Duple Motor Bodies, Ltd. v. Clarence A. Hollingsworth

417 F.2d 231

• Court: Court of Appeals for the Ninth Circuit
• Decided: December 8, 1969
• Docket: 22826_1
• Status: Published

Opinions

MERRILL, Circuit Judge:

This appeal challenges the in personam jurisdiction of the District Court of the District of Hawaii over Duple Motor Bodies, Ltd., a corporation engaged in the manufacturing of motor bodies in England.¹ The court concluded that since the action was founded on diversity of citizenship, the amenability of Duple to suit would depend on Hawaii law and that Duple was personally subject to the court’s jurisdiction under Hawaii’s “long-arm” statute by virtue of out-of-state service of process as there provided.² The claim of the plaintiffs-appellees against appellant is one of products liability for injuries suffered in Hawaii and jurisdiction was founded on § (1) (b) of the Hawaii statute: “The commission of a tortious act within this State.” ³ Upon this appeal appellant contends (1) that, as a matter of statutory construction, it committed no tortious act within the State of Hawaii, and (2) that in any event, under the circumstances of this case, the due process concepts of fair play and substantial justice bar application to it of the Hawaii statute.

1. Appellant contends that the negligence charged against it was in the manufacture of a coach body; that this occurred in England and that therefore no tortious act was committed by it in Hawaii. The contention presents a question of construction of the Hawaii statute.

Legislative history shows that the Hawaii statute was taken from an identical statute of Illinois.⁴ Hawaii courts have taken the view that the adoption of the wording of another state’s statute that has been judicially construed by the courts of the original state is an adoption of that construction unless a contrary intent appears. In the Matter of Sawyer, 41 Haw. 270 (1956); Palakiko v. Harper, 209 F.2d 75 (9th Cir. 1954).

The contention here made (that no tortious act was committed in the forum state) was, prior to passage of the Hawaii statute, made under the Illinois statute upon a similar state of facts and was rejected in Gray v. American Radiator and Standard Sanitary Corporation, 22 Ill.2d 432, 176 N.E.2d 761, 763 (1961), where it was stated :

“We think it is clear that the alleged negligence in manufacturing the valve cannot be separated from the resulting injury; and that for present purposes, like those of liability and limitations, the tort was committed in Illinois.”

The Illinois court also rejected the contention (likewise made here) that the legislative choice of the words “tortious act” rather than “tort” requires the doing of some act in the forum state. “To be tor-tious an act must cause injury. The concept of injury is an inseparable part of the phrase.” 176 N.E.2d at page 763.⁵

In this case appellant’s alleged negligent manufacture occurred prior to passage of the Hawaii Act. Appellant contends that the Act should not be construed retroactively to encompass negligence occurring prior to its passage.

This contention also was made under the Illinois Act and rejected prior to passage of the Hawaii Act. Nelson v. Miller, 11 Ill.2d 378, 143 N.E.2d 673, 675-676 (1957).⁶ In that case, 143 N.E.2d at page 676, the court distinguished statutes where jurisdiction is founded on an implied consent to be sued and ruled that under the Illinois statute “jurisdiction does not rest upon such a fictional consent.”7

We conclude that the District Court correctly ruled that negligent manufacture outside the state, resulting in injury in Hawaii, constituted commission of a tortious act within Hawaii under the statute.

2. Appellant next contends that due process precludes Hawaii ■ from asserting jurisdiction in personam under the facts of this ease.

Originally, due process necessitated the “presence” of the .defendant in the forum. Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1877). In International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945), the more permissive rule was announced that the defendant, to be subject to a state’s jurisdiction, need only have “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ”

McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), found a single contact with the forum sufficient — that contact being the affirmance of an insurance contract. A year later Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958), while noting the expanding scope of personal jurisdiction, held essential “that there be some act by which the defendant purposefully avails [himself] of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” To the same effect: L. D. Reeder Contractors v. Higgins Industries, Inc., 265 F.2d 768 (9th Cir. 1959).

Appellant contends that these minimum contact requirements are lacking here. It has never registered to do business in Hawaii, has never had a representative present there or owned property there. So far as it knows its products are not used there other than the coaches sold to Maui Island Tours, one of which was involved in the accident that is the subject of this suit.

The order for these coaches originated in Hawaii. It was placed by Maui Island Tours with Haleakala Motors, Ltd., who transmitted the order to Vauxhall. Vauxhall manufactured the chassis and sent them on to appellant. Appellant designed and manufactured the coach bodies, placed them on the chassis, painted them and shipped the completed vehicles back to Vauxhall. Vauxhall shipped to Haleakala Motors who then sold to ¡Maui Island Tours.

The bodies were designed and manufactured by appellant with the knowledge that they were to be used in Hawaii and were made with special modifications to adapt them for use there. Prior to purchase a representative of Maui Island Tours went to London and visited appellant’s factory, and with representatives of appellant and Vauxhall, discussed paint specifications. Following the sale, appellant responded to an order for spare parts from Maui Island Tours and at that time solicited further business from that concern.

Our ease thus is not one where the alleged negligent conduct was committed within the forum state and where the physical presence of the defendant in commission of the conduct constituting the alleged negligence was itself a significant contact» Specifically we deal with the problem of products liability in the context of foreign trade»

Here the facts establishing jurisdiction under the Hawaii statute (commission of a tortious act within Hawaii) also establish liability and, where disputed, cannot suffice as contacts with the forum state. What is needed is some additional factor that would render it fair to require the manufacturer to submit these disputed issues to a foreign forum.

In our judgment, the presence of Duple’s coach bodies in Hawaii, brought about by Duple’s sale to Vauxhall with knowledge that the product was destined for Hawaii, was sufficient contact with Hawaii to meet the requirements of due process.⁸

We do not regard it as offensive to fair play or substantial justice or an undue burden on foreign trade to require a manufacturer to defend his product wherever he himself has placed it, either directly or through the normal distributive channels of trade. If it is clearly foreseeable as a result of trade with a foreign state that injury from a defective product (if it occurs) would occur in that state, the hardship of defending the product in that state in our judgment must be assumed as an attribute of foreign trade.⁹

Nor is due process offended by application of the Hawaii statute to past negligence of appellant. The substantive rights of appellees were not enlarged by the new law. No new liability was imposed upon appellant for past events. As stated in McGee v. International Life Insurance Co., 355 U.S. 220, 224, 78 S.Ct. 199, 202, 2 L.Ed.2d 223 (1957):

“It did nothing more than to provide petitioner with a California forum to enforce whatever substantive rights she might have against [appellant].”¹⁰

Nor do we share appellant’s concern that we are here in an area of international, and. not simply interstate, commerce. Problems of full faith and credit do indeed exist and enforcement in England of any judgment appellees may secure in Hawaii may well prove difficult if the views of English courts do not coincide with ours as to what is fair and just and in the best interests of foreign trade. This does not, however, relieve us of our obligation to deal with these problems in the light of the requirements of the Constitution of the United States as we view them.

Judgment affirmed.

1 . The ease reaches this court on interlocutory appeal, pursuant to order of this court under 28 U.S.C. § 1292(b) from an order of the District Court denying appellant’s motion to dismiss and motion to quash return of service of summons.

2 . § 230-41.5, R.L.H. (Supp.1965) :

“(1) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits his person, and, if an individual, his personal representative, to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any of the acts:

(a) The transaction of any business within this State;

(b) The commission of a tortious act within this State ;

(c) The ownership, use, or possession of any real estate situated in this State;

(d) Contracting to insure any person, property or risk located within this State at the time of contracting.

(2) Service of process upon any person who is subject to the jurisdiction of the courts of this State, as provided in this section, may be made by serving the summons upon the defendant outside this State, as provided in section 230-33, with the same force and effect as though summons had been personally served within this State.

(3) Only causes of action arising from acts enumerated herein may be asserted against a defendant in an action in which jurisdiction over him is based upon this section.

(4) Nothing herein contained limits or affects the rights to serve any process in any other manner now or hereafter provided by law.”

3 . The complaint alleges that plaintiffs-ap-pellees suffered personal injuries when a bus owned by Maui Island Tours overturned due to the negligent operation of its driver and its roof caved in due to negligent manufacture. Suit was brought against the driver, against Maui Island Tours, his employer, against Haleakala Motors from whom Maui Island Tours purchased the bus, and against appellant and Vauxhall Motors, Ltd. (both of England), and General Motors Corporation (of the United States) all of whom collaborated either in the manufacture of the bus or its distribution to Haleakala Motors.

Upon this appeal Haleakala Motors, Vauxhall Motors, Ltd., and General Motors Corporation all are aligned with plaintiffs-appellees in supporting jurisdietion of the District Court over appellant.

4 . “This bill is based on the Illinois statute (Smith-Hurd’s Ill.Anno.Statutes, Chapter 110, sec. 17) which has been held constitutional.” Standing Committee Report No. 805, April 24, 1965.

5 . Other jurisdictions having identically worded long-arm statutes, extending jurisdiction to cases involving “the commission of a tortious act within this state,” have generally followed Gray in applying the statute to out-of-state negligence causing in-state injury. Nixon v. Cohn, 62 Wash.2d 987, 385 P.2d 305 (1963); Hiersche v. Seamless Rubber Co., 225 F.Supp. 682 (Or.1963); Foye v. Consolidated Baling Machine Co., 229 A.2d 196 (Me.1967); Kroger Co. v. Adkins Transfer Co., 284 F.Supp. 371 (M.D. Tenn.1968); and Tate v. Renault, Inc., 278 F.Supp. 457 (E.D.Tenn.1967), aff’d 402 F.2d 795 (5th Cir. 1968).

Only New York, Feathers v. McLucas, sub-nom. Longines-Wittnauer Watch Co. v. Barnes and Reinecke, Inc., 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68 (1965), and Colorado, Lichina v. Futura, 260 F.Supp. 252 (Colo.1966), have found this wording not to apply to the out-of-state-negligenee/in-state-injury case. In the case of New York, the legislature shortly thereafter redrafted the statute specifically to apply to these cases. CPLR § 302(a).

See Anno. 19 A.L.R.3d 13, 61-77.

6 . See United States v. Merriam, 2 U.S. Dist.Ct.Haw. 431 (1906), for the same view under Hawaii law.

7 . The courts of Arkansas, Louisiana, Maryland, Michigan, New York, Ohio, Oregon, Pennsylvania and Virginia are in accord. See Anno. 19 A.L.R.3d 13, 54-55.

8 . “The maimer in which the injury-producing defect came about has no impact on the question of jurisdiction: the jurisdictional act is not the creation of the defect, but the distribution of defective products in a national way. When a manufacturer voluntarily chooses to sell his product in a way in which it will be resold from dealer to dealer, transferred from hand to hand and transported from state to state, he cannot reasonably claim that he is surprised at being held to answer in any state for damages the product causes. Keckler v. Brookwood Country Club, 248 F.Supp. 645, 649 (N.D.Ill.1965).

9 . To this effect: Eyerly Aircraft Co. v. Killian, 414 F.2d 591 (5th Cir., July 11, 1969); Gray v. American Radiator and Standard Sanitation Corporation, supra; Phillips v. Anchor Hobking Glass Co., 100 Ariz. 251, 413 P.2d 732, 19 A.L.R.3d 1 (1966); Metal-Matic, Inc. v. Eighth Judicial District Court, 82 Nev. 263, 415 P.2d 617 (1966); Continental Oil Co. v. Atwood and Morrill Co., 265 F.Supp. 692 (D.Mont.1967); Keckler v. Brookwood Country Club, supra.

Some cases requiring further contacts are explainable as dealing with the requirements of the statute involved rather than the demands of due process. See, e. g., Beaty v. M. S. Steel Co., 401 F.2d 157, footnote 3 (4th Cir. 1968), and statutes in Maryland (Art. 75 § 96(a) (4)), New York (CPLR § 302(a)), Ohio (§ 2307.382(A) (1) (4)), and Virginia (§ 8-81.2(2) (3) and (4)). Here legislative history of the Hawaii Act indicates a desire that the reach of the statute be as broad as is constitutionally permissible.

10 . There would be no constitutional problem even if the statute had been applied retroactively, i. e., if the injury, too, had occurred before the effective date of the statute. Nelson v. Miller, supra; Longines-Wittnauer Watch Co. v. Barnes and Reinecke, Inc., supra; Anno. 19 A.L.R.3d 138. When, as here, the injury occurs after the effective date of the statute, no retroactive application of the statute is involved since the cause of action did not accrue until the injury took place. Aftanase v. Economy Baler Co., 343 F.2d 187 (8th Cir. 1965); Corn v. Shelton Equipment Machine Co., 259 F.Supp. 955 (Okla.1966).