Petroleum Helicopters, Inc. v. Avco Corporation

804 F.2d 1367

• Court: Court of Appeals for the Fifth Circuit
• Decided: January 6, 1987
• Docket: 86-4144
• Status: Published

Opinions

ALVIN B. RUBIN, Circuit Judge:

A Louisiana company sued a California manufacturer for property damage sustained when its helicopter sank in the coastal waters off Louisiana shores. It alleged that the accident was caused at least in part by a defect in the helicopter float that had been made by the manufacturer and sold by it in New Jersey to a Texas company. The district court dismissed the action for lack of personal jurisdiction over the manufacturer under Louisiana’s long-arm statute, 623 F.Supp. 902 (1985). We certify to the Louisiana Supreme Court the question of the long-arm statute's applicability.

I.

Petroleum Helicopters, Inc., a Delaware corporation which has its principal place of business in Louisiana, bought a helicopter from Aerospatiale Helicopter Corporation, a Texas manufacturer, to transport men and equipment from Louisiana to offshore installations. The helicopter, apparently while being used for this purpose, sank after an emergency landing on the Gulf of Mexico, beyond the territorial waters of Louisiana. Garrett Corporation, the defendant, had supplied the helicopter flotation devices from its New Jersey plant.

Petroleum Helicopters sued Aerospatiale and, in addition, Avco Corporation, a Connecticut corporation, which had designed and manufactured the helicopter engine; Societe Nationale Industrielle Aerospatiale, a corporation domiciled in France, which had also participated in the design and manufacture of the engines; Parker Hannifin Corporation, which had designed and manufactured the fuel manifold of the helicopter engine; and Garrett. Petroleum Helicopters asserted that Garrett had designed, manufactured, and assembled the flotation devices on the helicopter; that these had defects at the time they left Garrett’s hands that caused or contributed to the sinking of the helicopter; and that Garrett was liable to it for breach of express and implied warranties made by Garrett. Service of process was made on Garrett under the Louisiana long-arm statute. Michael Duhon, who was a passenger in the helicopter, died in the accident. His representatives brought suit in state court, suit 84-3057 in the Fifteenth Judicial District Court for the Parish of Lafayette, Louisiana. In that suit Garrett was named as a principal defendant and as a cross-claim defendant by Petroleum Helicopters. That court has sustained a motion to dismiss Garrett.

Garrett, whose principal place of business is in California, manufactures aerospace and industrial products, including helicopter floats, which are made in New Jersey. Garrett has no property or offices in Louisiana nor are any of its employees based there.

Garrett supplies 80% of the helicopter flotation systems used in the entire world. It sells floats to manufacturers of helicopters like Aerospatiale and it also sells replacement helicopter floats to users of helicopters. In 1980, Aerospatiale’s sales to Petroleum Helicopters were 19% of its volume and in 1981 these amounted to 8%. In that year, Garrett sold floats costing about $7,000 to Petroleum Helicopters and sold other Louisiana customers $14,000 in floats. The floats sold directly to Petroleum Helicopters, however, were made for a different kind of helicopter than the one that sank.

Aside from the sale of helicopter floats, Garrett conducts a substantial amount of business in Louisiana. Between 1980 and 1983, its Louisiana sales averaged $1.75 million. A Garrett account executive visits Louisiana monthly to discuss the use of Garrett equipment with customers; other Garrett representatives visit Louisiana to train users of Garrett products; Garrett sends a mobile van to Louisiana semi-annually to service its products; and Garrett mails promotional materials directly to customers in Louisiana. It also advertises its products in several national trade publications that are distributed in Louisiana.

Garrett contends that neither the Louisiana long-arm statute nor due process permits a Louisiana court to assert personal jurisdiction over it. Petroleum Helicopters argues that the sole test for personal jurisdiction in a federal question case is due process and that due process allows jurisdiction over Garrett. Petroleum Helicopters also contends that, even if the long-arm statute governs personal jurisdiction, the court can assert jurisdiction over Garrett.

The long-arm statute question is unsettled; consequently, it is an appropriate issue for certification to the Louisiana Supreme Court.¹ We may certify, however, only if the state-law question controls the outcome of the case.² Consequently, we must first decide the federal issue.³ Ordinarily, we do not decide a federal question when resolution of a state issue might moot the federal question. Restraint here, however, would defeat the even stronger policy of having state courts decide state law. If we do not decide the federal question, the Louisiana Supreme Court might not decide the long-arm statute issue for the certified question might not then be dispositive, and we might be seeking decision of a question that would prove to have been moot.⁴

II.

If Garrett has minimum contacts with Louisiana of such a nature that subjecting it to the jurisdiction of Louisiana courts would not offend “traditional notions of fair play,”⁵ it is not deprived of due process by the assertion of in-personam jurisdiction. The concept of minimum contacts assures that defendants will be treated fairly by protecting them “against the burdens of litigation in [an] inconvenient forum.”⁶ It also ensures that the state asserting jurisdiction has a sufficient interest in deciding the suit,⁷ and is not selected as a mere adjudicator of a dispute that is of no concern to it.

In-personam jurisdiction may be asserted on two different bases. If a corporation engages in “continuous and systematic general business” activities in a state, then the state may exercise “general” jurisdiction over it.⁸ When a state has general jurisdiction over a corporation, its courts have power to adjudicate suits in which the corporation is involved even if there is no relationship between the cause of action and the defendant’s contacts with the forum.⁹ On the other hand, if general jurisdiction is lacking, but the cause of action arises out of or is related to the defendant’s contacts with the forum, the forum may exercise “specific” jurisdiction,¹⁰ that is, jurisdiction limited to adjudication of the particular controversy.

Relying upon the 1984 Supreme Court decision in Helicópteros Nacionales de Colombia, S.A. v. Hall,11 Garrett contends that Louisiana cannot exercise either general or specific jurisdiction over it. In Helicópteros however, both parties agreed that specific jurisdiction was absent. Consequently, the court restricted its analysis to circumstances warranting the exercise of general jurisdiction.¹²

Garrett’s activities in Louisiana are not sufficient to establish general jurisdiction, so Petroleum Helicopters relies on the thesis that the Louisiana long-arm statute confers specific jurisdiction over Garrett. In World-Wide Volkswagen Corp. v. Woodson,13 the Supreme Court held that specific jurisdiction may be exercised over a corporation that engages in such a sufficient amount of business in a state that it can “reasonably anticipate being haled into court there” to defend actions concerning its products.¹⁴ The stream-of-commerce principle is designed to encompass companies that purposefully serve markets broader than the states in which its initial or direct sales are made.¹⁵ Consequently, we have held that jurisdiction may be asserted over a company that manufactures a component part in one state for incorporation into a finished product in a second state and sale to customers in a third state.¹⁶ The evidence warrants the conclusion that Garrett tried to serve as broad a market as it could reach, including Louisiana.¹⁷ Unlike the local distributors in World-Wide Volkswagen, who merely resold products made by and purchased from another, Garrett is a manufacturer who makes its product “ ‘available for purchase in as many forums as possible.’ ”¹⁸ Garrett directly served the Louisiana market with its replacement floats; it indirectly served Louisiana customers by selling its floats for incorporation into helicopters that were sold for use in Louisiana.¹⁹ Moreover, Garrett sent representatives to Louisiana for promotion, training, and servicing.²⁰ In sum, Garrett “deliver[ed] its [floats] into the stream of commerce with the expectation” that Louisianans would purchase them.²¹ Garrett purposefully availed itself of the benefits of doing business in Louisiana; consequently, it is not unfair to require Garrett to appear in Louisiana courts.²²

Louisiana has a strong interest in adjudicating this dispute. The helicopter was used in Louisiana by a firm having its principal place of business in this state, and that firm suffered the economic injury. Louisiana has an “ ‘interest in providing effective means of redress for its residents.’ ”²³ The litigation is pending in the same court that dismissed Garrett, so it would be manifestly more convenient to adjudicate the entire dispute in Louisiana.²⁴

Garrett contends that the stream of commerce analysis should not apply because the accident occurred outside of Louisiana. This argument mischaracterizes stream of commerce doctrine. Whether the accident occurred inside or outside of Louisiana does not affect the fairness to Garrett of appearing in Louisiana. Although the location of the accident affects Louisiana’s interest in adjudicating the dispute,²⁵ the absence of a Louisiana location does not outweigh the factors favoring the interest. Since the accident did not occur within the territorial jurisdiction of any other state, no other state is the place of injury or supplies the ex locus delicti. If Garrett can be sued only in New Jersey, where it sold the helicopters, or at its domicile in California, it is likely that all of the claims involved in the present controversy cannot be decided in a single forum. Consequently, we hold that Garrett would not be deprived of due process by the assertion of specific jurisdiction over it in Louisiana.

III.

Even if a corporation may constitutionally be subjected to the jurisdiction of a state court, its amenability to that jurisdiction is governed by the state’s standards. The federal constitution sets the limits of state jurisdiction but a state may choose not to exercise all of the power that is permitted by the federal constitution. Even when a plaintiff invokes federal question jurisdiction and serves process under a state long-arm statute, a federal court can assert jurisdiction only if the state court could have done so.²⁶ Consequently, we must decide whether Louisiana’s long-arm statute²⁷ permits us to assert jurisdiction over Garrett.

Prior to 1986, this court consistently held that Louisiana’s long-arm statute was intended to empower Louisiana courts to exercise the full extent of the jurisdiction permitted by the federal due process clause.²⁸ We based this interpretation on the official comments of the redactors of the long-arm statute²⁹ and an unwavering line of decisions by the Louisiana Supreme Court. Thus, the Louisiana Supreme Court said, in Fryar v. Westside Habilitation Center, a 1985 opinion, “Louisiana’s Long-Arm Statute ... is intended to encompass the maximum jurisdictional outreach allowable under the United States Constitution.”³⁰ In Clay v. Clay, written in 1977, the opinion described the statute as “adopted by this state to permit the courts of Louisiana to tap the full potential of in personam jurisdiction over nonresidents consistent with the due process clause of the fourteenth amendment.”³¹ In another 1977 opinion, Adcock v. Surety Research and Investment Corp., the court said, “[t]he applicable statutory provision was designed to allow the courts of this state to exercise the broadest basis of personal jurisdiction over nonresidents permissible under the fourteenth amendment.”³² The court had earlier announced, in Moore v. Central Louisiana Electric Company, Inc., that under the statute a sufficient nexus with Louisiana exists “if (a) the defendant regularly advertises his products or services in the state or (b) carries on some other continuous course of activity there or (c) derives substantial revenue from goods used or consumed or from services rendered in the state. It is not necessary that this activity amount to the doing of business.”³³ In the same year, in Drilling Engineering, Inc. v. Independent Indonesian American Petroleum Company, the court said, “[i]t was the intention of the Louisiana Legislature in its enactment of R.S. 13:3201 to extend the personal jurisdiction of Louisiana courts over nonresidents to the full limits of due process under the Fourteenth Amendment.”³⁴

Recently, however, two intermediate appellate courts of Louisiana have interpreted the long-arm statute more narrowly. In Alba v. Riviere³⁵ and Robinson v. Vanguard Ins. Co.,³⁶ they have required a direct nexus between the business transacted in Louisiana by the non-resident defendant and the plaintiff’s cause of action. This interpretation is based on a literal application of the statutory language: “ ‘A court may exercise personal jurisdiction over a nonresident ... as to a cause of action arising from the nonresident’s transacting any business in this state.’ ”³⁷

After these decisions were rendered, a panel of this court in Famham v. Bristow Helicopters,³⁸ followed them, adopting the same restrictive interpretation. In interpreting Louisiana statutes, we are required to follow the state’s courts³⁹ and when the state decisions appear to us to be conflicting, we are guided by the most recent interpretation.⁴⁰ Famham followed this precept.

The decisions in Alba and Robinson, however, appear to us to be irreconcilable with the apparently clear statements of the Louisiana Supreme Court. Because in diversity cases, as well as federal question cases, service of process may be based on Louisiana statutes, and the long-arm statute is frequently utilized, in federal courts as well as in state courts, it is important that this significant question of law be clarified. We have decided, therefore, to certify the controlling question of Louisiana law in this case to the Louisiana Supreme Court.

The court believes that the question to be certified might be phrased as follows:

Was the service of process made on Garrett Corporation in this case valid under Louisiana Rev.Stat.Ann. § 13:3201(1) (West Supp.1986)?

We disclaim any intention or desire that the Supreme Court of the State of Louisiana confine its reply to the precise form or scope of the question certified.

We direct counsel for the parties to confer as soon as practical and, within 15 days, to submit to this court a proposed agreed statement of the case and an agreed phrasing of the questions to be certified.⁴¹ If the parties are unable to agree on either the statement of the case or the questions to be certified, the appellant will prepare a proposed statement of each, within 15 days, and, within seven days thereafter, the appellee will prepare and file its proposed objections to and suggested changes to the appellant’s suggestions.

1 . Sandefur v. Cherry, 718 F.2d 682, 685 (5th Cir.1983).

2 . Id.; La.Rev.Stal.Ann. § 13:72.1 (West 1983).

3 . Sandefur, 718 F.2d at 685.

4 . Id.

5 . International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945); World-Wide Volkswagen Corp. v. Wood-son, 444 U.S. 286, 291-92, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980).

6 . World-Wide Volkswagen, 444 U.S. at 291-92, 100 S.Ct. at 564.

7 . Id. at 292, 100 S.Ct. at 564; Pedalahore v. Astropark, Inc. 5th Cir., 745 F.2d 346, 349 (5th Cir.), reh’g denied, 751 F.2d 1258 (5th Cir.1984).

8 . Helicópteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 1872-73 & n. 9, 80 L.Ed.2d 404 (1984); Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 445-46, 72 S.Ct. 413, 418, 96 L.Ed. 485 (1952).

9 . Helicópteros, 104 S.Ct. at 1872 n. 9.

10 . Helicópteros, 104 S.Ct. at 1872 n. 8.

11 . 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).

12 . Helicópteros, 104 S.Ct. at 1872-73 & n. 10.

13 . 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980).

14 . World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567.

15 . Bean Dredging Corp. v. Dredge Technology Corp., 744 F.2d 1081, 1084 (5th Cir.1984).

16 . Id. at 1085.

¹⁷

18 . Id. at 1084 (quoting Nelson v. Park Industries, Inc., Til F.2d 1120, 1125-26 (7th Cir.1983), cert. denied, 465 U.S. 1024, 104 S.Ct. 1278, 79 L.Ed.2d 682 (1984).

¹⁹

20 . Pedalahore, 745 F.2d at 349.

21 . World-Wide Volkswagen, 444 U.S. at 298, 100 S.Ct. at 567.

22 . Id. at 297, 100 S.Ct. at 567 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958)); Pedalahore, 745 F.2d at 349.

23 . Pedalahore, 745 F.2d at 349 (quoting McGee v. International Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957)).

24 . Bean Dredging, 744 F.2d at 1085.

²⁵

26 . Point Landing, Inc. v. Omni Capital International, Ltd., 795 F.2d 415, 419 (5th Cir.1986) (en banc) (per curiam); DeMelo v. Toche Marine, Inc., 711 F.2d 1260, 1266-69 (5th Cir.1983); Fed.R.Civ.P. 4(e).

27 . La.Rev.Stal.Ann. § 13:3201(1) (West Supp. 1986). That section-provides:

A court may exercise personal jurisdiction over a nonresident, who acts directly or by an agent, as to a cause of action arising from any one of the following activities performed by the nonresident:

(1) Transacting any business in this state.

28 . Pedalahore, 745 F.2d at 348.

29 . Id.; La.Rev.Stal.Ann. § 13:3201 comments of Louisiana State Law Institute — 1964 (West 1968).

30 . 479 So.2d 883, 887-88 (La.1985).

31 . 389 So.2d 31, 37 (La.1979).

32 . 344 So.2d 969, 971 (La.1977).

33 . 273 So.2d 284, 287 n. 1 (Lá.1973).

34 . 283 So.2d 687, 689 (La. 1973).

35 . 457 So.2d 33, 34 (La.App. 4th Cir.), cert. denied, 462 So.2d 194 (La.1984).

36 . 468 So.2d 1360, 1369 (La.App. 1st Cir.), cert. denied, 472 So.2d 924 (La.1985).

37 . Alba, 457 So.2d at 34 (quoting La.Rev.Stal. Ann. § 13:3201).

38 . 776 F.2d 535, 537 (5th Cir.1985).

39 . Holton v. Newsome, 750 F.2d 1513, 1516 (11th Cir.1985) (per curiam).

40 . Brumley Estate v. Iowa Beef Processors, Inc., 704 F.2d 1351, 1360 (5th Cir.1983), cert. denied, 465 U.S. 1028, 104 S.Ct. 1288, 79 L.Ed.2d 690 (1984).

41 . See West v. Caterpillar Tractor Company, Inc., 504 F.2d 967 (5th Cir.1974); Allen v. Estate of Carman, 446 F.2d 1276 (5th Cir. 1971).