D'Jamoos v. Pilatus Aircraft Ltd ( 2009 )

Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
5-14-2009
D'Jamoos v. Pilatus Aircraft Ltd
Precedential or Non-Precedential: Precedential
Docket No. 08-2690
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 08-2690
THERESA D’JAMOOS, As Executrix of the Estate of Dawn
Elizabeth Weingeroff;
FREDERICK L. WEINGEROFF, Administrator of the Estate
of Leland C. Weingeroff
& Executor of the Estate of Gregg C. Weingeroff;
STANLEY J. WACHTENHEIM, Executor of the Estate of
Jeffrey M. Jacober;
MICHAEL A. JACOBER; DAVID S. JACOBER, Co-
Executors of the
Estate of Karen L. Jacober & Co-Administrators of the Estate
of Eric B. Jacober
v.
PILATUS AIRCRAFT LTD.; PILATUS FLUGZEUGWEKE
AKTIENGESELLSCHAFT; ROSEMOUNT AEROSPACE,
INC.; REVUE THOMMEN AC; EMCA; GOODRICH
AVIONICS SYSTEMS, INC.; L-3 COMMUNICATIONS
CORPORATION; GOODRICH CORPORATION
Theresa D’Jamoos; Frederick L. Weingeroff;
Stanley J. Wachtenheim; Michael A. Jacober;
David S. Jacober,
Appellants
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civ. No. 2-07-cv-01153)
Honorable Mary A. McLaughlin, District Judge
Argued March 5, 2009
BEFORE: BARRY and GREENBERG, Circuit Judges,
and ACKERMAN, District Judge*
(Filed: May 14, 2009)
Anthony Tarricone
Joseph P. Musacchio
Kreindler & Kreindler LLP
277 Dartmouth Street
Boston, MA 02116
*The Honorable Harold A. Ackerman, Senior Judge of the
United States District Court for the District of New Jersey,
sitting by designation.
Valerie M. Nannery
John Vail (argued)
2
Center for Constitutional Litigation, P.C.
777 6th Street, N.W.
Suite 520
Washington, DC 20001-3723
Sol H. Weiss
Anapol, Schwartz, Weiss, Cohan, Feldman
& Smalley, PC
1900 Delancey Place
Philadelphia, PA 19103-0000
Attorneys for Plaintiffs-Appellants
Bruce J. Berman (argued)
McDermott Will & Emery LLP
201 South Biscayne Boulevard
Suite 2200
Miami, FL 33131
Jeffrey Baltruzak
Jeffrey A. Rossman
McDermott Will & Emery LLP
227 West Monroe Street
Suite 5200
Chicago, IL 60606
J. Bruce McKissock
Marshall, Dennehey, Warner, Coleman & Goggin
18th Floor
1845 Walnut Street
Philadelphia, PA 19103
3
Attorneys for Defendant-Appellee Pilatus Aircraft Ltd.
OPINION OF THE COURT
GREENBERG, Circuit Judge.
I. INTRODUCTION
This matter comes on before this Court on an appeal from
an order of the United States District Court for the Eastern
District of Pennsylvania, entered on April 30, 2008, and made
final by an order entered on May 27, 2008: (1) granting a
motion by appellee Pilatus Aircraft Ltd. (“Pilatus”)1 to dismiss
it as a defendant for lack of personal jurisdiction, and (2)
denying appellants’ motion to transfer the action to the United
States District Court for the District of Colorado pursuant to 28
U.S.C. § 1631. D’Jamoos v. Pilatus Aircraft Ltd., No. 07-1153,
2008 U.S. Dist. LEXIS 35181 (E.D. Pa. Apr. 30, 2008). For the
reasons that follow, we will affirm the order of the District
Court to the extent that it held that it did not have jurisdiction
over Pilatus, but will vacate the order of the District Court to the
extent that it denied the motion to transfer the action to Colorado
1
Pilatus is a single entity which appellants sued in the District
Court under both its English and German names (Pilatus
Aircraft, Ltd. and Pilatus Flugzeugweke Aktiengesellschaft).
4
and will remand the case to the District Court for further
proceedings.
II. FACTS AND PROCEDURAL HISTORY
This action arose from tragic events on March 26, 2005,
when a PC-12 turboprop aircraft that Pilatus had manufactured
crashed while attempting to land in State College, Pennsylvania.
The plane, piloted by Jeffrey Jacober, was carrying five
passengers, and all six people on the plane were killed. At the
time of the crash, the plane had been making a planned stop in
Pennsylvania on its way from Florida to Rhode Island, where
the six persons lived. This action, among others, followed.2
The plaintiffs, now the appellants, are Rhode Island citizens and
are the representatives of the decedents’ Rhode Island estates.
A. The Manufacture and Distribution of PC-12s
Pilatus is a Swiss company based in Stans, Switzerland,
where it has designed and manufactured single-engine aircraft
since 1939. Pilatus makes planes for both the general aviation
and military training aircraft markets. The PC-12 is a single-
engine turboprop aircraft designed for the civilian, general
2
The six plaintiffs each filed a separate action against the
same defendants, but the District Court consolidated the cases.
As a matter of convenience, we refer to the actions as a single
case.
5
aviation market.
The majority of Pilatus’s PC-12s ultimately are sold in
the United States. In fact, Pilatus’s Annual Report 2006
(“Annual Report”) describes the United States as “unrivalled”
among purchasers of PC-12s, having taken delivery of nearly
two-thirds of the 670 PC-12s that Pilatus had built to date. App.
at 103. Pilatus makes all sales of the PC-12 in the United States
through its Colorado-based United States subsidiary, Pilatus
Business Aircraft, Ltd. (“PilBAL”), which is responsible for all
PC-12 sales in North and South America. PilBAL buys the
planes from Pilatus, then sells them to contracted independent
dealers, which, in turn, market and sell the PC-12s to retail
customers in their respective geographic areas. Pilatus is not
involved directly in the United States in the sale of its planes, as
PilBAL and its independent dealers are responsible for the
advertising and marketing of the PC-12s in this country.
Moreover, Pilatus does not perform any maintenance in the
United States on the planes it has manufactured. Pilatus asserts
that it generally is not aware of when and where new PC-12s are
sold to retail buyers after PilBAL purchases the planes, and that
it generally is not aware of any subsequent resales of its planes.3
3
Pilatus’s own statements, however, belie its attempts to
appear entirely disconnected from end-customers. In its Annual
Report, Pilatus writes:
Pilatus Aircraft in Stans is also a home base . . .
for all our PC-12 customers worldwide. Because
they know that whatever happens, they can
expect support from Stans around the clock. This
6
Similarly, PilBAL claims that it generally is not aware of when
and where the independent dealers ultimately sell the planes in
their multi-state territories.
To obtain Federal Aviation Administration (“FAA”)
certification allowing PC-12 planes to be registered and flown
in the United States, Pilatus equips its PC-12s with a stick-
pusher system intended to prevent the planes from stalling and
entering a spin, which would create a significant risk of
crashing. The turboprop aircraft at issue in this case, Pilatus
PC-12 S/N 299, included such a system. Appellants allege that
the subject aircraft crashed because of the failure of its stick-
pusher system and/or other components, as well as systems
manufactured by other defendants not involved in this appeal.
In 1999, Pilatus manufactured the aircraft involved in the
Pennsylvania crash at its Stans, Switzerland, facilities.
Thereafter Pilatus sold the aircraft to a French buyer. Its owner
then resold the plane to a Swiss company (not Pilatus), which
resold it to a Massachusetts company. The Massachusetts
company brought the plane to the United States in the spring of
2003 and sold it to J2W Aviation, LLC, a Rhode Island
always has been and will continue to be our
philosophy.
App. at 92. Confirming that it does not sever all ties to its
planes when they leave the factory, Pilatus also states on its
website that “[o]ur customer support is among the best in
aviation and we are proud to offer this service around the globe
over the lifecycle of a product.” Id. at 80.
7
company which based the aircraft in Rhode Island. Pilatus was
not involved in any of the aircraft’s resales, and its only contact
with the plane after its original sale was some maintenance of it
in Switzerland at the request of its then owners. Pilatus,
however, had no contact with the aircraft after it left Europe.
B. Contacts with Pennsylvania
Pilatus contends that appellants cannot sue it in
Pennsylvania because Pilatus has had almost no contacts within
Pennsylvania. In this regard, it is undisputed that Pilatus never
has had offices, mailing addresses, telephone numbers, facilities,
employees, officers, directors, owners, shareholders, agents,
assets, investments, bank accounts, or subsidiaries in
Pennsylvania; Pilatus never has owned, leased, or used real
property in Pennsylvania; and Pilatus never has registered to do
business in Pennsylvania. In the last five years, Pilatus has not
sold any aircraft to purchasers in Pennsylvania or shipped
anything directly to persons or entities in Pennsylvania.4 Pilatus
has not advertised or marketed its products in Pennsylvania and
did not design the PC-12 for the Pennsylvania market
specifically, although it did target the United States market
generally by designing the plane to ensure its compliance with
FAA requirements. Within the five years preceding this
4
We are not implying that before the five-year period it made
such sales or shipments. We also note that the five-year period
as such has no particular significance, but we refer to that period
throughout our discussion of Pilatus’s contacts within
Pennsylvania because it is the time frame that Pilatus used in the
affirmations it filed with its motion to dismiss.
8
litigation, however, Pilatus did have some direct contacts within
Pennsylvania. In the early 2000s, Pilatus sent two employees to
view displays at a potential supplier in Pennsylvania that Pilatus
never used. Moreover, Pilatus purchased $1,030,139 in
products, equipment, or services5 from suppliers in
Pennsylvania, an amount that represented less than one percent
of Pilatus’s total annual purchases for an approximately five-
year period.
PilBAL also had some contacts within Pennsylvania
during this time. From 2003 to 2007, PilBAL sold $600,000
worth of spare airplane parts to its independent dealer serving
Pennsylvania, a Maryland company called SkyTech, Inc. At
SkyTech’s request, PilBAL shipped parts directly to
Pennsylvania customers. In 2005, PilBAL paid $12,705.80 to
place an advertisement in five or six6 issues of Police and
Security News, a national publication with offices in
Quakertown, Pennsylvania.
The record does not contain any evidence of sales of
PC-12s in Pennsylvania by Pilatus, PilBAL, or SkyTech.
5
The record does not specify what products, equipment, or
services Pilatus purchased from Pennsylvania suppliers.
6
An affirmation of Martha Geisshuesler, an officer of PilBAL,
in the record is unclear with respect to how many times the
advertisement ran. It notes that “[t]he advertisement ran in five
issues,” but that “PilBAL paid $12,705.80 for the six spots.”
App. at 173. The difference is of no significance on this appeal.
9
Nevertheless, an owner-operator list that Pilatus maintains for
warranty purposes shows that some of its planes have ended up
in Pennsylvania and some may have been resold there. At the
time of Pilatus’s motion to dismiss, four PC-12s and four other
Pilatus planes were based in Pennsylvania,7 but the record does
not show how the four PC-12s reached Pennsylvania.
C. Contacts with Colorado
Although Pilatus itself8 is not registered to do business in
Colorado, it conducts nearly $200 million9 in annual business
there in transactions with PilBAL, its wholly-owned, Colorado-
based subsidiary, which it founded specifically to provide
“completions, marketing, sales, and service for Pilatus aircraft
in North and South America.” App. at 83. Pilatus’s relationship
with Colorado is highly profitable, and in 2005 and 2006,
7
There is some confusion in the record as to whether four or
seven PC-12s are registered in Pennsylvania, but the parties
seem to believe that seven is the correct number. The outcome
of this appeal does not depend on four or seven being the correct
number.
8
Because appellants have not pleaded sufficient facts to
support a finding to the contrary, we treat Pilatus and PilBAL as
distinct corporate entities.
9
According to Pilatus’s Annual Report, PilBAL grossed just
over 245 million Swiss francs in each of 2005 and 2006, which
converted to nearly $200 million per year based on the
conversion rates listed in the report for those years.
10
approximately half of Pilatus’s revenue originated with PilBAL.
According to Pilatus’s Annual Report, PilBAL, “[a]s in past
years . . . made the biggest contribution to the total annual sales
figures” of the company, selling 61 PC-12s, or over two-thirds
of the 90 such aircraft sold in 2006, while at the same time
receiving a record number of orders for new aircraft as well. Id.
at 105. Of the 61 aircraft PilBAL sold, 54 were sold in the
United States. The report indicates that more than 430 of the
600-plus PC-12s in operation worldwide had been completed10
and delivered in the United States, and that PilBAL’s gross sales
had amounted to 53.1% of Pilatus’s overall gross sales in 2005
and 43% in 2006.
D. The District Court’s Decision
Appellants brought this action on March 22, 2007, when
they sued Pilatus and several manufacturers of the aircraft’s
component parts in the United States District Court for the
Eastern District of Pennsylvania, asserting against each
defendant claims predicated on products liability, negligence,
and breach of warranty. On December 7, 2007, Pilatus moved
to dismiss the complaint for lack of personal jurisdiction under
Fed. R. Civ. P. 12(b)(2), among other grounds, and filed
supporting affirmations. Appellants did not request
jurisdictional discovery to oppose the motion, but, instead, relied
on publicly available information for that purpose.
Consequently, the jurisdictional facts the parties submitted on
the motion essentially are undisputed.
10
The record does not describe the services PilBAL performed
in the “completion” of PC-12s in Colorado.
11
Nearly two weeks after oral argument on the motion to
dismiss in the District Court, appellants filed an action in the
United States District Court for the District of New Hampshire
against Pilatus asserting the same claims that it has made in this
case.11 In New Hampshire, however, appellants requested to
have the opportunity to pursue jurisdictional discovery, and the
court has granted that request. See D’Jamoos v. Pilatus Aircraft,
Ltd., No. 08-108, 2008 U.S. Dist. LEXIS 96562 (D.N.H. Nov.
25, 2008). One day after its New Hampshire filing, appellants
moved in the Pennsylvania District Court to transfer this action
to Colorado pursuant to 28 U.S.C. § 1631.
On April 30, 2008, the District Court granted Pilatus’s
motion to dismiss and denied appellants’ motion to transfer the
action to Colorado. Based on the undisputed factual record, the
Court found that Pennsylvania lacked specific jurisdiction over
Pilatus in this action. D’Jamoos, 2008 U.S. Dist. LEXIS 35181,
at *10-21. Noting that the aircraft had entered Pennsylvania via
a series of third-party resales unconnected to Pilatus, the Court
found that Pilatus lacked the requisite minimum contacts within
Pennsylvania to support the exercise of specific jurisdiction.
The Court concluded that Pilatus had not purposefully availed
itself of the privilege of conducting business within
Pennsylvania, and that “[t]his single, isolated incident involving
a product that Pilatus sold in Europe is not enough to support
jurisdiction in Pennsylvania.” Id. at *15-16. The Court also
found that the factual record did not support personal
11
Appellants also sued the plane’s aircraft maintenance
company in New Hampshire, but we are not concerned with the
theory of the claim against it.
12
jurisdiction over Pilatus under any of the Supreme Court’s
stream-of-commerce tests, and that, in any event, a stream-of-
commerce analysis was “not entirely apposite in this case,
because the subject aircraft did not enter Pennsylvania through
any stream of commerce.” Id. at *19.
The District Court also concluded that neither Pilatus nor
PilBAL had the “continuous and systematic” contacts necessary
to subject Pilatus to general jurisdiction in Pennsylvania. Id. at
*22. Finally the Court denied the motion to transfer, concluding
that appellants failed to show that Colorado had general
jurisdiction over Pilatus, much less the other remaining
defendants. Id. at *27-37.
Although the dismissal of Pilatus from the action did not
complete the litigation, as it still was pending against the other
defendants, the District Court subsequently entered final
judgment in its favor pursuant to Fed. R. Civ. P. 54(b).
Appellants then timely appealed from that judgment to this
Court. The District Court has stayed the case pending
disposition of this appeal.
III. JURISDICTION AND STANDARD OF REVIEW
The District Court’s subject-matter jurisdiction rested on
diversity of citizenship between appellants and each of the eight
defendants, including Pilatus, pursuant to 28 U.S.C. §
1332(a)(2). We have appellate jurisdiction under 28 U.S.C. §
1291. We exercise plenary review over the District Court’s
13
determination that Pennsylvania lacked personal jurisdiction
over Pilatus. See O’Connor v. Sandy Lane Hotel Co., 496 F.3d
312, 316 (3d Cir. 2007). Similarly, because the Court based its
denial of the transfer motion solely on its conclusion of law that
Colorado courts would lack personal jurisdiction over Pilatus,
we also review that determination de novo.
IV. DISCUSSION
Appellants challenge the District Court’s decision: (1)
granting Pilatus’s motion to dismiss for lack of personal
jurisdiction, and (2) denying appellants’ motion to transfer the
action to Colorado pursuant to 28 U.S.C. § 1631. We will deal
with each issue in turn.
A. Specific Jurisdiction Over Pilatus in Pennsylvania
Once a defendant challenges a court’s exercise of
personal jurisdiction over it, the plaintiff bears the burden of
establishing personal jurisdiction. Gen. Elec. Co. v. Deutz AG,
270 F.3d 144, 150 (3d Cir. 2001). However, inasmuch as the
District Court in this case did “not hold an evidentiary hearing
. . . , the plaintiff[s] needed only [to] establish a prima facie case
of personal jurisdiction and the plaintiff[s were] entitled to have
[their] allegations taken as true and all factual disputes drawn in
[their] favor.” Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93,
97 (3d Cir. 2004).
“A federal district court may assert personal jurisdiction
14
over a nonresident of the state in which the court sits to the
extent authorized by the law of that state.” Provident Nat’l
Bank v. Cal. Fed. Sav. & Loan Ass’n, 819 F.2d 434, 436 (3d
Cir. 1987). Because this case comes on before this Court on an
appeal from the United States District Court for the Eastern
District of Pennsylvania, we apply the Pennsylvania long-arm
statute, which provides for jurisdiction “based on the most
minimum contact with th[e] Commonwealth allowed under the
Constitution of the United States.” 42 Pa. Cons. Stat. Ann. §
5322(b) (West 2004); see O’Connor, 496 F.3d at 316.
Accordingly, in determining whether there is personal
jurisdiction, we ask whether, under the Due Process Clause,
Pilatus has “certain minimum contacts with [Pennsylvania] such
that the maintenance of the suit does not offend traditional
notions of fair play and substantial justice.” Int’l Shoe Co. v.
Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945)
(internal quotation marks omitted).
There are two types of personal jurisdiction, general
jurisdiction and specific jurisdiction, the second of which is
concerned solely with the jurisdiction in the action at bar. See
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.
408, 414-15, 104 S. Ct. 1868, 1872 (1984). Thus, it is entirely
possible that a court might have personal jurisdiction in a
particular case over a defendant but not have jurisdiction over it
in other cases. Inasmuch as appellants do not contend on this
appeal that Pilatus’s contacts within Pennsylvania support the
exercise of general jurisdiction over it, the issue before us is
whether Pilatus is subject to specific jurisdiction in this action
15
in Pennsylvania.12
In determining whether there is specific jurisdiction, we
undertake a three-part inquiry. First, the defendant must have
“purposefully directed [its] activities” at the forum. Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S. Ct. 2174,
2182 (1985) (internal quotation marks omitted). Second, the
litigation must “arise out of or relate to” at least one of those
activities. Helicopteros, 466 U.S. at 414, 104 S.Ct. at 1872;
O’Connor, 496 F.3d at 317. And third, if the first two
requirements have been met, a court may consider whether the
exercise of jurisdiction otherwise “comport[s] with ‘fair play
and substantial justice.’” Burger King, 471 U.S. at 476, 105
S.Ct. at 2184 (quoting Int’l Shoe, 326 U.S. at 320, 66 S.Ct. at
160).
The first two parts of the test determine whether a
defendant has the requisite minimum contacts with the forum.
The threshold requirement is that the defendant must have
“purposefully avail[ed] itself of the privilege of conducting
activities within the forum State.” Hanson v. Denckla, 357 U.S.
235, 253, 78 S. Ct. 1228, 1240 (1958). To meet this
requirement, the defendant’s physical entrance into the forum is
not necessary. See Burger King, 471 U.S. at 476, 105 S.Ct. at
2184; Grand Entm’t Group, Ltd. v. Star Media Sales, Inc., 988
F.2d 476, 482 (3d Cir. 1993). A defendant’s contacts, however,
must amount to “a deliberate targeting of the forum.”
12
In the District Court appellants did argue that the
Pennsylvania District Court had both specific and general
jurisdiction over Pilatus.
16
O’Connor, 496 F.3d at 317. The “unilateral activity of those
who claim some relationship with a nonresident defendant” is
insufficient. Hanson, 357 U.S. at 253, 78 S.Ct. at 1239-40.
The record before us conclusively establishes that
Pilatus’s direct contacts within Pennsylvania are quite limited.
Certainly, the aircraft at issue in this case entered
Pennsylvania’s airspace and crashed there, and all six people on
board were killed in Pennsylvania. Yet we cannot link these
events to Pilatus’s deliberate activities aimed at Pennsylvania.
Although Pilatus designed and manufactured the subject aircraft,
it did so in Switzerland and then sold the plane in Europe.13 The
aircraft later reached the United States via a series of third-party
resales in which Pilatus was not involved, only arriving in
Pennsylvania because it was making a stopover on an interstate
flight. Pilatus did not profit from activities in Pennsylvania as
a result of the aircraft’s initial sale or resales. And although a
small number of Pilatus’s PC-12s are based in Pennsylvania,
there is no record evidence indicating how those planes reached
Pennsylvania. Certainly, we have no basis to believe that
Pilatus sent the planes to Pennsylvania.
Appellants contend that by designing and manufacturing
its planes to meet FAA standards, Pilatus purposefully availed
13
Though the District Court said that the sale was in
Switzerland, we do not know in a strict legal sense whether the
sale was in France or Switzerland (or possibly elsewhere), but
this point is of no significance on this appeal as the sale surely
was not in Pennsylvania or, for that matter, in the United States.
17
itself of Pennsylvania law inasmuch as FAA standards govern
aviation in Pennsylvania. Further, appellants argue that Pilatus
benefitted from the fact that the State of Pennsylvania could not
exclude the plane from its airspace, a fact on which Pilatus
relied and profited when it sold the plane to a French buyer.14
Of course, these arguments could apply to a claim that there
would be jurisdiction over Pilatus in any state in the nation;
indeed, appellants claim that because Pilatus targets the United
States market as a whole, it has a purposeful affiliation with
every state and must expect to be sued in any state where one of
its aircraft crashes.
We acknowledge that there is a certain reasonableness to
an argument that a manufacturer should be subject to suit in a
jurisdiction in which its plane crashes if the suit charges that a
manufacturing defect caused the crash. After all, would it be
fair in a case in which an uninvolved person on the ground
suffered a loss by reason of a plane crash to require that person
to bring his or her damage action in some other possibly far-
away jurisdiction? Yet it is clear that the critical finding that the
defendant purposefully availed itself of the privilege of
conducting activities within the forum requires contacts that
amount to a deliberate reaching into the forum state to target its
citizens. See Burger King, 471 U.S. at 475-76, 105 S.Ct. at
14
We do not think that the factual basis for appellants’
argument is farfetched; it would be useful for a potential
European buyer who intended to use the airplane in Europe,
when considering whether to make the purchase, to take into
account the places in which there could be a resale market for
the plane.
18
2184; O’Connor, 496 F.3d at 317-18. Pilatus’s efforts to exploit
a national market necessarily included Pennsylvania as a target,
but those efforts simply do not constitute the type of deliberate
contacts within Pennsylvania that could amount to purposeful
availment of the privilege of conducting activities in that state.
Rather, any connection of Pilatus to Pennsylvania merely was a
derivative benefit of its successful attempt to exploit the United
States as a national market.
We are aware of appellants’ argument that the subject
aircraft’s value (and thus Pilatus’s initial profit) was enhanced
by the fact that the aircraft could travel in or be sold in
Pennsylvania, but the Supreme Court in World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S. Ct. 559
(1980), rejected a parallel argument. In Woodson, which
addressed the New York sale by a New York retailer of an
automobile that ultimately caused injury in Oklahoma, the
plaintiffs argued “that the purchase of automobiles in New
York, from which the petitioners earn substantial revenue,
would not occur but for the fact that the automobiles are capable
of use in distant States like Oklahoma.” Id. at 298, 100 S.Ct. at
568. The Court concluded that
financial benefits accruing to the defendant from
a collateral relation to the forum State will not
support jurisdiction if they do not stem from a
constitutionally cognizable contact with that
State. In our view, whatever marginal revenues
petitioners may receive by virtue of the fact that
their products are capable of use in Oklahoma is
far too attenuated a contact to justify that State’s
19
exercise of in personam jurisdiction over them.
Id. at 299, 100 S.Ct. at 568 (citation omitted). We acknowledge
that the PC-12 is a highly mobile product capable of crossing
international and state lines and that Pilatus designed it
specifically to meet federal requirements that were a prerequisite
to its use in all 50 states. Nonetheless, although the
circumstance that the State of Pennsylvania cannot exclude
Pilatus’s planes is beneficial to Pilatus, the State of
Pennsylvania does not confer that benefit, and the benefit
“do[es] not stem from a constitutionally cognizable contact with
that State.” See id.
Pilatus’s direct contacts within Pennsylvania, then, are
limited to: (1) sending two employees to Pennsylvania to view
displays at a potential supplier, and (2) purchasing $1,030,139
in goods or services from suppliers in Pennsylvania during the
five-year period preceding this litigation. But even if these
contacts could constitute purposeful availment of the privilege
of conducting activities in Pennsylvania, appellants do not allege
that their claims “arise out of or relate to” these direct contacts
within Pennsylvania, see Helicopteros, 466 U.S. at 414, 104
S.Ct. at 1872, and the record could not support a finding that
they did. Therefore, appellants cannot satisfy the second stage
of the minimum contacts inquiry, which requires appellants to
establish that their claims arise out of or relate to at least one of
Pilatus’s purposeful contacts with the forum.
As an alternative basis for supporting jurisdiction,
appellants contend that Pilatus has minimum contacts within
Pennsylvania under a stream-of-commerce theory. Courts have
20
relied on the stream-of-commerce theory to find a basis for
personal jurisdiction over a non-resident defendant, often a
manufacturer or distributor, which has injected its goods into the
forum state indirectly via the so-called “stream of commerce.”15
See Pennzoil Prods. Co. v. Colelli & Assocs., 149 F.3d 197, 203
(3d Cir. 1998); Max Daetwyler Corp. v. R. Meyer, 762 F.2d
290, 298-300 (3d Cir. 1985).
Appellants contend that Pilatus injected its planes into the
15
In Asahi Metal Industry Co. v. Superior Court, 480 U.S.
102, 107 S. Ct. 1026 (1987), the Supreme Court sought to clarify
the elements of jurisdiction under the stream-of-commerce
theory. A majority of the Court, however, could not agree on
the contours of what constitutes “purposeful availment” in the
stream-of-commerce context, and thus its fragmentation did not
allow the adoption of bright-line rules. The two plurality
opinions in Asahi, Justice O’Connor’s and Justice Brennan’s,
produced two distinct frameworks for the minimum contacts
analysis as it relates to stream-of-commerce theory, and we have
not had occasion to choose between the O’Connor and Brennan
positions. See Pennzoil Prods. Co. v. Colelli & Assocs., 149
F.3d 197, 207 n.13 (3d Cir. 1998) (concluding that “[s]ince the
facts of this case satisfy the standards of both Asahi Metal
pluralities, we do not have occasion to select one standard or the
other as the law of this circuit”); Renner v. Lanard Toys Ltd., 33
F.3d 277, 283-84 (3d Cir. 1994) (remanding for further
discovery without reaching the issue of which Asahi standard
should control). Once again, we need not decide this issue; as
we will discuss, a stream-of-commerce analysis is inapposite on
the facts presented here.
21
stream of commerce expecting that they would reach the United
States. By adding to that contention the highly mobile nature of
the PC-12, which is designed for interstate travel and which
Pilatus promotes as an “‘SUV’ of the skies,” App. at 94,
appellants argue it was wholly foreseeable to Pilatus that one of
its planes ultimately could cause injury in Pennsylvania. But
even if we accept these contentions, the stream-of-commerce
theory does not provide a basis for jurisdiction in this case.
As an initial matter, “‘foreseeability’ alone has never
been a sufficient benchmark for personal jurisdiction under the
Due Process Clause.” Woodson, 444 U.S. at 295, 100 S.Ct. at
566. Instead, the foreseeability that is critical to due process
analysis is not the mere likelihood that a product will find its
way into the forum State. Rather, it is that the defendant’s
conduct and connection with the forum State are such that he
should reasonably anticipate being haled into court there. Id. at
297, 100 S.Ct. at 567. As we noted above, Pilatus’s “conduct
and connection with” Pennsylvania fail to meet this standard.
See id. Moreover, the Supreme Court in Woodson squarely
dismissed the contention appellants make in this case that the
foreseeability analysis necessarily is influenced by the highly
mobile nature of the product at issue. Id. at 296 n.11, 100 S. Ct.
at 567 n.11 (“[W]e see no difference for jurisdictional purposes
between an automobile and any other chattel.”).
In any event, it is absolutely fatal to appellants’ stream-
of-commerce argument that the subject aircraft did not actually
enter Pennsylvania through a “stream of commerce” as that term
is generally understood — i.e., “the regular and anticipated flow
22
of products from manufacture to distribution to retail sale.” See
Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 117,
107 S. Ct. 1026, 1034 (1987) (Brennan, J., concurring). Any
“stream” of planes from Pilatus to Pennsylvania would begin
with Pilatus’s manufacture of them and be followed by Pilatus’s
sale to them to PilBAL. Then PilBAL would distribute the
planes to SkyTech, and finally SkyTech would sell the planes to
buyers in Pennsylvania. It is by this path - from the Swiss
manufacturing facility to PiBAL to regional dealer to end
purchaser - that Pilatus targets the American market and intends
and expects its aircraft to reach customers in the United States,
including, arguably, those in Pennsylvania.
If the claim in this case had arisen out of these efforts to
serve, even indirectly, the Pennsylvania market, then it would
make sense to evaluate Pilatus’s conduct under the stream-of-
commerce theory. See Woodson, 444 U.S. at 297, 100 S. Ct. at
567 (stating that, if the sale of a product “arises from the efforts
of the manufacturer or distributor to serve, directly or indirectly,
the market for its product in other States, it is not unreasonable
to subject it to suit in one of those States if its allegedly
defective merchandise has there been the source of injury to its
owner or to others”). It is undisputed, however, that the aircraft
involved in this case did not follow the foregoing regular and
anticipated path to Pennsylvania. Rather, Pilatus sold the
aircraft to a French buyer who resold it to a Swiss company (not
Pilatus) that, in turn, resold it to a Massachusetts company that
brought it to the United States and sold it to the Rhode Island
company, its owner at the time of the accident.
By arguing that a stream-of-commerce analysis could
23
support jurisdiction even when the product at issue did not go
through the “stream,” appellants essentially ask us to find that
the stream-of-commerce theory provides an independent source
of personal jurisdiction over Pilatus, a source unrelated to
appellants’ claims. However, the fact that other Pilatus planes
have followed a certain path to Pennsylvania and other states
cannot provide the necessary connection between Pilatus and
Pennsylvania to support specific jurisdiction in this case,
because the aircraft involved here reached Pennsylvania by a
series of fortuitous circumstances independent of any
distribution channel Pilatus employed. If we held otherwise, we
impermissibly would remove the “arising from or related to”
requirement from the specific jurisdiction test and unjustifiably
would treat the stream-of-commerce theory as a source of
general jurisdiction. See Purdue Research Found. v. Sanofi-
Synthelabo, S.A., 338 F.3d 773, 788 (7th Cir. 2003) (holding
that stream-of-commerce theory “is relevant only to the exercise
of specific jurisdiction; it provides no basis for exercising
general jurisdiction over a nonresident defendant”); Bearry v.
Beech Aircraft Co., 818 F.2d 370, 375 (5th Cir. 1987) (“A
conclusion that there is a stream of commerce ensures that the
contact that caused harm in the forum occurred there through the
defendant’s conduct and not the plaintiff’s unilateral activities;
it does not ensure that defendant’s relationship with the forum
is continuous and systematic, such that it can be sued there for
unrelated claims.”).
Because we conclude that appellants fail to establish that
Pilatus had the required minimum contacts within Pennsylvania,
we do not consider, under the third prong of a specific
jurisdiction analysis, whether the exercise of specific
24
jurisdiction over Pilatus “would comport with ‘fair play and
substantial justice.’” Burger King, 471 U.S. at 476, 105 S.Ct. at
2184 (quoting Int’l Shoe, 326 U.S. at 320, 66 S.Ct. at 160).
B. General Jurisdiction over Pilatus in Colorado
Appellants also challenge the District Court’s denial of
its motion to transfer the case to Colorado pursuant to 28 U.S.C.
§ 1631. Under section 1631, when a district court finds that it
is lacking jurisdiction,
the court shall, if it is in the interest of justice,
transfer such action or appeal to any other such
court in which the action or appeal could have
been brought at the time it was filed or noticed,
and the action or appeal shall proceed as if it had
been filed in or noticed for the court to which it is
transferred on the date upon which it was actually
filed in or noticed for the court from which it is
transferred.
28 U.S.C. § 1631; see also Island Insteel Sys., Inc. v. Waters,
296 F.3d 200, 218 & n.9 (3d Cir. 2002) (noting that section
1631 permits transfer for lack of in personam jurisdiction).
Inasmuch as the District Court concluded that appellants failed
to show that Colorado had personal jurisdiction over Pilatus,
much less the other defendants, it believed that it could not
transfer the case to Colorado as section 1631 permits a transfer
of a case only to a court in which the case originally could have
been brought. In concluding that Colorado did not have
personal jurisdiction over Pilatus, the Court rejected Pilatus’s
25
ownership of PilBAL, its Colorado-based subsidiary, as a basis
for jurisdiction. Because the Court predicated its denial of
appellants’ motion solely on its conclusion that Colorado lacked
personal jurisdiction over Pilatus, that determination is a
conclusion of law over which we exercise plenary review.
Inasmuch as district courts may exercise personal
jurisdiction over nonresident defendants to the extent authorized
under the law of the forum state in which the district court sits,
Provident National Bank, 819 F.2d at 436, we look to Colorado
law to determine whether a Colorado court could exercise
jurisdiction over Pilatus. Colorado’s long-arm statute, like
Pennsylvania’s with respect to its courts, extends the jurisdiction
of Colorado courts to the maximum limit permitted by the due
process clauses of the United States and the state, i.e., Colorado,
constitutions. Goettman v. N. Fork Valley Rest. (In re
Goettman), 176 P.3d 60, 67 (Colo. 2007). If the exercise of
jurisdiction is consistent with due process, Colorado’s long-arm
statute therefore authorizes a court to exercise jurisdiction over
a defendant. Id.
Inasmuch as appellants do not contend that the Colorado
courts would have specific jurisdiction in this case, but, instead
contend that the Colorado courts have general jurisdiction over
Pilatus, we turn our focus to that basis for the exercise of
personal jurisdiction. General jurisdiction depends on a
defendant having maintained “continuous and systematic”
contacts with the forum state. Helicopteros, 466 U.S. at 415-16,
104 S. Ct. at 1872-73. In determining whether a foreign
corporate defendant has the requisite continuous and systematic
contacts with the forum, the Court of Appeals for the Tenth
26
Circuit considers: (1) whether the corporation solicits business
in the state through a local office or agents; (2) whether the
corporation sends agents into the state on a regular basis to
solicit business; (3) the extent to which the corporation holds
itself out as doing business in the forum state through
advertisements, listings or bank accounts; and (4) the volume of
business conducted in the state by the corporation. See Doering
v. Copper Mountain, Inc., 259 F.3d 1202, 1210 (10th Cir. 2001);
Kuenzle v. HTM Sport-Und Freizeitgerate AG, 102 F.3d 453,
457 (10th Cir. 1996).
We are satisfied that the record demonstrates that
appellants have established a prima facie basis for a conclusion
that a Colorado court may exercise general jurisdiction over
Pilatus predicated on its direct contacts within Colorado or,
alternatively, on the conduct of PilBAL as its agent.
The record supports a finding that Pilatus maintains
substantial direct contacts with Colorado through the nearly
$200 million in annual business it conducts with PilBAL, its
wholly-owned subsidiary based in Broomfield, Colorado,
though we recognize that volume of business alone is not
dispositive of the jurisdictional question. See Helicopteros, 466
U.S. at 418, 104 S.Ct. at 1874 (holding that mere purchases
from suppliers in the forum state and incidental related contacts
were not sufficiently substantial to support the exercise of
general jurisdiction). Contrary to the findings of the District
Court, however, it is clear that PilBAL is far more to Pilatus
than just a good customer. As Pilatus’s only United States
subsidiary, PilBAL’s raison d’être is “to provide completions,
marketing, sales, and service for Pilatus aircraft in North and
27
South America.” App. at 83. PilBAL is responsible for
marketing and sales of only one of Pilatus’s products, the PC-
12. The PC-12s that PilBAL buys from Pilatus are sent from
Switzerland to PilBAL’s facilities in Colorado, where PilBAL
actually “completes” the aircraft before selling them to its
network of independent dealers throughout North and South
America. In the normal course of business, therefore, Pilatus
sells and transports or has transported to Colorado every PC-12
aircraft destined for an end-customer in the Americas.
Moreover, Pilatus’s Annual Report emphasizes that “[n]or were
[PilBAL’s] activities in the 2006 business year merely restricted
to selling.” Id. at 105. Rather, “[t]he company worked
intensively on technical innovations and new developments,”
launching updated features for the PC-12 that included the
option of a new type of door, more advanced monitoring
equipment, and an enhanced vision system. Id.
Pilatus’s Colorado relationship is financially very
significant; in 2005 and 2006, approximately half of Pilatus’s
revenue originated with PilBAL. Pilatus’s Annual Report stated
that PilBAL “[a]s in past years . . . made the biggest contribution
to the total annual sales figures: 61 PC-12s in 2006, or just over
two-thirds of the 90 aircraft sold [worldwide].” Id. The Annual
Report indicated:
The ten-year anniversary of [PilBAL], celebrated
in Broomfield on 5 May 2006, was also a special
occasion. The following statistic exemplifies this
subsidiary’s performance: more than 430 of the
over 600 PC-12s in operation worldwide to this
date were completed and delivered in the United
28
States.
Id. In aggregate, these factors support a finding that the manner
in which Pilatus transacts a substantial portion of its annual
business within Colorado is both systematic and continuous.
Therefore, appellants have made a prima facie showing that,
given Pilatus’s direct contacts within Colorado, the exercise of
general jurisdiction over Pilatus in Colorado would comport
with due process.
Alternatively, in analyzing the relationship between
Pilatus and PilBAL according to principles of agency, we
recognize that for a plaintiff to defeat a motion to dismiss for
lack of personal jurisdiction when the plaintiff relies on agency
theory, it “need only make a prima facie showing of the
connection between the actions of the agent and the principal.”
In re Goettman, 176 P.3d at 68. Based on the record before us,
we find sufficient information to support a prima facie showing
that the courts in Colorado can exercise general jurisdiction over
Pilatus under agency principles.
The concept underlying the agency theory of personal
jurisdiction is the familiar principle that a principal is
responsible for the actions of its agent. Id. at 67. “[A]s all
corporations must necessarily act through agents, a wholly
owned subsidiary may be an agent and when its activities as an
agent are of such a character as to amount to doing business of
the parent, the parent is subjected to the in personam jurisdiction
of the state in which the activities occurred.” Curtis Publishing
Co. v. Cassel, 302 F.2d 132, 137 (10th Cir. 1962); accord First
Horizon Merch. Servs. v. Wellspring Capital Mgmt., LLC, 166
29
P.3d 166, 177 (Colo. Ct. App. 2007).
As we have noted, Pilatus founded PilBAL “to provide
completions, marketing, sales, and service for Pilatus aircraft in
North and South America.” App. at 83. By serving as its
United States-based middleman, PilBAL enables Pilatus to
reach the large United States market, which its Annual Report
makes clear is critical to Pilatus’s core business. Pilatus,
meanwhile, is not merely a disinterested holding company, with
ownership of diversified corporate investments — Pilatus is in
the business of manufacturing and selling airplanes.16 Compare
SGI Air Holdings II LLC v. Novartis Int’l AG, 239 F. Supp. 2d
1161, 1169 (D. Colo. 2003) (finding agency relationship
sufficient to support exercise of personal jurisdiction where
subsidiary’s business mirrored a “core business” of parent) with
Quarles v. Fuqua Indus., Inc., 504 F.2d 1358, 1364 (10th Cir.
1974) (finding no jurisdictional predicate where subsidiary, an
operator of adult vocational training schools, did not engage in
parent holding company’s “business of diversified corporate
investments”). These facts support the conclusion that PilBAL
exists to conduct Pilatus’s business in North and South America.
Moreover, as the exclusive Pilatus subsidiary in the Americas —
Pilatus’s most significant territory by far — PilBAL fairly could
be described as the “source of life” to Pilatus’s operations. See
Curtis Publishing, 302 F.2d at 136, 138 (finding that subsidiary
was agent of parent for jurisdictional purposes where the
subsidiary had exclusive rights to distribute the parent’s
16
Additionally, the same individual serves as Chairman of the
Board of Directors for both Pilatus and PilBAL, and the former
CEO of PilBAL later became the CEO of Pilatus.
30
magazines worldwide; because circulation of its publications
was the “source of life” to parent, subsidiary was conducting
parent’s business); SGI, 239 F. Supp. 2d at 1169 (where
subsidiary’s business was “essential” to parent’s business,
parent had “assumed the risks” of subsidiary’s business ventures
and, thus, subsidiary was general agent of parent for
jurisdictional purposes).
The record makes it clear that the business PilBAL is
conducting drives Pilatus’s manufacturing activities. In 2006,
demand for the PC-12 “far exceeded supply,” App. at 105, and
sales were limited only by the fact that Pilatus could
manufacture but 90 aircraft per year. By the end of the 2006
business year, Pilatus had received 166 orders for new PC-12s,
exceeding its production capability for 2007 and meaning that
any new customers would “have to wait one-and-a-half years
after placing their order before receiving their longed-for
PC-12.” Id. at 103. Of those orders, 121 — over 70 percent —
came through PilBAL. Pilatus, therefore, does not manufacture
aircraft in the vague hope that someone, somewhere will
purchase them; rather, it manufactures aircraft to fill specific,
pre-existing orders, most of which originate with PilBAL.17 The
fact that Pilatus’s PC-12s essentially are made-to-order
underscores PilBAL’s status as the “source of life” to Pilatus’s
operations. In sum, we find the record evidence pertaining to
agency sufficient to establish prima facie that PilBAL’s
activities in Colorado amount to doing the business of Pilatus,
17
In fact, the Annual Report even suggests that PC-12s can be
ordered with personalized options, including paint in company
colors.
31
and that a Colorado court therefore could exercise general
jurisdiction over Pilatus.18
C. Requirements for Transfer
Although we conclude that this action could have been
18
We are aware that the Colorado Supreme Court recently
rejected the exercise of general jurisdiction in Colorado, under
agency principles, in a case involving a parent-subsidiary
relationship similar to that between Pilatus and PilBAL. See In
re Goettman, 176 P.2d at 68. In Goettman, the subsidiary was
the sole United States purchaser and distributor of its Australian
parent’s products. However, the subsidiary was not based in
Colorado, but was headquartered in Pennsylvania and
incorporated in Delaware. The Goettman court, moreover,
discussed only two contacts within Colorado — (1) the
subsidiary’s sale and distribution of one product to a Colorado
company, and (2) the dispatch of two technical support people,
one from the parent and one from the subsidiary, to Colorado to
service that product. Id. at 64-65. The parent’s contacts within
the forum state in Goettman, therefore, were less than the
equivalent of the direct and substantial contacts we find here,
and the case is wholly distinguishable. We recognize that the
Colorado Supreme Court did not discuss the “source of life” or
“doing business of the parent” theories, and thus we are not
certain that it would apply Curtis Publishing in the same way
that the Colorado district court did in SGI. See 239 F. Supp. 2d
at 1169. We find, nevertheless, that the facts presented here
amount to a prima facie case for general jurisdiction in
Colorado.
32
brought against Pilatus in Colorado, our conclusion only
partially satisfies the requirements for a transfer under section
1631, for a court can order a transfer only if it is “in the interest
of justice to do so,” an issue that the District Court should
address on the remand that we will direct in this case. In
deciding that question, the District Court should consider, on
either its own or appellants’ motion pursuant to Fed. R. Civ. P.
21, whether the claims as to the non-Pilatus defendants should
be severed in order to permit the transfer of the claims against
Pilatus.
The District Court believed that “[a] plaintiff must be
able to establish that personal jurisdiction exists over each
defendant in the transferee district.” 2008 U.S. Dist. LEXIS
31581, at *31 n.8. This statement truncates the required analysis
and suggests that the District Court did not realize that, under
our precedent, transfer of the entire action was not its only
option. Quite to the contrary, we have interpreted section 1631
to permit the transfer of all or only part of an action. See Miller
v. United States, 753 F.2d 270, 275-76 (3d Cir. 1985) (allowing
transfer of part of an appeal to the United States Court of
Appeals for the Federal Circuit); see also United States v.
County of Cook, 170 F.3d 1084, 1087-89 (Fed. Cir. 1999)
(concluding that transfer of less than an entire action is proper
under section 1631). But see Hill v. United States Air Force,
795 F.2d 1067, 1070-71 (D.C. Cir. 1986) (concluding that
section 1631 “directs a court to transfer an ‘action’ over which
it lacks jurisdiction, rather than an individual claim”).
Moreover, in applying 28 U.S.C. § 1404(a), which as the
District Court acknowledged is comparable to section 1631, we
have held that where a case could have been brought against
33
some defendants in the transferee district, the claims against
those defendants may be severed and transferred while the
claims against the remaining defendants, for whom transfer
would not be proper, are retained. White v. ABCO Eng’g Corp.,
199 F.3d 140, 144 (3d Cir. 1999) (“Nothing within § 1404
prohibits a court from severing claims against some defendants
from those against others and transferring the severed claims.”).
The District Court should have regarded the logic of Miller and
White as controlling here.
We recognize that Miller involved a situation in which
two different courts of appeals had subject matter jurisdiction
over different appeals of a single party’s claims. Clearly our
reasoning in White, however, encompasses the situation here.
As in White, the course of action we propose to the District
Court actually is not a partial transfer at all inasmuch as the
action, once severed, may be regarded as two or more separate
and independent actions, each of which is then transferrable —
or not — pursuant to the terms of section 1631. Thus, it is
evident that the District Court may sever the claims against
Pilatus and transfer them to Colorado, regardless of its treatment
of the claims against the non-Pilatus defendants.19
19
In so holding, we acknowledge that because appellants did
not request a severance, these issues were not framed properly
before the District Court. We also recognize that the District
Court’s discussion on the transfer subject was dicta, because its
conclusion that Colorado lacked jurisdiction over Pilatus
compelled the denial of the transfer motion as to Pilatus in any
event.
34
Nevertheless, before dividing the case, the District Court
should weigh the factors favoring transfer against the potential
inefficiency of requiring the similar and overlapping issues to be
litigated in two separate forums. See White, 199 F.3d at 144-45;
Sunbelt Corp. v. Noble, Denton & Assocs., 5 F.3d 28, 33-34 (3d
Cir. 1993) (stating that a court “‘should not sever if the
defendant over whom jurisdiction is retained is so involved in
the controversy to be transferred that partial transfer would
require the same issues to be litigated in two places’”) (quoting
Liaw Su Teng v. Skaarup Shipping Corp., 743 F.2d 1140, 1148
(5th Cir. 1984)).
In concluding, we stress that this appeal comes to us at
the motion to dismiss stage. If the District Court determines on
remand that a transfer is in the interest of justice,20 it is our view
that the court in the District of Colorado will not be bound either
procedurally or substantively by our prima facie finding of
personal jurisdiction. Rather, the court may decide upon
ordering jurisdictional discovery that it in fact lacks personal
jurisdiction over Pilatus on the basis of a more complete
evidentiary record.
V. CONCLUSION
In accordance with our foregoing analysis, we will affirm
20
The District Court may consider factors beyond the
jurisdictional point we have noted in making its interest of
justice analysis.
35
the District Court’s decision that Pennsylvania lacked personal
jurisdiction over Pilatus, we will vacate its denial of appellants’
motion to transfer the action to Colorado, and we will remand
the case to the District Court for further proceedings consistent
with this opinion, including a determination as to whether such
transfer would be in the interest of justice and whether a
severance is in order.
36