. Plaintiffs—the pilot, his wife, and two companies controlled by the couple—challenge the district court's decision to grant Continental's and Textron's motions to dismiss for lack of personal jurisdiction and to deny Plaintiffs' request for jurisdictional discovery.

At this point in the litigation, Plaintiffs have conceded that Arizona does not have general jurisdiction over either Defendant. Plaintiffs have also failed to establish a prima facie case of specific jurisdiction over either Defendant because Plaintiffs have not demonstrated that Defendants had sufficient minimum contacts with Arizona that are related to Plaintiffs' claims. And Plaintiffs' reasons for seeking jurisdictional discovery with regard to Defendants' contacts with Arizona were properly deemed insufficient because the request amounted to nothing more than a hunch that discovery might reveal facts relevant to the jurisdictional analysis. We therefore AFFIRM the district court's decision to dismiss this case for lack of personal jurisdiction and to deny the request for jurisdictional discovery.

I. BACKGROUND

Plaintiffs purchased what they describe as a "2006 Cessna Columbia" aircraft in 2016, equipped with a Continental engine, from an unidentified individual. The aircraft was used by Plaintiffs to fly within Arizona for work. On July 31, 2017, Sonoma Oral and Facial Surgery's principal, Peter Spanganberg, was flying the plane when he was forced to make an emergency crash landing during the flight. As a result of the emergency landing, the aircraft suffered significant structural damage and the complete loss of its engine, but fortunately no one was killed in the crash.

Plaintiffs allege that various actors were involved in the manufacture and maintenance of the aircraft. The actors relevant to this appeal are Continental and Textron. Continental manufactured an engine in 2006 and shipped it to Columbia Aircraft Manufacturing Corporation (Columbia) in Oregon, where it was installed on the aircraft in question. Also in 2006, Cessna Aircraft Company (Cessna) acquired certain assets from Columbia, which was the original manufacturer of the Plaintiffs' aircraft. Cessna did not assume Continental's liabilities apart from the express, written aircraft warranties still in effect at the time of acquisition. In 2014, Cessna became a subsidiary of Textron, and Cessna was fully merged into Textron in 2017.

Plaintiffs filed the operative complaint in the Superior Court of the State of Arizona for Maricopa County on July 30, 2019. Their claims included negligence, negligence per se, strict products liability, and breach of warranty against 15 defendants. In the complaint, Plaintiffs alleged that Continental designed, manufactured, and distributed the engine, and that Continental was responsible for all parts and components of the engine and for all recalls and repair orders related thereto. Plaintiffs also alleged that Textron is the parent company or holding company for Cessna Aircraft Company, and that Cessna was engaged in the design, manufacture, distribution, and testing of the aircraft. But neither the aircraft nor its engine were manufactured, sold, or serviced in Arizona by either Defendant.

The case was removed to the United States District Court for the District of Arizona on September 19, 2019. Four of the 15 original defendants—including Continental and Textron—moved to dismiss the complaint for lack of personal jurisdiction. In connection with their motions to dismiss, Continental attached a declaration and Textron attached an affidavit from their respective corporate officers identifying their connections (or lack thereof) to Arizona. Plaintiffs opposed the motions and requested jurisdictional discovery as to Defendants if the court found that there was no personal jurisdiction.

In June 2020, the district court granted the motions to dismiss for lack of personal jurisdiction because Plaintiffs had failed to show "that any of the moving Defendants are meaningfully connected to Arizona in such a way that renders them subject to this Court's exercise of personal jurisdiction." It also denied Plaintiffs' request for jurisdictional discovery "because Defendants ha[d] already specifically rebutted Plaintiffs' unsupported jurisdictional allegations and arguments," and Plaintiffs had requested discovery "without providing any affidavit or evidence substantiating their requests or describing with any precision how such discovery would be helpful to the Court." The court concluded that the request was "akin to hunches that personal jurisdiction might exist."

Plaintiffs initially appealed the orders relating to all four of the defendants that had filed motions to dismiss, but ultimately stipulated to the dismissal of the appeals as to those other than Continental and Textron. We therefore limit our consideration to these two remaining Defendants.

II. ANALYSIS

A. Standards of review

We review a dismissal for lack of personal jurisdiction de novo.

Boschetto v. Hansing , 539 F.3d 1011, 1015 (9th Cir. 2008). A district court's decision to deny jurisdictional discovery, in contrast, is reviewed under the abuse-of-discretion standard. Data Disc, Inc. v. Sys. Tech. Assocs., Inc. , 557 F.2d 1280, 1285 n.1 (9th Cir. 1977).

B. The jurisdictional facts before this court

In reviewing a district court's decision on a motion to dismiss for lack of personal jurisdiction, "we take as true all uncontroverted allegations in the complaint and resolve all genuine disputes in the plaintiff's favor." Glob. Commodities Trading Grp., Inc. v. Beneficio de Arroz Choloma, S.A. , 972 F.3d 1101, 1106 (9th Cir. 2020). But we cannot "assume the truth of allegations in a pleading which are contradicted by affidavit." Data Disc , 557 F.2d at 1284. If both sides submit affidavits, then "[c]onflicts between the parties over statements contained in affidavits must be resolved in the plaintiff's favor." Boschetto , 539 F.3d at 1015 (citation omitted). Declarations and affidavits are functional equivalents in this context. See 28 U.S.C. § 1746.

The record before us is not comprised solely of Plaintiffs' complaint. Rather, Continental attached a declaration to its motion to dismiss, and Textron attached an affidavit to its motion to dismiss. The declaration and the affidavit contravene allegations Plaintiffs made in the complaint. If Plaintiffs had filed affidavits or declarations in response, the district court and this court would have been obligated to resolve conflicting statements in Plaintiffs' favor. See Schwarzenegger v. Fred Martin Motor Co. , 374 F.3d 797, 800 (9th Cir. 2004). But Plaintiffs filed no affidavits or declarations in response. The relevant uncontroverted record, therefore, includes Defendants' rebuttals to Plaintiffs' allegations.

C. The current landscape of personal jurisdiction caselaw

Bearing in mind the factual record that the parties have established, we now turn to the primary question before us: whether Arizona has specific jurisdiction over Continental and Textron. Our analysis of this issue has been aided by the Supreme Court's recent decision in Ford Motor Co. v. Montana Eighth Judicial District Court , ––– U.S. ––––, 141 S. Ct. 1017, 209 L.Ed.2d 225 (2021), which is discussed in detail below.

"Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons." Daimler AG v. Bauman , 571 U.S. 117, 125, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) (citing Fed. R. Civ. P. 4(k)(1)(A) ). Arizona exerts "personal jurisdiction over a nonresident litigant to the maximum extent allowed by the federal constitution." A Uberti & C. v. Leonardo , 181 Ariz. 565, 892 P.2d 1354, 1358 (1995). The Due Process Clause limits a state's power to exercise control over a nonresident defendant. Walden v. Fiore , 571 U.S. 277, 283, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014). To protect a defendant's liberty, due process necessitates that a nonresident defendant have "certain minimum contacts" with a forum state before that state can exercise personal jurisdiction over that individual or entity. Int'l Shoe Co. v. Washington , 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The forum state can exercise personal jurisdiction if the defendant has sufficient contacts with the state "such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ " Walden , 571 U.S. at 283, 134 S.Ct. 1115 (quoting Int'l Shoe , 326 U.S. at 316, 66...