Petroleum Helicopters, Inc. v. Avco Corp., 86-4144
| Citation | 804 F.2d 1367 |
| Decision Date | 02 December 1986 |
| Docket Number | No. 86-4144,86-4144 |
| Parties | PETROLEUM HELICOPTERS, INC., Plaintiff-Appellant, v. AVCO CORPORATION, et al., Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
Lisa J. Miley, McGlinchey, Stafford, Mintz, Cellini & Lang, Kenneth H. Laborde, New Orleans, La., for plaintiff-appellant.
Howard Daigle, Jr., Phelps, Dunbar, Marks, Claverie & Sims, Stephen P. Hall, New Orleans, La., for The Garrett Corp.
Appeal from the United States District Court for the Western District of Louisiana.
Before BROWN, RUBIN, and GARWOOD, Circuit Judges.
A Louisiana company sued a California manufacturer for property damage sustained when its helicopter sank in the coastal waters off Louisiana shores. It alleged that the accident was caused at least in part by a defect in the helicopter float that had been made by the manufacturer and sold by it in New Jersey to a Texas company. The district court dismissed the action for lack of personal jurisdiction over the manufacturer under Louisiana's long-arm statute, 623 F.Supp. 902 (1985). We certify to the Louisiana Supreme Court the question of the long-arm statute's applicability.
Petroleum Helicopters, Inc., a Delaware corporation which has its principal place of business in Louisiana, bought a helicopter from Aerospatiale Helicopter Corporation, a Texas manufacturer, to transport men and equipment from Louisiana to offshore installations. The helicopter, apparently while being used for this purpose, sank after an emergency landing on the Gulf of Mexico, beyond the territorial waters of Louisiana. Garrett Corporation, the defendant, had supplied the helicopter flotation devices from its New Jersey plant.
Petroleum Helicopters sued Aerospatiale and, in addition, Avco Corporation, a Connecticut corporation, which had designed and manufactured the helicopter engine; Societe Nationale Industrielle Aerospatiale, a corporation domiciled in France, which had also participated in the design and manufacture of the engines; Parker Hannifin Corporation, which had designed and manufactured the fuel manifold of the helicopter engine; and Garrett. Petroleum Helicopters asserted that Garrett had designed, manufactured, and assembled the flotation devices on the helicopter; that these had defects at the time they left Garrett's hands that caused or contributed to the sinking of the helicopter; and that Garrett was liable to it for breach of express and implied warranties made by Garrett. Service of process was made on Garrett under the Louisiana long-arm statute. Michael Duhon, who was a passenger in the helicopter, died in the accident. His representatives brought suit in state court, suit 84-3057 in the Fifteenth Judicial District Court for the Parish of Lafayette, Louisiana. In that suit Garrett was named as a principal defendant and as a cross-claim defendant by Petroleum Helicopters. That court has sustained a motion to dismiss Garrett.
Garrett, whose principal place of business is in California, manufactures aerospace and industrial products, including helicopter floats, which are made in New Jersey. Garrett has no property or offices in Louisiana nor are any of its employees based there.
Garrett supplies 80% of the helicopter flotation systems used in the entire world. It sells floats to manufacturers of helicopters like Aerospatiale and it also sells replacement helicopter floats to users of helicopters. In 1980, Aerospatiale's sales to Petroleum Helicopters were 19% of its volume and in 1981 these amounted to 8%. In that year, Garrett sold floats costing about $7,000 to Petroleum Helicopters and sold other Louisiana customers $14,000 in floats. The floats sold directly to Petroleum Helicopters, however, were made for a different kind of helicopter than the one that sank.
Aside from the sale of helicopter floats, Garrett conducts a substantial amount of business in Louisiana. Between 1980 and 1983, its Louisiana sales averaged $1.75 million. A Garrett account executive visits Louisiana monthly to discuss the use of Garrett equipment with customers; other Garrett representatives visit Louisiana to train users of Garrett products; Garrett sends a mobile van to Louisiana semi-annually to service its products; and Garrett mails promotional materials directly to customers in Louisiana. It also advertises its products in several national trade publications that are distributed in Louisiana.
Garrett contends that neither the Louisiana long-arm statute nor due process permits a Louisiana court to assert personal jurisdiction over it. Petroleum Helicopters argues that the sole test for personal jurisdiction in a federal question case is due process and that due process allows jurisdiction over Garrett. Petroleum Helicopters also contends that, even if the long-arm statute governs personal jurisdiction, the court can assert jurisdiction over Garrett.
The long-arm statute question is unsettled; consequently, it is an appropriate issue for certification to the Louisiana Supreme Court. 1 We may certify, however, only if the state-law question controls the outcome of the case. 2 Consequently, we must first decide the federal issue. 3 Ordinarily, we do not decide a federal question when resolution of a state issue might moot the federal question. Restraint here, however, would defeat the even stronger policy of having state courts decide state law. If we do not decide the federal question, the Louisiana Supreme Court might not decide the long-arm statute issue for the certified question might not then be dispositive, and we might be seeking decision of a question that would prove to have been moot. 4
If Garrett has minimum contacts with Louisiana of such a nature that subjecting it to the jurisdiction of Louisiana courts would not offend "traditional notions of fair play," 5 it is not deprived of due process by the assertion of in-personam jurisdiction. The concept of minimum contacts assures that defendants will be treated fairly by protecting them "against the burdens of litigation in [an] inconvenient forum." 6 It also ensures that the state asserting jurisdiction has a sufficient interest in deciding the suit, 7 and is not selected as a mere adjudicator of a dispute that is of no concern to it.
In-personam jurisdiction may be asserted on two different bases. If a corporation engages in "continuous and systematic general business" activities in a state, then the state may exercise "general" jurisdiction over it. 8 When a state has general jurisdiction over a corporation, its courts have power to adjudicate suits in which the corporation is involved even if there is no relationship between the cause of action and the defendant's contacts with the forum. 9 On the other hand, if general jurisdiction is lacking, but the cause of action arises out of or is related to the defendant's contacts with the forum, the forum may exercise "specific" jurisdiction, 10 that is, jurisdiction limited to adjudication of the particular controversy.
Relying upon the 1984 Supreme Court decision in Helicopteros Nacionales de Colombia, S.A. v. Hall, 11 Garrett contends that Louisiana cannot exercise either general or specific jurisdiction over it. In Helicopteros however, both parties agreed that specific jurisdiction was absent. Consequently, the court restricted its analysis to circumstances warranting the exercise of general jurisdiction. 12
Garrett's activities in Louisiana are not sufficient to establish general jurisdiction, so Petroleum Helicopters relies on the thesis that the Louisiana long-arm statute confers specific jurisdiction over Garrett. In World-Wide Volkswagen Corp. v. Woodson, 13 the Supreme Court held that specific jurisdiction may be exercised over a corporation that engages in such a sufficient amount of business in a state that it can "reasonably anticipate being haled into court there" to defend actions concerning its products. 14 The stream-of-commerce principle is designed to encompass companies that purposefully serve markets broader than the states in which its initial or direct sales are made. 15 Consequently, we have held that jurisdiction may be asserted over a company that manufactures a component part in one state for incorporation into a finished product in a second state and sale to customers in a third state. 16 The evidence warrants the conclusion that Garrett tried to serve as broad a market as it could reach, including Louisiana. 17 Unlike the local distributors in World-Wide Volkswagen, who merely resold products made by and purchased from another, Garrett is a manufacturer who makes its product " 'available for purchase in as many forums as possible.' " 18 Garrett directly served the Louisiana market with its replacement floats; it indirectly served Louisiana customers by selling its floats for incorporation into helicopters that were sold for use in Louisiana. 19 Moreover, Garrett sent representatives to Louisiana for promotion, training, and servicing. 20 In sum, Garrett "deliver[ed] its [floats] into the stream of commerce with the expectation" that Louisianans would purchase them. 21 Garrett purposefully availed itself of the benefits of doing business in Louisiana; consequently, it is not unfair to require Garrett to appear in Louisiana courts. 22
Louisiana has a strong interest in adjudicating this dispute. The helicopter was used in Louisiana by a firm having its principal place of business in this state, and that firm suffered the economic injury. Louisiana has an " 'interest in providing effective means of redress for its residents.' " 23 The litigation is pending in the same court that dismissed Garrett, so it would be manifestly more convenient to adjudicate the entire dispute in Louisiana. 24
Garrett contends that the stream of commerce analysis should not apply because the accident occurred outside of Louisiana. This...
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