In Martinez v. Aero Caribbean (No. 3:11-cv-03194-WHA, filed 8/21/2014), the United States Court of Appeals for the Ninth Circuit held service of process on a corporation’s officer, within the forum state, does not establish general personal jurisdiction over the corporation unless the corporation’s contacts with the forum render it essentially at home in the state.
Decedent, Lorenzo Corazon Mendoza, was traveling by airplane when the plane crashed, killing everyone aboard. Defendant Avions De Transport Régional (ATR) manufactured the airplane that crashed. Plaintiffs Lorenzo Martinez, Eliezer Martinez, Eliu Mendoza and Gloria Montes (Plaintiffs) filed suit against ATR as heirs of decedent.
ATR is a business entity organized under French law with its principal place of business in France. It is not licensed to do business in California, and it has no office or other physical presence there. It has purchased parts from California suppliers, sent representatives to California to promote its business, and advertised in trade publications available in California. It has also sold airplanes to a California corporation. Empire Airlines flies from Santa Barbara to Ontario using ATR planes on a regular basis; however, Empire Airlines purchased the ATR planes secondhand from third parties, and never directly from ATR. At the time of the crash, ATR North America (a wholly owned subsidiary of ATR) had its headquarters in Virginia, and has since relocated to Florida.
Plaintiffs served the summons and complaint on ATR at its headquarters in France. ATR moved to dismiss the complaint for lack of personal jurisdiction, and the District Court held the motion in abeyance and granted Plaintiffs two months to conduct jurisdictional discovery. During that period, Plaintiffs served the summons and complaint on ATR’s Vice President of Marketing while he was in California attending a conference on ATR’s behalf. ATR contends this service was ineffective to give Plaintiffs general personal jurisdiction over ATR. The District Court granted ATR’s motion to dismiss.
On appeal, Plaintiffs relied on the holding of Burnham v. Superior Court (1990) 495 U.S. 604, 610, which held personal service on an individual defendant is sufficient, without regard to the individual’s contacts with the forum state, or whether the cause of action is at all related to his activities there. Terming this type of service “tag jurisdiction,” the Burnham court effectively held an individual who is personally served within the bounds of the forum state is subject to general jurisdiction. Burnham, however, left undecided the issue in the present case: whether personal service upon an officer of a corporation, within the forum state, is sufficient to subject the corporation to general jurisdiction in the forum state.
The Ninth Circuit answered this question in the negative, holding Plaintiffs’ service of process insufficient to subject ATR to general personal jurisdiction in California. The Court noted that Burnham did not discuss tag jurisdiction with regard to artificial persons (i.e., business entities). Noting that corporations can only be present in a forum state through their contacts, the Court held: “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.”
Citing the time honored holding of International Shoe v. Washington (1945) 326 U.S. 310, 316-317, the Ninth Circuit further held a corporation may only be subject to personal jurisdiction when its contacts with the forum state support either specific or general jurisdiction. Because ATR’s contacts with California were not sufficiently related to the underlying facts of Plaintiffs’ suit, nor sufficiently pervasive to subject ATR to general jurisdiction in California, the Ninth Circuit affirmed the district court’s dismissal of the complaint for lack of personal jurisdiction.
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