Beverly Anderson v. Dassault Aviation ( 2004 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 03-2422
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Beverly Anderson, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the Eastern
* District of Arkansas.
Dassault Aviation, *
*
Appellee. *
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Submitted: January 16, 2004
Filed: March 4, 2004
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Before WOLLMAN, MORRIS SHEPPARD ARNOLD, and COLLOTON, Circuit
Judges.
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MORRIS SHEPPARD ARNOLD, Circuit Judge.
This is a product liability suit brought by Beverly Anderson, a Michigan
resident, to recover for injuries that she suffered while working as a flight attendant
on a Dassault Falcon business jet owned by her employer, Amway Corporation. The
jet was on its descent into a Michigan airport when it underwent a series of pitch
oscillations, allegedly buffeting Ms. Anderson about in the aircraft and causing her
injuries. The jet was manufactured in France by Dassault Aviation, a French
corporation. Business jets manufactured by Dassault Aviation, which account for the
majority of the company's revenue, are sold under the trade name Falcon, and are
exclusively sold and leased in the western hemisphere by Dassault Falcon Jet
Corporation, which is a wholly owned subsidiary of Dassault Aviation. (Dassault
Aviation and various of its subsidiaries, including Dassault Falcon Jet, are known
collectively as Dassault Aviation Group.) Dassault Falcon Jet bought the jet on
which Ms. Anderson was injured from Dassault Aviation in France, and then flew the
jet to Little Rock, Arkansas, where it completed the jet and sold and delivered it to
Amway.
Ms. Anderson initially filed suit in the Western District of Michigan against
Dassault Aviation, Dassault Falcon Jet, and Honeywell, Inc. (which manufactured the
autopilot in the jet). The Michigan district court granted Dassault Aviation's motion
to dismiss for lack of personal jurisdiction, leaving Ms. Anderson's action against
Honeywell and Dassault Falcon Jet pending there. Ms. Anderson then re-filed the
suit against Dassault Aviation in the Eastern District of Arkansas. The Arkansas
district court granted Dassault Aviation's motion to dismiss for lack of personal
jurisdiction, from which Ms. Anderson now appeals. We review the dismissal for
lack of personal jurisdiction de novo. See Barone v. Rich Bros. Interstate Display
Fireworks Co., 25 F.3d 610, 612 (8th Cir. 1994), cert. denied, 513 U.S. 948 (1994).
Because we conclude that Dassault Aviation has sufficient contacts with Arkansas to
subject it to personal jurisdiction there consistent with due process, we reverse.
I.
In a diversity action, a federal court may assume jurisdiction over a nonresident
defendant only if the requirements of the forum state's long-arm statute are satisfied
and the exercise of jurisdiction comports with due process. See Burlington Indus.,
Inc. v. Maples Indus., Inc., 97 F.3d 1100, 1102 (8th Cir. 1996). Arkansas's long-arm
statute, Ark. Code Ann. § 16-4-101, gives the state's courts personal jurisdiction over
persons and claims "to the maximum extent permitted by the due process of law
clause of the Fourteenth Amendment of the United States Constitution." The only
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issue in this appeal is thus whether the due process clause permits an Arkansas court's
assertion of personal jurisdiction over Dassault Aviation.
In order for an Arkansas court to assert personal jurisdiction over Dassault
Aviation consistent with due process, Dassault Aviation must "have certain minimum
contacts" with Arkansas "such that the maintenance of the suit does not offend
326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463
(1940)). Dassault Aviation's contacts with Arkansas must be sufficient to cause it
"reasonably [to] anticipate being haled into court there." Worldwide Volkswagen
Corp. v. Woodson, 444 U.S. 286, 297 (1980). Whether due process is satisfied
depends not only on the quantity of contacts that Dassault Aviation has with
Arkansas, but also on the "quality and nature" of those contacts, see International
Shoe, 326 U.S. at 319. In assessing the nature of the contacts between Dassault
Aviation and Arkansas, appropriate circumstances to consider include the burden on
Dassault Aviation of litigating the case in Arkansas, the interests of Arkansas in
adjudicating the dispute, Ms. Anderson's interests in obtaining convenient and
effective relief, "the interstate judicial system's interest in obtaining the most efficient
resolution of controversies, and the shared interest of the several states in furthering
fundamental substantive social policies." See Falkirk Mining Co. v. Japan Steel
Works, Ltd., 906 F.2d 369, 374 (8th Cir. 1990).
II.
A.
Dassault Aviation's contacts with Arkansas result, in large part, from its
business relationship with Dassault Falcon Jet, which operates a large production site
in Little Rock that completes Falcon jets to customers' specifications. The district
court determined that Dassault Aviation itself was neither present nor doing business
in Arkansas, and that Dassault Falcon Jet's activities there were relevant to the
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jurisdictional inquiry only if Ms. Anderson could "pierce the corporate veil" and
show that Dassault Aviation's wholly owned subsidiary was actually its "alter ego."
Concluding that Dassault Aviation did not sufficiently control and dominate the
affairs of Dassault Falcon Jet to allow Dassault Falcon Jet's corporate existence to be
disregarded, the district court granted Dassault Aviation's motion to dismiss for lack
of personal jurisdiction.
The district court relied on Epps v. Stewart Info. Servs. Corp., 327 F.3d 642,
645-47 (8th Cir. 2003), in which we held that a holding company which owned stock
in various companies, including a title and guaranty company, was not subject to
personal jurisdiction in Arkansas based on the title and guaranty company's Arkansas
activities. Dassault Aviation contends that we established a bright-line rule in Epps
under which, when asking whether assertion of personal jurisdiction over a parent
corporation comports with due process, the activities of the parent's subsidiary must
be entirely disregarded unless the subsidiary's corporate veil can be pierced under
state law. We did note in Epps that the plaintiffs were unable to pierce the
subsidiary's corporate veil. See id. at 650. But in reaching our conclusion that the
holding company's "mere ownership of [the title and guaranty company] is too distant
and limited a contact with Arkansas to justify subjecting it to the District Court's
exercise of personal jurisdiction," id., we also noted that the "circumstances in each
case much be examined to determine whether a corporation through the activities of
another corporation has subjected itself to jurisdiction in a state under its long arm
statute," id. at 649 (internal quotations omitted).
We think that the district court placed undue reliance on the principle of
piercing the corporate veil. Determining the propriety of jurisdiction at a particular
place always involves applying principles of fairness and reasonableness to a distinct
set of facts, and the determination is not readily amenable to rigid rules that can be
applied across the entire spectrum of cases. In any event, this case is clearly
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distinguishable from Epps, because, as discussed below, Dassault Aviation's contacts
with Arkansas go well beyond "mere ownership" of Dassault Falcon Jet. We agree
with Ms. Anderson that neither physical presence in Arkansas nor piercing Dassault
Falcon Jet's corporate veil is required to establish the minimum contacts necessary for
the exercise of personal jurisdiction in Arkansas. Dassault Aviation's establishment
of a distribution system in Arkansas, and marketing its products there, are matters that
we may appropriately consider in determining whether the assertion of personal
jurisdiction in Arkansas comports with due process.
B.
We conclude that Dassault Aviation has sufficient contacts with Arkansas to
support an Arkansas court's assertion of personal jurisdiction over it whether or not
Dassault Falcon Jet is its alter ego. Dassault Aviation and Dassault Falcon Jet have
a close, synergistic relationship that is not an abuse of the corporate organizational
form, but is clearly relevant to the jurisdictional question. The majority of jets sold
worldwide by Dassault Aviation fly in and out of Arkansas to be completed to the
specifications of consumers at the Dassault Aviation Group's largest production site
by Dassault Aviation's wholly owned subsidiary and exclusive distributor of business
jets in the western hemisphere. We think that it is contrary to common sense to
maintain that Dassault Aviation's nexus to the state of Arkansas is so minimal that it
is not amenable to suit there.
Dassault Aviation benefits greatly from Dassault Falcon Jet's exclusive
distribution of its business jets throughout the western hemisphere, and Dassault
Aviation has a clear awareness of and interest in its subsidiary's substantial operations
in Arkansas. Dassault Aviation states in its 2001 annual report that "Dassault
Aviation has been present particularly in the US since the start of the 1970s through
its specialized Falcon subsidiary – Dassault Falcon Jet – which has three offices in
Teterboro (New Jersey), Little Rock (Arkansas) and Wilmington (Delaware). The
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Group's largest production site is in Little Rock." (Emphasis added.) Thus, Dassault
Aviation touts in its own annual report that its "presence" in the United States has
been especially significant in the state of Arkansas.
A website operated and administered jointly by Dassault Aviation and Dassault
Falcon Jet (www.dassaultfalcon.com) includes a "time line," which purportedly
chronicles the companies' "fascinating cavalcade of milestones" and their "Tradition
of Excellence." The two companies provide the following information in their 1995
entry: "Continuing the consolidation effort, Dassault Falcon Jet now completes all
new Falcon business jets at its plant in Little Rock, where a major expansion will
begin in 1996. ... Quality Little Rock completions are now standard for Falcon
customers in both hemispheres." The 1998 entry states: "Major expansion brings
Dassault Falcon Jet Little Rock to almost half a million square feet – and boosts the
center's production capacity to over 60 new aircraft completions per year. Little Rock
is now the main completion center for all Falcon jets worldwide." The time line also
reports that the Little Rock facility by 1998 "employ[ed] more workers than any
single Dassault Aviation plant in France."
The companies' website explains the role of the Little Rock completion center,
stating that "Falcons are manufactured in France, then flown in 'green' condition to
the completion center where optional avionics and a custom interior are installed, and
the exterior is painted." Jets sold to customers by both Dassault Aviation and
Dassault Falcon Jet are flown in and out of the Little Rock completion center.
Dassault Aviation itself paid over $126 million to Dassault Falcon Jet in the seven
years preceding the filing of this action for completions done in Little Rock to Falcon
jets that Dassault Aviation then sold to other parties. The companies indicate their
pride in the Arkansas facility and its importance to their success by noting on their
website that the Little Rock completion center is "one of the best-equipped and most
efficient facilities anywhere – the envy of the completion industry – another testament
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to the Dassault Falcon passion." ("Dassault Falcon" is the name of the division of
Dassault Aviation that specializes in Falcon business jets; Dassault Aviation's other
division, called "Dassault Defense," focuses on military programs.)
Because the two companies have a closely intertwined business relationship,
Dassault Aviation's nexus with Arkansas and the Little Rock completion center goes
well beyond mere ownership of Dassault Falcon Jet stock. This is not a situation in
which Dassault Aviation simply placed the jet at issue "into the stream of commerce"
which fortuitously swept it into Arkansas. Dassault Aviation bought what is now
Dassault Falcon Jet in 1994, and since then has consistently acted to consolidate the
image and operations of the two companies. The companies acknowledge that as
early as 1995 they were "[c]ontinuing the consolidation effort" by making "[q]uality
Little Rock completions ... standard for Falcon customers in both hemispheres." In
a 2001 press release, Dassault Falcon Jet, discussing the Dassault Aviation Group,
states that "[g]roup synergy is viewed as an important key to competitiveness." The
group is able to achieve such synergy, in part, because the directors of the two
companies overlap: both the CEO and the President of Dassault Falcon Jet are also
officers and directors of Dassault Aviation. (The CEO of Dassault Falcon Jet
receives all of his compensation from Dassault Aviation.)
Both companies use the word "Dassault" in their name, and they utilize a
common logo. As the head of the Dassault Falcon division of Dassault Aviation (who
is also Dassault Falcon Jet's CEO) testified, the companies "unify the efforts of both
Dassault Aviation and Dassault Falcon Jet to create this brand and logo image." As
discussed above, the companies share a website. They also jointly put together a
publication entitled "Falcon Operator Directory," which lists seventeen Dassault jets
owned and operated by persons or companies in Arkansas. The directory also gives
contact information for a "field service representative" in Little Rock who provides
services and information to Falcon operators based in Arkansas, an "authorized
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service center" for Falcon jets in Little Rock, and a designated salesperson for
potential Arkansas customers. The two companies also jointly publish and
disseminate publications entitled "Worldwide Customer Service" and "Falcon
Operator Services Guide," both of which provide contact information for a
representative in Arkansas, and a customer service newsletter entitled "Update,"
which includes Arkansas-related Falcon news. It is readily apparent from the jointly
produced website and publications, and the similarities in names and logos, that the
two companies utilize a unified marketing strategy. Part of this unified strategy
includes highlighting the activities of the Little Rock completion center and
marketing various Falcon jet services to Arkansas customers.
We have stated that "a foreign manufacturer that successfully employs one or
two distributors to cover the United States intends to reap the benefit of sales in every
state where those distributors market." Clune v. Alimak AB, 233 F.3d 538, 544 (8th
Cir. 2000), cert. denied, 533 U.S. 929 (2001). Dassault Falcon Jet not only marketed
and sold products in Arkansas, but it operated the Dassault Aviation Group's largest
production facility there. We conclude that Dassault Aviation "purposefully directed
its products to the United States," and specifically to Arkansas, where most Falcon
jets are completed, "through the distribution system it set up in this country." See id.
Dassault Aviation clearly intended to reap the benefits of Dassault Falcon Jet's
substantial presence in Arkansas, as is made clear in the statements from its annual
report and the website that it co-operates. Given the central importance of the Little
Rock completion center to the success of Dassault Aviation's worldwide sales of
business jets, and Arkansas's specific and identifiable role in Dassault Aviation's
unified marketing endeavors with Dassault Falcon Jet, it would not violate traditional
notions of fair play and substantial justice for an Arkansas court to assert personal
jurisdiction in this action.
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C.
In addition to Dassault Aviation's substantial nexus with Arkansas and the
Little Rock completion center, we note that other considerations here also support the
exercise of personal jurisdiction in Arkansas. For one thing, we are not convinced
that an Arkansas forum would be especially inconvenient for Dassault Aviation.
Though the distance between France and Arkansas is substantial, we presume that
Dassault Aviation has ready access to air transportation for conveniently making the
trip. Arkansas contains one of the central hubs of the Dassault Aviation Group, and
is already visited frequently by employees of Dassault Aviation (including the two
officers common to both Dassault Falcon Jet and Dassault Aviation). Furthermore,
Arkansas has a substantial interest in the matter to be litigated, as the safety of Falcon
jets affects the state's consumers and workers who encounter Dassault Aviation's
products. Though the injury did not occur in Arkansas, and Ms. Anderson is not an
Arkansas resident, the jet at issue here was completed and delivered to its buyer in
Arkansas, as are many other Falcon jets. Finally, Ms. Anderson likely has no other
forum available to her in this country for her suit against Dassault Aviation. Her
action was dismissed in Michigan (where the accident occurred), and Arkansas
(where the jet was sold) seems to be the sole remaining logical and convenient place
for the litigation to proceed.
III.
In sum, the symbiotic relationship between Dassault Aviation and Dassault
Falcon Jet, coupled with the acknowledged importance of Arkansas's production site
and Falcon customers to both companies' success, leads us to conclude that an
Arkansas court's assertion of jurisdiction over the instant action would be reasonable
and fair. We therefore vacate the judgment of the district court and remand the cause
for further proceedings.
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