Waltham Precision Instrument Co. v. McDonnell Air. Corp.

• Citation: 310 F.2d 20
• Decision Date: 05 December 1962
• Docket Number: No. 6010.,6010.
• Parties: WALTHAM PRECISION INSTRUMENT COMPANY, Inc., Plaintiff, Appellant, v. McDONNELL AIRCRAFT CORPORATION, Defendant, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

310 F.2d 20 (1962)

WALTHAM PRECISION INSTRUMENT COMPANY, Inc., Plaintiff, Appellant, v. McDONNELL AIRCRAFT CORPORATION, Defendant, Appellee.

No. 6010.

United States Court of Appeals First Circuit.

November 13, 1962.

As Amended on Denial of Rehearing December 5, 1962.

David A. Rakov, Boston, Mass., with whom Sumner Z. Kaplan and Kaplan & Kaplan, Boston, Mass., were on brief, for appellant.

James C. Heigham, Boston, Mass., with whom Choate, Hall & Stewart, Boston, Mass., was on brief, for appellee.

Before WOODBURY, Chief Judge, and HARTIGAN and ALDRICH, Circuit Judges.

HARTIGAN, Circuit Judge.

This is an appeal by plaintiff-appellant from a judgment of the United States District Court for the District of Massachusetts granting defendant-appellee's motion to dismiss in an action growing out of an alleged breach of contract by defendant and from an order denying plaintiff's motion under Rules 52 and 59. The basis of defendant's motion to dismiss is that it is not subject to service of process in the District of Massachusetts and that it has not been properly served.

The defendant, McDonnell Aircraft Corporation, (M.A.C.), is incorporated under the laws of Maryland and has its principal office and place of business in St. Louis, Missouri. M.A.C. is primarily a defense contractor with over 99% of its sales to the United States Government. It manufactures military aircraft, space vehicles and electronic equipment for the space and defense industry. So far as its contacts with Massachusetts are concerned, none of these sales were made or solicited in that state. Moreover, M.A.C. has never been authorized to do business in Massachusetts and, as a foreign corporation, has never registered with the Massachusetts Commissioner of Corporations and Taxation. M.A.C. neither maintains an office, warehouse or other facility in Massachusetts nor does it have a telephone listing or bank account in that state.

Presently M.A.C. has one employee located in Massachusetts. He is a field service representative assigned to a fighter interceptor squadron at Otis Air Force Base. The squadron flies aircraft manufactured by defendant and this employee acts as liaison between the squadron and M.A.C. in St. Louis on such matters as maintenance of the aircraft and pilot orientation in the operation of the aircraft. Desk space is furnished by the Air Force.

Defendant operates a data processing automation center in Missouri which produces less than one per cent of its annual sales. In the past this center has done some work for a Massachusetts corporation under contracts made in Missouri, all of the work being performed outside Massachusetts.¹

The instant action arises out of a contract which defendant executed with plaintiff under which the latter was to manufacture a timing device for use on a manned space capsule, as part of the Mercury Space Program. M.A.C. is the prime contractor for Project Mercury and had solicited bids from plaintiff and several other companies for manufacture of the timing mechanism.²

Plaintiff received the contract on the basis of its bid and thereafter commenced work. Subsequently defendant terminated the contract and thereafter plaintiff initiated the present suit.

Service was made on the Massachusetts Commissioner of Corporations and Taxation under the provisions of Mass. G.L. Ch. 181, § 3A, which provides for substituted service on a foreign corporation which "does business" in the Commonwealth.³ Defendant moved to dismiss the complaint or in lieu thereof to quash the return of service.

The principal issue is whether the defendant has so impressed itself on the Massachusetts economy that it can be said to be doing business there within the language of the above cited statute.

As we have previously pointed out, there are two questions to be resolved in this class of case. First, whether the local statute as construed by the courts of the pertinent state would subject the foreign corporation to local jurisdiction under the circumstances there present; secondly, if the forum attempted to assert jurisdiction would this action comport with the relevant clauses of the federal constitution. Sanders Associates, Inc. v. Galion Iron Works & Mfg. Co., 304 F.2d 915 (1st Cir.1962); Pulson v. American Rolling Mill Co., 170 F.2d 193 (1st Cir.1948). While the latter question is to be decided in accordance with federal precedents, evaluation of the scope of the local statute is a matter of state law and on this issue we sit as if we were a state court.

Plaintiff argues at length that, under the facts of this case, there is no constitutional inhibition against bringing the defendant within the ambit of the Massachusetts statute. For this position it relies on the expanded reach of permissive state court jurisdiction marked out by International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) and culminating in McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957). While the trend is surely discernible, the Supreme Court has clearly indicated that in this area there still exists due process boundaries which cannot be trespassed. Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed. 2d 1283 (1958). However, we may presently pretermit the question of whether an attempt here to subject the defendant to Massachusetts jurisdiction would exceed these boundaries because it is an issue which need only be resolved after it is decided that, on like facts, a Massachusetts court would assert jurisdiction.

We start with the proposition that a state is not required to assume the full reach of jurisdiction constitutionally allowable under the Fourteenth Amendment. Perkins v. Benquet Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952). Plaintiff here contends that it is the intention of the Massachusetts court to expand the thrust of its jurisdiction to its full constitutional limit. Plaintiff's argument is less persuasive because it is grounded in certain dicta of Massachusetts cases, e. g., Thurman v. Chicago, M. & St. P. Ry. Co., 254 Mass. 569, 575, 151 N.E. 63, 65, 66, 46 A.L.R. 563 (1926); Gillard's Case, 244 Mass. 47, 52, 138 N.E. 384 (1923), decided in a day when the "full" constitutional limit was conspicuously more circumscribed than it is today. Compare, Philadelphia & Reading Ry. Co. v. McKibbin, 243 U.S. 264, 37 S.Ct. 280, 61 L.Ed. 710 (1917); Simon v. Southern Railway, 236 U.S. 115, 35 S.Ct. 255, 59 L.Ed. 492 (1915) and Old Wayne Mut. Life Ass'n of Indianapolis, Indiana v. McDonough, 204 U.S. 8, 27 S.Ct. 236, 51 L.Ed. 345 (1907) with McGee v. International Life Ins. Co., supra.

We believe that the more meaningful approach is to determine what the Massachusetts court has done in subjecting foreign corporations to its jurisdiction rather than to what it said, in an earlier day, it might do.

The history of Massachusetts' assertion of jurisdiction over foreign corporations has been a conservative one. Supposed constitutional inhibitions early caused the Massachusetts court to abstain from asserting jurisdiction over foreign corporations engaged in interstate commerce — holding that mere solicitation of business by a foreign corporation did not constitute "doing business." Thurman v. Chicago, M. & St. P. Ry., supra. With these constitutional fears allayed, Perkins v. Benquet Mining Co., supra, the Massachusetts court sustained jurisdiction over foreign corporations where there was solicitation of business together with some additional business activity within the state. Jet Mfg. Co. v. Sanford...