Look v. Hughes Tool Company

• Decision Date: 11 December 1973
• Docket Number: Civ. A. No. 73-211 to 73-213.
• Citation: 367 F. Supp. 1003
• Parties: Sewell D. LOOK and Nancy Look of Columbia Falls, County of Washington, State of Maine v. HUGHES TOOL COMPANY. Sewell D. LOOK and Nancy Look of Columbia Falls, County of Washington, State of Maine v. HUGH B. WILLIAMS MANUFACTURING CO. Sewell D. LOOK and Nancy Look of Columbia Falls, County of Washington, State of Maine v. COMMERCIAL SHEERING AND STAMPING CO.
• Court: U.S. District Court — District of New Hampshire

367 F. Supp. 1003

Sewell D. LOOK and Nancy Look of Columbia Falls, County of Washington, State of Maine v. HUGHES TOOL COMPANY.

Sewell D. LOOK and Nancy Look of Columbia Falls, County of Washington, State of Maine v. HUGH B. WILLIAMS MANUFACTURING CO.

Sewell D. LOOK and Nancy Look of Columbia Falls, County of Washington, State of Maine v. COMMERCIAL SHEERING AND STAMPING CO.

Civ. A. Nos. 73-211 to 73-213.

United States District Court, D. New Hampshire.

December 11, 1973.

Bernard J. Robertson, Exeter, N. H., for plaintiffs.

E. Paul Kelly, Sheehan, Phinney, Bass & Green, Manchester, N. H., for defendants.

MEMORANDUM OPINION AND ORDER

BOWNES, District Judge.

This case arises out of an accident which occurred at a utility pole construction site in Deerfield, New Hampshire, on or about September 17, 1969. Plaintiff, an employee of the construction company, was hurt while working on a "digger" — a large mechanical holemaking device permanently mounted on a truck. He is suing the company that designed, manufactured, and distributed the digger in negligence and strict liability.¹ Defendant has moved for dismissal based on lack of in personam jurisdiction.

A. THE FACTS

At the time of the accident, plaintiff was a resident of New Hampshire (see plaintiff's affidavit) and an employee of the Seaward Construction Co., the contractor who was erecting the utility poles. Subsequent to the accident, plaintiff moved out of New Hampshire, and at the time this action was instituted, he was a resident of Maine.

Seaward is a Maine corporation with its principal place of business in Kittery, Maine. Sometime prior to the accident, Seaward ordered a digger from the defendant. The digger was sold to Seaward f. o. b. Dallas, and Seaward arranged for its shipment. Charles Bothwell, sales representative for Hughes, testified that Seaward had ordered the digger for use in the construction of power lines in Pennsylvania.

Defendant Hughes Tool Company is incorporated under the laws of the State of Delaware and has its principal place of business in Texas. Hughes is a large company which does business all over the world. It is one of the world's largest manufacturers of drilling bits and tool joints. Testimony of Bothwell. Although Hughes Tool owns no property in New Hampshire and is not qualified to do business here, Bothwell admitted that the diggers could be used anywhere and had probably been sold in about 98% of the states. In addition, Hughes Tool employs one Jim Blakinship, a New England sales representative based in Pennsylvania. Bothwell admitted that Blakinship visited New Hampshire in the course of his work, but he could not say how often or for how long. Bothwell testified that, to his knowledge, Hughes Tool has taken no orders in New Hampshire, has no business outlets in New Hampshire, has done no advertising in New Hampshire, and has not been a party to any other litigation in New Hampshire. I accept Bothwell's testimony for purposes of this opinion.

Plaintiff's only witness was Samuel Richardson Read, a professor of business and economics at the University of New Hampshire. Read had investigated the corporate structure and financial transactions of the Hughes Tool Company, Inc. He corroborated the fact that Hughes Tool is a very large company. In Read's opinion, it would have been reasonably foreseeable that a digger sold to a Kittery, Maine, firm would be used in New Hampshire. Although Bothwell indicated that he was unaware of Kittery's proximity to New Hampshire, I take judicial notice of the fact that Seaward does extensive business in New Hampshire.

B. THE CONCEPTUAL FRAMEWORK

Defendant's jurisdictional attack is mounted on two fronts. Its first claim is that there is no section in the New Hampshire jurisdictional statutory scheme which confers in personam jurisdiction over the Hughes Tool Company. The two relevant sections are NH RSA 300:14, which was amended in 1971 (prior to the commencement of this action, but subsequent to the accident), and NH RSA 300:11. In 1969 when the accident occurred, NH RSA 300:14 read in pertinent part as follows:

If a foreign corporation . . . commits a tort in whole or in part in New Hampshire against a resident of New Hampshire, such acts shall be deemed to be doing business in New Hampshire by such foreign corporation . . . . Emphasis added. NH RSA 300:14.

The 1971 amendment deleted the underlined words. It is defendant's position that plaintiff may not proceed under the 1971 amendment because it would be improper to apply it retroactively and that since plaintiff is now a nonresident, he cannot proceed under the older version of NH RSA 300:14, because that statute applied only to residents.

Finally, defendant maintains that if jurisdiction over Hughes Tool is to be invoked, it must be done under NH RSA 300:11. However, section 300:11 requires that defendant be "doing business" before in personam jurisdiction can be exercised over it; and as the hearing demonstrated, Hughes Tool Company does not do any business in New Hampshire.

As its second line of defense, Hughes Tool claims that even if New Hampshire has granted its courts the power to hear this case,

The commission of a tort, without any other contact in New Hampshire on the usual "doing-business" theory is pushing due process beyond the constitutional limits set forth in the New Hampshire cases . . . . Defendant's Brief at 4.

Plaintiff, of course, maintains that New Hampshire courts have the statutory power to decide this case and that such power is consistent with the due process clause of the Fourteenth Amendment.

C. THE MERITS

1. The Constitutional Question of Jurisdiction. The question to be resolved first is whether New Hampshire courts²can, consistent with the due process clause of the Fourteenth Amendment, assume jurisdiction over the defendant. The question is one of federal law and, fortunately, it has already been answered. In Gill v. Fairchild Hiller Corp., 312 F.Supp. 916 (D. N.H.1970), this court ruled that the designers and manufacturers of an airplane³ which crashed in New Hampshire were subject to the jurisdiction of this court. Here, as in Gill, defendant takes the position that

. . . before the plaintiffs can obtain jurisdiction they must show that the defendants had certain minimum business contacts with New Hampshire and that the maintenance of these actions in this forum will not offend traditional notions of fair play and substantial justice. Gill, supra, at 917.

The argument has no more weight in this case than it did in Gill. Jurisdiction here is predicated on the commission of a series of acts which

. . . because of their nature and quality and the circumstances of their commission, may be deemed sufficient to render the corporation liable to suit. International Shoe Co. v. State of Washington, 326 U.S. 310, 318, 66 S.Ct. 154, 159, 90 L.Ed. 95 (1945).

The touchstone of the International Shoe decision is that due process requires that a corporation have such minimal

contacts of the corporation with the state of the forum as make it reasonable, in the context of our federal system of government, to require the corporation to defend the particular suit which is brought there. International Shoe Co., supra, 326 U.S. at 317, 66 S.Ct. at 158.

International Shoe and its progeny have long since discarded the obfuscatory fictions on which jurisdiction was once based. Notions of fair play and reasonableness are now the cornerstones on which we build.

In this case defendant is a manufacturer of gigantic proportions. By its own admission, its products are distributed in 98% of the states.⁴ Moreover, the diggers are mounted on a mobile unit when sold. Defendant "must know that it is probable that the digger will be used all over the United States, if not all over the world." Gill, supra, 312 F.Supp. at 918; see Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961). In structuring its business relations, there is no suggestion that Hughes Tool relied on immunity to suit in New Hampshire.

The risk of suit being brought against them in any one of the fifty states is one of the risks that the defendants must bear because of the nature of their business. Gill, supra, 312 F. Supp. at 918.

Moreover, this is not a case like Seymour v. Parke, Davis & Co., 423 F.2d 584 (1st Cir. 1970). In Parke, Davis it was

. . . undisputed that New Hampshire has no interest in this litigation. The cause of action did not arise there, or as a result of anything which occurred there. Parke, Davis, 423 F.2d at 585.

Here New Hampshire has a substantial interest in the case. The accident occurred here, the cause of action arose here, important witnesses and evidence may be located in New Hampshire, and the substantive law of New Hampshire will control the liability issues.

2. The Question of Statutory Authority. Having decided that Hughes Tool can be subjected to the jurisdiction of New Hampshire courts consistently with the due process clause of the Fourteenth Amendment, I must determine whether New Hampshire's statutory scheme of jurisdiction provides a basis upon which this plaintiff may maintain the present action. Put more succinctly, do New Hampshire courts have the statutory authority to decide this case? Defendant contends that plaintiff may not rely on NH RSA 300:14 either as it existed in 1969 or as amended in 1971. The inapplicability of the earlier version is based on the fact that plaintiff is not now a New Hampshire resident, and defendant maintains that it would be improper to apply the amended version of the statute retroactively. This situation, defendant posits, leaves plaintiff to rely on the "doing-business" standard of NH RSA 300:11 — a standard defendant has shown plaintiff cannot meet.

Turning first to the question of the retroactive applicability of the amended version of NH RSA 300:14, I note that

Analysis of the particular problems of retroactivity by

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