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September 16, 2014
  Martinez v. Caribbean
Headline: Ninth Circuit Affirms the Dismissal for Lack of Personal Jurisdiction of a Tort Lawsuit Against French Company.

Area of Law: Civil Procedure

Issue(s) Presented: Whether, under Burnham v. Superior Court, service of process on a corporation's officer within the forum state creates general personal jurisdiction over the corporation.

Brief Summary:
Plaintiffs, the heirs of decedent Lorenzo Mendoza Cervantes, appealed the district court's dismissal of their claims against Avions de Transport Regional ("ATR") for lack of personal jurisdiction and denial of their request for additional jurisdictional discovery. The Ninth Circuit granted review to determine whether, under Burnham v. Superior Court, service of process on a corporation's officer within the forum state creates general personal jurisdiction over the corporation.

The Court rejected Plaintiffs reliance on Burnham to argue that in-state service of process on a corporate officer who is acting on behalf of the corporation at the time of service creates "tag jurisdiction" over the corporation. The Court held that "while a corporation may in some abstract sense be 'present' wherever its officers do business, such presence is not physical in the way contemplated by Burnham." The Court also reiterated that it has never indicated that Burnham applies to corporations.

The Court next emphasized that it has required an analysis of a corporation's contacts with the forum state even when tag jurisdiction would have made the analysis unnecessary. The Court found that the five sets of ATR's contacts with California that plaintiffs relied on were plainly insufficient to subject ATR to general jurisdiction in California.

The Court also held that the district court did not abuse its discretion in denying plaintiffs' request for additional discovery, reasoning that nothing plaintiffs could discover about ATR North America's contacts with California would make ATR "essentially at home" in California.

The Ninth Circuit concluded that ATR is not subject to personal jurisdiction in California, Burnham does not apply to corporations, and ATR's contacts with California are insufficient to support general jurisdiction - and, thus, affirmed the district court's dismissal of plaintiffs' claims against ATR for lack of personal jurisdiction.

Extended Summary: Lorenzo Carazon Cervantes was a passenger on an airplane that crashed in Cuba, killing everyone aboard. ATR, a French company, designed and manufactured the airplane. Cervantes' widow and his three sons sued ATR in the United States District Court of the Northern District of California, alleging claims for products liability, negligence, breach of warranty, and wrongful death against ATR.

Plaintiffs served the summons and complaint on ATR at its headquarters in France. ATR moved to dismiss the complaint for lack of personal jurisdiction. The district court gave plaintiffs two months to conduct limited jurisdictional discovery. During the discovery period, plaintiffs served copies of the summons and complaint on ATR's vice president of marketing while he was in California attending a conference on ATR's behalf.

First, the Court discussed the two kinds of personal jurisdiction that a state's courts may exercise over an out-of-state defendant - special jurisdiction and general jurisdiction - which can be traced back to the Court's decision in International Shoe Co. v. Washington. The Court then discussed International Shoe's reconceptualization of the personal jurisdiction approach famously described in Pennoyer v. Neff and development of "a new concept of contacts-based jurisdiction as a flexible and context-specific alternative to Pennoyer's focus on a defendant's physical presence within the forum."

The Court reiterated that, in Burnham, the Court held that "Pennoyer's category of 'jurisdiction based on physical presence alone' survived International Shoe as an independent basis for personal jurisdiction, at least for natural persons." In Burnham, the Court reaffirmed "tag jurisdiction" rule, which provides that "personal service upon a physically present defendant suffice[s] to confer jurisdiction, without regard to whether the defendant was only briefly in the State or whether the cause of action was related to his activities there."

The Court then rejected Plaintiffs reliance on Burnham to argue that in-state service of process on a corporate officer who is acting on behalf of the corporation at the time of service creates tag jurisdiction over the corporation.

The Court noted that none of the various opinions in Burnham discussed tag jurisdiction with respect to artificial persons. The Court reasoned that, unlike natural persons who can be physically present in a single ascertainable place, corporations can only act through their agents, can do so in many places simultaneously, and can be present only through their contacts with the state. The Court thus held that "while a corporation may in some abstract sense be 'present' wherever its officers do business, such presence is not physical in the way contemplated by Burnham."

Second, the Court emphasized that it has required an analysis of a corporation's contacts with the forum state even when tag jurisdiction would have made the analysis unnecessary. The Court discussed Perkins v. Benguet Consolidated Mining Co., where the decision turned on the extent of the company's contacts with the forum state and not on the in-state service on the company's president.

The Court reiterated that it has never indicated that Burnham applies to corporations. The Court then distinguished the only two federal courts of appeals that have reached decisions arguably contrary to the Court's holding - the First Circuit did not explain or cite any supporting cases and the Second Circuit case involved a partnership.

The Court opined that personal jurisdiction would exist over ATR only if ATR's contacts with California support either specific or general jurisdiction. Plaintiffs did not argue that specific jurisdiction exists over ATR, given that no part of the lawsuit arose out of or related to ATR's contacts with California.

The Court then found that the five sets of ATR's contacts with California that plaintiffs relied on were plainly insufficient to subject ATR to general jurisdiction in California. The Court noted the demanding nature of the standard for general personal jurisdiction over a corporation, as evidenced in Daimler, which emphasized that "the 'paradigm' fora for general jurisdiction are a corporation's place of incorporation and principal place of business." The Court thus held that this case is not an exceptional case that would allow general jurisdiction anywhere else - reasoning that ATR is organized and has its principal place of business in France; it has no offices, staff, or other physical presence in California; it is not licensed to do business in the state; and its California contacts are minor compared to its worldwide contacts.

Last, the Court addressed plaintiffs' request for additional jurisdictional discovery about ATR North America. It noted that nothing plaintiffs could discover about ATR North America's contacts with California would make ATR "essentially at home" in California. Thus, the district court did not abuse its discretion in denying plaintiffs' request for additional discovery.

Based on the above discussion, the Ninth Circuit concluded that ATR is not subject to personal jurisdiction in California, Burnham does not apply to corporations, and ATR's contacts with California are insufficient to support general jurisdiction - and, thus, affirmed the district court's dismissal of plaintiffs' claims against ATR for lack of personal jurisdiction.

For the full opinion: http://cdn.ca9.uscourts.gov/da...14/08/21/12-16043.pdf

Panel: Barry G. Silverman, William A. Fletcher, and Jay S. Bybee, Circuit Judges.

Date of Issued Opinion:
August 21, 2014

Docket Number: 12-16043

Decided: Affirmed.

Case Alert Author:
Beverly E. Bashor

Counsel: Brian J. Malloy (argued), Thomas John Brandi, and Daniel Dell'Osso, The Brandi Law Firm, San Francisco, California, for Plaintiffs-Appellants; Eric C. Strain (argued), Cameron Robert Cloar, and Brian C. Dalrymple, Nixon Peabody LLP, San Francisco, California, for Defendant-Appellee.

Author of Opinion: W. Fletcher, Circuit Judge.

Case Alert Circuit Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 09/16/2014 01:09 PM     9th Circuit  

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