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State National Insurance Co. v. Textron Aviation Inc.

United States District Court, D. Kansas

May 24, 2018

TEXTRON AVIATION, INC., et al., Defendants.



         This case comes before the court on Defendant TAT Technologies' Ltd. (“TAT”) motion to dismiss for lack of personal jurisdiction. (Doc. 42.) The motion has been fully briefed and is ripe for decision. (Docs. 50, 51.)

         I. Procedural History and Relevant Facts

         Plaintiff State National Insurance Company filed this action as subrogee of N140DA, LLC. (Doc. 5 at 1.) The action was originally filed in the Northern District of Oklahoma. Plaintiff brought this action against Textron[1], Limco Airepair[2] and TAT. Prior to service on TAT, Plaintiff and Textron agreed to transfer this action to this district. (Doc. 27.)

         The amended complaint, which was originally filed while the case was pending in Oklahoma, alleges that TAT is a foreign company with its principal place of business in Israel. Limco is a domestic corporation with its principal place of business in Tulsa, Oklahoma, and is a licensed distributor for TAT. Textron is incorporated in Kansas and has its principal place of business in Wichita, Kansas. Plaintiff further alleges that venue is proper in Oklahoma because a substantial part of the events at issue occurred in Tulsa County.

         Plaintiff has alleged product liability claims due to an alleged failure of a heat exchanger (“precooler”) that was installed on a Citation Model 525A, serial number 525A140 (the “aircraft”) by Textron. Plaintiff alleges that the precooler was “designed, manufactured, and marketed by Defendant TAT and distributed by Defendant Limco.” (Doc. 5 at 5.) Textron manufactured the aircraft and sold it in new condition to N140DA, LLC in 2003. The amended complaint alleges that Textron and TAT “have sufficient contacts with the State of Oklahoma to be subject to the jurisdiction of this court due to the placing of their products into the stream of commerce within the state of Oklahoma.” (Doc. 5 at 2.)

         On December 9, 2014, there were significant damages to the aircraft, which allegedly occurred in Tulsa, due to the failure of the precooler in the right wing.[3] (Doc. 5 at 3-5, Exh. 1.) Plaintiff paid for the costs to repair the aircraft. Plaintiff brings this action to recover its damages.

         II. Analysis

         TAT moves to dismiss the amended complaint for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2). On a Rule 12(b)(2) motion to dismiss, Plaintiff must make a prima facie showing that the court has personal jurisdiction over defendants. Old Republic Ins. Co. v. Continental Motors, Inc., 877 F.3d 895, 903 (10th Cir. 2017). The court must accept the allegations in the amended complaint as true and resolve all factual disputes in Plaintiff's favor notwithstanding contrary positions by TAT. Id.

         “To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment.” TH Agriculture & Nutrition, LLC v. Ace European Group, Ltd., 488 F.3d 1282, 1286-87 (10th Cir. 2007). Because the Kansas long-arm statute is construed liberally to allow jurisdiction to the full extent permitted by due process, the court ordinarily proceeds directly to the constitutional issue. Id. at 1287 (citing OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1087 (10th Cir. 1998)).

         “The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts ties, or relations.'” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985). Therefore a “court may exercise personal jurisdiction over a nonresident defendant only so long as there exist minimum contacts between the defendant and the forum state.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1979). The requisite minimum contacts may be established under one of two theories: “specific jurisdiction” or “general jurisdiction.” If the requisite minimum contacts are met, the court proceeds to determine whether the “assertion of personal jurisdiction would comport with fair play and substantial justice.” Old Republic Ins. Co., 877 F.3d at 903.

         Plaintiff contends that the amended complaint establishes specific jurisdiction in this matter. (Doc. 50 at 4.) Specific jurisdiction applies when the suit arises out of or relates to a defendant's contacts with the forum state. Monge v. RG Petro-Machinery (Grp.) Co. Ltd., 701 F.3d 598, 613 (10th Cir. 2012). To satisfy specific jurisdiction, Plaintiff's injury “must arise out of or relate to activities that [defendants] purposefully directed at residents of the forum.” Id. at 617. Plaintiff argues that this action arises out of TAT's contacts with Kansas because TAT “sold the precoolers to a Kansas manufacturer for purposes of them being incorporated into aircrafts manufactured and sold in Kansas.” (Doc. 50 at 4.)

         TAT argues in its motion that Plaintiff's amended complaint makes no assertion that personal jurisdiction is proper in this court and that no facts relate to any activities TAT undertook in Kansas. (Doc. 42 at 2.) TAT's motion includes an affidavit which attests to the fact that TAT does not have any operations in Kansas, had no interaction with the purchaser, does not maintain an office in Kansas, does not advertise or solicit business in Kansas and has no assets or accounts in Kansas. Plaintiff's brief in response to TAT's motion largely cites to an opinion by Judge Lungstrum in Federal Insurance Company v. TAT. (Doc. 50 at 4-5.)

         As stated by TAT in its reply brief, a finding of specific jurisdiction is based on the facts in a particular case. See Old Republic Ins. Co., 877 F.3d at 903 (“specific (case-linked) jurisdiction”). In this matter, Plaintiff argues that there are sufficient contacts with Kansas due to TAT's actions (or, alternatively, the actions of Limco as TAT's wholly owned subsidiary). However, the amended complaint only refers to Kansas with respect to the allegations that Textron (Cessna) is incorporated in Kansas and has a principal place of business in Wichita, Kansas. The amended complaint is silent on issues that may tend ...

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