Tillay v. Idaho Power Co.

• Citation: 425 F. Supp. 376
• Decision Date: 09 September 1976
• Docket Number: No. C-76-82.,C-76-82.
• Court: U.S. District Court — Eastern District of Washington
• Parties: Mary Lou TILLAY, Individually and as Personal Representative of the Estate of Dale Tillay, Deceased, and for Tamara Sue Tillay, a minor child, et al., Plaintiffs, v. IDAHO POWER COMPANY, a corporation, Defendant.

425 F. Supp. 376

Mary Lou TILLAY, Individually and as Personal Representative of the Estate of Dale Tillay, Deceased, and for Tamara Sue Tillay, a minor child, et al., Plaintiffs, v. IDAHO POWER COMPANY, a corporation, Defendant.

No. C-76-82.

United States District Court, E. D. Washington.

September 9, 1976.

Byrd, Davis, Eisenberg & Clark, Austin, Tex., Baker, Tessendorf, Milbourn & Fehringer, Columbus, Neb., Minnick & Hayner, Walla Walla, Wash., for plaintiffs.

Fred W. Gilbert, of Hamblen, Gilbert & Brooke, Spokane, Wash., for defendant.

MEMORANDUM AND ORDER TRANSFERRING CASE

NEILL, Chief Judge.

In this diversity case defendant has moved to dismiss on the basis of alleged lack of jurisdiction or, in the alternative, for change of venue to the district of Oregon. For reasons hereinafter stated the case will be transferred to the District of Oregon.

On April 11, 1974, Vernon Dale Tilley was a passenger in a small aircraft flying near La Grande, Oregon, when it struck defendant's power lines, crashed and burned, killing all occupants. Alleging that defendant's power lines were unmarked and negligently placed, plaintiffs brought this action basing jurisdiction on diversity of citizenship under 28 U.S.C. § 1332(a)(1).

Defendant's motion to dismiss is based on the grounds that defendant, a Maine corporation with its principal place of business in Idaho, is not licensed to do business in the State of Washington, does not maintain a place of business in Washington and, therefore, this Court lacks jurisdiction over it. Defendant further asserts plaintiffs have brought this action in the wrong judicial district because their claim for relief arose in Oregon and is prosecuted under Oregon law. Further, defendant argues plaintiffs' service of process on defendant in Boise, Idaho was ineffective because extraterritorial service is only permissible under Washington's long arm statute, RCW 4.28.185, which is inapplicable to the case at bench. The alternative motion for change of venue is based on the ground that the District of Oregon is a more convenient forum and a related action from the same aircraft crash is currently pending there and could be consolidated with the instant action if the venue change were ordered.

Plaintiffs resist the motion to dismiss, contending defendant is doing business in Washington, makes regular purchases of equipment here and because of its membership in an "Intercompany Pool" with offices in Spokane, Washington. Plaintiffs resist defendant's motion for change of venue on the grounds plaintiffs' choice of forum is presumptively preferable, a change of venue would be inconvenient to plaintiffs, most of whom are Washington residents, and plaintiffs would be prejudiced by consolidation of this action with the pending Oregon case.

As a general rule, "in the absence of jurisdiction over the person of a defendant in an action in personam, the orders and judgments of the court are void. Robertson v. Railway Labor Board, 268 U.S. 619, 45 S.Ct. 621, 69 L.Ed. 1119 . . ." Read v. Ulmer, 308 F.2d 915, 917 (5th Cir. 1962). See also, Arrowsmith v. United Press International, 320 F.2d 219, 234, 6 A.L.R.3d 1072 (2d Cir. 1963). However, as will be noted infra there is an exception to this general principle, which this Court believes is determinative of the pending motions. In a diversity case the determination as to jurisdiction is to be made by applying state law to the extent that the state's exercise of jurisdiction would be consistent with due process:

the amenability of a foreign corporation to suit in a federal court in a diversity action is determined in accordance with the law of the state where the court sits, with "federal law" entering the picture only for the purpose of deciding whether a state's assertion of jurisdiction contravenes a constitutional guarantee.

Arrowsmith v. United Press International, supra, 320 F.2d at 223. Accord: Southern Machine Company v. Mohasco Industries, Inc., 401 F.2d 374 (6th Cir. 1968); Mechanical Contractors Ass'n v. Mechanical Contractors Ass'n of Northern California, 342 F.2d 393, 398-399 (9th Cir. 1965). Accordingly, the Court must begin its inquiry with an examination of Washington's jurisdictional law.

Washington's legislature has empowered the courts of Washington to exercise their jurisdiction under the state's long arm statute, RCW 4.28.185, to the fullest extent possible under the Due Process Clause. Tyee Construction Company v. Dulien steel Products, Inc., 62 Wash.2d 106, 381 P.2d 245 (1963); Peter Pan Seafoods v. Mogelberg Foods, 14 Wash.App. 527, 544 P.2d 30 (1975), and jurisdiction under such a statute can constitutionally be based on the barest of contacts with the forum state. See, e. g., Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); McGee v. International Life Insurance Company, 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); International Shoe Company v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). However, jurisdiction can be founded on Washington's long arm statute only if plaintiffs' claims for relief arose from defendant's contacts with the state. RCW 4.28.185. Cf. Thompson v. Ecological Science Corporation, 421 F.2d 467, 470 (8th Cir. 1970). In apparent recognition of the fact that plaintiffs' cause of action is unrelated to any of defendant's contacts with Washington, plaintiffs do not assert the long arm statute as the basis of the Court's jurisdiction, but rather allege that defendant is "doing business" in Washington and is therefore sufficiently "present" to be sued here on any claim, irrespective of where it arose. Perkins v. Benguet Consolidated Mining Company, 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952); International Shoe Company v. Washington, supra, 326 U.S. at 317-318, 66 S.Ct. 154; Macario v. Alaska Gastineau Mining Company, 96 Wash. 458, 165 P. 73 (1917).

Where, as in the case at bench, the alleged basis of jurisdiction is that defendant is doing business in the forum state, defendant's contacts with the state must be considerably more substantial than in cases where defendant's contacts with the forum give rise to plaintiffs' claim, Hanson v. Denckla, supra, 357 U.S. at 251-253, 78 S.Ct. 1228; Arrowsmith v. United Press International, supra, 320 F.2d at 233-234, and the determination of whether such contacts amount to doing business must be made on a case-by-case basis by examining all the facts and circumstances of the foreign corporation's contacts with Washington. Tyee Construction Company v. Dulien Steel, supra, 62 Wash.2d at 115, 381 P.2d 245, citing Perkins v. Benguet Consolidated Mining Company, supra, 342 U.S. at 445, 72 S.Ct. 413. Accordingly, the Court must attempt to distill guidelines from the long line of Washington cases dealing with the question of "doing business" for jurisdictional purposes, and apply these to the facts of the case at bench against the backdrop of limitations imposed by the Due Process Clause.

The Intercompany Pool, of which defendant is a member, has its offices in Spokane, Washington. The pool Agreement provides, inter alia, for the creation of a committee composed of one representative from each of the seven signatory power companies. This committee is empowered to "direct all operations" under the agreement by the unanimous vote of all members (except for budgetary matters, which can be approved by a two-thirds vote of committee members). The activities of the committee consist of drafting annual reports concerning usage of electricity and generating capacity, research and development, and coordination of requests between the parties for additional electricity or to dispose of excess generating capacity. The operating expenses of the pool are administered by Washington Water Power Company, one of the signatories to the agreement, and are shared by the parties in proportion to the quantity of electricity each party sells. The agreement also provides that each party shall determine for itself whether or not to purchase power or to make it available to other parties, and that power sales and payment therefor shall be made directly between the parties rather than through the pool. In defendant's words, the Intercompany Pool

is primarily a clearinghouse for information as to the power supply and demand in the five-state area. It does not have the authority to buy or sell any power, but only transmits information to its members, who are then free to act on that as they see fit.

The power defendant sells to Washington utilities is delivered outside the state of Washington and defendant has no transmission lines or other facilities within the state. Further, it is uncontroverted that, except for the Intercompany Pool, defendant solicits no business in Washington, maintains no office or employees here, pays no Washington taxes, conducts no advertising in Washington and its purchases in Washington are strictly interstate transactions for which defendant pays no Washington sales tax.

In nearly every Washington appellate decision holding a foreign corporation was doing business in Washington for jurisdictional purposes, the foreign corporation employed an agent, directly answerable to it, who actively and regularly conducted business on behalf of the corporation within the state. Nakanishi v. Foster, 64 Wash.2d 647, 393 P.2d 635 (1964); International Shoe Company v. State, 22 Wash.2d 146, 154 P.2d 801, affirmed, International Shoe Company v. Washington, supra; State ex rel. Columbia Broadcasting Company v. Superior Court, 1 Wash.2d 379, 96 P.2d 248 (1939); State ex rel. Kerr Glass Manufacturing Corp. v. Superior Court, 166 Wash. 41, 6 P.2d 368 (1931); Johnson v. Atlantic & Pacific Fisheries Company, 128 Wash. 578, 224 P. 13 (1924); Strandall v. Alaska Lumber Company, 73 Wash. 67, 131 P. 211 (1913); Lively v. Husebye, 60 Wash. 47, 110 P. 673 (1910); Lee v. Fidelity Storage & Transfer Company, 51 Wash. 208, 98 P. 658 (1908). Conversely, in...