The Ninth Circuit Court of Appeals has dismissed for lack of personal jurisdiction design-defect claims filed against a French company that designed and manufactured an airplane which crashed in 2010 some 200 miles southeast of Havana, Cuba, killing everyone on board. Martinez v. Aero Caribbean, No. 12-16043 (9th Cir., decided August 21, 2014). The plaintiff heirs argued that their service of the summons and complaint in California on Avions de Transport Régional’s (ATR’s) vice president of marketing, who was attending a conference on the company’s behalf, created general personal jurisdiction over ATR under a “tag jurisdiction” theory. They also argued that ATR’s contacts with the state were sufficiently extensive to create general personal jurisdiction.
According to the court, the case that recognized tag jurisdiction, Burnham v. Superior Court, 495 U.S. 604 (1990), was a split decision, with no controlling majority, and involved service in divorce proceedings on a New Jersey resident while he was visiting his children in California. Because corporations are artificial persons and an officer is not the corporation, the court determined that the presence of an officer is “not physical in the way contemplated by Burnham.” Thus, the only way for the plaintiffs to establish personal jurisdiction over ATR would be to show that its contacts with California support either specific or general jurisdiction. Since no part of the lawsuit arose out of or related to ATR’s contacts with the state and thus specific jurisdiction was lacking, the plaintiffs argued that the company’s contacts were so extensive that they created general jurisdiction.
In this regard, the plaintiffs relied on five sets of contacts, including ATR sales contracts with a California corporation “worth between $225 and $450 million”; contracts with 11 California component suppliers; the presence in the state of company representatives “to attend industry conferences, promote ATR products, and meet with suppliers”; one company’s use of ATR airplanes on its California route; and company advertising in trade publications distributed in California. Relying on Daimler AG v. Bauman, 134 S. Ct. 746 (2014), and citing its “demanding” standard, the court ruled that this activity was insufficient to establish general jurisdiction, which is appropriate when a corporation “engages in a substantial, continuous, and systematic course of business” in the state.
Under Daimler, the court said, “the ‘paradigm’ fora for general jurisdiction are a corporation’s place of incorporation and principle place of business.” Noting that the company is organized and has its principal place of business in France, the court further observed that it is not licensed to do business in California and its “California contacts are minor compared to its other worldwide contacts.” The court affirmed the lower court’s dismissal of the claims against ATR and ruled that it did not abuse its discretion in denying the plaintiffs’ request for additional jurisdictional discovery as to the company’s North American subsidiary, which was headquartered in Virginia when the crash occurred and has since relocated to Florida.