Maui Electric Co. v. Chromalloy Gas Turbine, LLC

942 F. Supp. 2d 1035, 2013 WL 1768686, 2013 U.S. Dist. LEXIS 58163
CourtDistrict Court, D. Hawaii
DecidedApril 23, 2013
DocketCivil No. 12-00486 SOM-BMK
StatusPublished
Cited by3 cases

This text of 942 F. Supp. 2d 1035 (Maui Electric Co. v. Chromalloy Gas Turbine, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Hawaii primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Maui Electric Co. v. Chromalloy Gas Turbine, LLC, 942 F. Supp. 2d 1035, 2013 WL 1768686, 2013 U.S. Dist. LEXIS 58163 (D. Haw. 2013).

Opinion

ORDER DENYING DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

SUSAN OKI MOLLWAY, Chief Judge.

I. INTRODUCTION.

This action concerns the destruction of a gas turbine owned and operated by Plaintiff Maui Electric Company, Limited (“MECO”). MECO alleges that one of the high pressure turbine blades manufactured [1038]*1038by Defendant Chromalloy Gas Turbine, LLC, was faulty and caused more than $4 million in damages. MECO asserts claims of negligence, strict liability, and negligent misrepresentation. Chromalloy seeks dismissal of this action on the ground that this court lacks personal jurisdiction. The court denies the motion.

II. BACKGROUND.

Chromalloy is incorporated in Delaware and has its principal place of business in Florida. See Declaration of Craig Haines ¶ 6, ECF No. 25-1. In addition to providing repairs and replacement parts for planes, Chromalloy “serves the industrial and marine gas turbine market.” Id. ¶ 8. That is, it makes “after-market” parts for General Electric gas turbines, i.e., parts that can be installed after the turbines have already been purchased. Chromalloy indicated at the hearing that it sold turbine parts to companies like Jet Turbine Services, Inc., and TransCanada Turbine. At the time Chromalloy sold the parts, Chromalloy says that it did not know when and where these companies would resell and install them.

Beginning in 2003, MECO began retrofitting its General Electric turbines with Chromalloy parts and components, including Chromalloy’s “nickel-based alloy single-crystal High Pressure Turbine blades.” See Declaration of John Mauri ¶¶ 6-7, ECF No. 46-1. There is no dispute that this technology was used by multiple manufacturers or that Chromalloy only had a small percentage of the market for these parts. At the hearing on this motion, Chromalloy represented that it had up to 10% of the market for these parts.

MECO purchased the Chromalloy parts and components from Jet Turbine Services, Inc., which purchased them from Chromalloy. Id. ¶ 9. Jet Turbine Services then installed the Chromalloy parts and components in MECO’s turbines. Id. For example, in May 2003, Chromalloy’s high pressure turbine blades and vanes were installed in MECO’s M-19 ESN-759 turbine. Similar blades and vanes were installed in MECO’s M-16 ESN-481-669 turbine in February 2004. They were again installed on MECO’s M-19 ESN-759 turbine in April 2007, when it was time to replace the Chromalloy parts from the 2003 installation. Id. Apparently, Chromalloy’s high pressure turbine blades were also installed by Jet Turbine Services in another MECO turbine, ESN 481-677, in 2007. See id. ¶ 22. These are the parts that allegedly failed and caused damage in 2010. See Complaint ¶ 19; Motion to Dismiss at 4, ECF No. 24-4.

In January 2007, MECO sent its M-16 ESN 481-669 turbine to a Canadian company, TransCanada Turbine, for an overhaul. TransCanada discovered several cracks in the high pressure turbine blades of the ESN 481-669 turbine. See Mauñ Deck ¶ 11. TransCanada shipped the blades to Chromalloy’s office in Nevada for inspection and repair. See Declaration of David Alan Lee, Jr., ¶ 14, ECF No. 25-3. Chromalloy examined the blades and, in February 2007, issued a preliminary report concerning the cracks. See Ex. 1 to Lee Deck, ECF No. 26-1. The preliminary report concluded that the cracks in the blades were caused by a “deposit of deleterious material onto the uncoated roots” of the blades. Id. The preliminary report noted that the high pressure turbine blade roots do not have a protective coating applied to them because coatings “are very brittle and would crack if in contact with the disk under the engine load. The crack would then propagate into the component and result in premature failure.” Id. Lee says that, at a Western Turbine Users Conference in March 2007 in Arizona, Lee gave representatives from TransCanada and MECO a [1039]*1039copy of the preliminary report. See Lee Decl. ¶¶ 17-19.

Chromalloy then asked an independent metallurgical engineer, Dr. Ramesh Kar, to examine the blades that had been sent to Chromalloy by TransCanada. See Lee Decl. ¶20. On or about April 11, 2007, Kar issued his report. See Ex. 2 to Lee Decl., ECF No. 27-1. Kar concluded that the cracks in the turbine blades “were caused by exposure of the non-protected dovetail regions of the blades to an aggressive service environment extremely high in sulfur (such as due to a gas leak or inadvertent exposure to hot diesel fumes).” Id. Kar concluded that “the distress cracks were unrelated to any material/manufacturing defects in the blades or improper fabrication/installation.” Id.

In April 2007, Jet Turbine Services went to Maui to perform an overhaul of MECO’s ECN 481-759 turbine. See Lee Decl. ¶¶ 21-22. According to MECO, Chromalloy was very interested in determining whether other blades in MECO’s turbines had cracks in them. Chromalloy employees, Lee and Gary Noah, traveled to Maui to observe the overhaul. See Lee Decl. ¶22. Lee says the blades of the ESN 481-759 turbine did not have the same cracks as the ESN 481-669. Id. Lee also says that, while on Maui, he gave Jet Turbine Services and MECO a copy of Kar’s report. Id. ¶23. Mauri says that he talked with Lee during this visit. See Mauri Decl. ¶ 13.

The Complaint alleges that, at some point in time, Chromalloy told MECO that the cracking of the ESN 481-669 high pressure turbine blades “was an isolated event requiring no further preventative measures for the remaining [high pressure turbine] packages on the other MECO GE turbine generators.” See Complaint, ¶ 30(d) and ¶ 16 (“Chromalloy investigated the incident and represented to MECO that the failure in the GE turbine 481-669 was an isolated event.”). MECO alleges that, based on those representations, it “took no further preventative measures with its other GE turbines retrofitted with the identical [high pressure turbine] packages.” Complaint ¶ 17.

In 2009, Chromalloy sent MECO a proposal to change out the high pressure turbine blades on the M-14 ESN 481-637 turbine. This proposal was accepted, and the work was completed in June 2009. See Mauri Decl. ¶¶ 14-15.

In 2010, Chromalloy sent MECO a similar proposal to change out the high pressure turbine blades on the M-14 ESN 481-669 turbine. This proposal was accepted, and the work was completed in 2010. See Mauri Decl. ¶¶ 16-17.

MECO alleges that the uncoated and unprotected shank area of the ESN 481-677 turbine corroded and that, on September 3, 2010, one of the blades on the ESN 481-677 broke off and destroyed the turbine, causing over $4 million in damages. See Complaint ¶¶ 18-20.

Larry Gasaway worked for Jet Turbine Services until he was hired by Chromalloy. See Mauri Decl. ¶¶ 10, 18. From 2008 to 2010, Gasaway “visited MECO’s plant several times on behalf of Chromalloy to market Chromalloy products.” Id. ¶ 19. Diederick Van Der Meyden, a Chromalloy sales representative, accompanied Gasaway on one of these trips. Id. ¶ 20.

Mauri says that Van Der Meyden was transferred to Hawaii in 2007 “for the purposes of marketing Chromalloy products and services to Aloha Airlines.” Id. ¶ 21.

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Bluebook (online)
942 F. Supp. 2d 1035, 2013 WL 1768686, 2013 U.S. Dist. LEXIS 58163, Counsel Stack Legal Research, https://law.counselstack.com/opinion/maui-electric-co-v-chromalloy-gas-turbine-llc-hid-2013.