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Montgomery v. Airbus Helicopters, Inc.

Supreme Court of Oklahoma

March 6, 2018

ANKE MONTGOMERY, Individually and as Personal Representative of the Estate of Mark Montgomery, Deceased; EAGLEMED, L.L.C.; a Delaware Corporation, and STARR INDEMNITY AND LIABILITY COMPANY, a Texas Corporation and Domiciliary, Plaintiffs/Appellants,
AIRBUS HELICOPTERS, INC., a Delaware Corporation; And SOLOY, LLC., Defendants/Appellees, and HONEYWELL INTERNATIONAL, INC., Defendant.


          Robert D. Tomlinson, Ross N. Chaffin, Oklahoma City, Oklahoma, and Timothy A. Loranger (pro hac vice), Los Angeles, California, for Plaintiff/Appellant Anke Montgomery.

          Craig Allen Fitzgerald, Steven J. Adams, Tulsa, Oklahoma, and Gary Don Swaim (pro hac vice), Dallas, Texas, for Plaintiffs/Appellants EagleMed, L.L.C. and Star Indemnity and Liability Company.

          Mark R. McPhail, Alex M. Sharp, Oklahoma City, Oklahoma, and Eric C. Strain (pro hac vice), San Francisco, California, for Defendant/Appellee Airbus Helicopters, Inc.

          Brock C. Bowers, Katie R. McCune, Oklahoma City, Oklahoma, and Geffrey W. Anderson (pro hac vice), Jonathan W. Harrison (pro hac vice), Fort Worth, Texas, for Defendant/Appellee Soloy, L.L.C.

          KAUGER, J.

         ¶0 The plaintiff/appellant, EagleMed, L.L.C. (EagleMed) purchased an unassembled helicopter from Airbus Helicopters, Inc. (Airbus) in Texas. EagleMed transported the helicopter to Wichita, Kansas, where it was assembled at EagleMed's headquarters to be used in Oklahoma as an ambulance helicopter. The engine used in the helicopter was manufactured by defendant, Honeywell International, Inc. (Honeywell) with design installation instructions by the defendant/appellee, Soloy, L.L.C, (Soloy). The helicopter crashed in Oklahoma and killed two Oklahoma residents: the pilot and a flight nurse. The pilot's widow/personal representative, EagleMed, and the helicopter's insurer, Starr Indemnity and Liability Company (Star), filed a products liability/negligence lawsuit in Oklahoma County, Oklahoma, against Airbus, Soloy, and Honeywell. The trial court dismissed Airbus and Soloy for lack of personal jurisdiction, and the Court of Civil Appeals affirmed. We granted certiorari to address the issue of minimum contacts with the State of Oklahoma. We hold that the trial court did not err in granting the motion to dismiss for a lack of personal jurisdiction.

         ¶1 We granted certiorari to address whether the defendants/appellees whose products were used to make an ambulance helicopter had sufficient minimum contacts with the State of Oklahoma in order to establish personal jurisdiction over them after the helicopter crashed in Oklahoma, killing two Oklahoma residents. We hold that they do not.


         ¶ 2 This cause arises from an ambulance helicopter crash (accident helicopter), on February 22, 2013, shortly after takeoff in Oklahoma City, Oklahoma. The pilot, Mark Montgomery (pilot), and his crew, responded to an emergency medical transport call at Integris Baptist Hospital in Oklahoma City, Oklahoma for Watonga, Oklahoma. The crash killed two Oklahoma residents who were onboard the helicopter: the pilot, and the flight nurse, Chris Denning. The onboard flight paramedic, Billy Wynne, survived with severe injuries which resulted in amputation. The crash destroyed the helicopter. Allegedly, the crash was witnessed by dozens of Oklahoma residents.

         ¶3 EagleMed, L.L.C. (EagleMed), a Delaware incorporated L.L.C. with its principal place of business in Wichita, Kansas, employed the Oklahoma pilot and the crew. EagleMed operates a helicopter ambulance service for the region. The crash was allegedly caused by an air intake defect which allowed ice to accumulate in the air inlet and enter the compressor, causing the engine to flame out and crash.

         ¶4 Airbus Helicopters SAS, a French Company, designed and manufactured the accident helicopter in France, and sold it to the appellee, Airbus Helicopters, Inc. (Airbus), a Grand Prairie, Texas, company. The original engine was replaced by Honeywell International, Inc. (Honeywell) of Morristown, New Jersey, who designed and manufactured the replacement engine. An Olympia, Washington company, Soloy, L.L.C. (Soloy), provided the engineering and design for installation of the engine. Starr Indemnity and Liability Company (Starr) insured the helicopter.

         ¶5 In 2004, Airbus sold the helicopter, an AS350B, to Ballard Aviation, Inc. d/b/a EagleMed. Airbus delivered the helicopter in an unassembled condition to Texas for shipment, but it did not make the arrangements for it to be delivered to Wichita, Kansas. Rather, the Airbus standard practice was to deliver their helicopters to their place of business in Texas, and have the buyers handle any further transportation services. The purchase agreement between EagleMed and Airbus contained a forum selection and choice of law clause regarding any litigation to take place in Texas. [1]

         ¶6 According to Airbus, it: 1) does not conduct any business activities in Oklahoma; 2) is not registered to do business in Oklahoma, nor does it own any real or personal property in Oklahoma; 3) does not keep any officers, directors, employees, or agents in Oklahoma; and 4) does not hold any bank accounts or have any telephone listings in Oklahoma. However, Airbus did know that this helicopter would be going to EagleMed's headquarters in Wichita and purportedly knew it would be used in Oklahoma.

         ¶7 On July 21, 2008, four years after EagleMed purchased the helicopter from Airbus, Soloy sold and shipped an "engine conversion kit" to EagleMed at their headquarters in Wichita, Kansas, which was installed shortly thereafter. According to Soloy, it did not specifically design its conversion kit for the Oklahoma market, nor did it direct advertising or marketing materials specifically to Oklahoma. Soloy has no offices, agents, employees, or property in Oklahoma nor does it distribute to Oklahoma. [2]

         ¶8 In 2009, EagleMed sold the helicopter to Wells Fargo Equipment Finance, Inc. who leased it back to EagleMed. EagleMed is an established Oklahoma air ambulance service. It is licensed by the Oklahoma Secretary of State and the Department of Health. It has five Oklahoma "bases, " serving the entire state. At the time it purchased the helicopter, EagleMed had two Oklahoma "bases" and eight helicopters. The purchase was specifically for the establishment of its third base with Airbus' alleged knowledge.

         ¶9 EagleMed operates out of three states, but services five states: Kansas, Oklahoma, Missouri, Arkansas, and Nebraska. The main base in Wichita advertised that it could service the northern part of Oklahoma in less than 24 minutes. Airbus has offered continuous technical support to EagleMed regarding their helicopters, but none of the communication was directed to a base in Oklahoma. All communication was made with the main base in Wichita, even though it is likely that some of the communication regarded helicopters which were located in Oklahoma.

         ¶10 On August 16, 2013, the flight nurse's family (Denning family) sued Airbus, Airbus SAS, Soloy, and Honeywell for wrongful death, negligence, and products liability in the 141st District Court in Tarrant County, Texas. On April 7, 2014, the pilot's widow intervened alleging similar claims. On June 23, 2014, EagleMed also intervened in the Texas lawsuit, alleging claims for loss of the helicopter and other damages. The flight paramedic filed a separate claim without joining the other plaintiffs. In December of 2014, the defendants in the Texas lawsuit filed counterclaims against the pilot, arguing that the pilot's operational errors caused or contributed to the crash.

         ¶11 On February 13, 2015, the pilot's widow, EagleMed, and Starr, filed a products liability/negligence lawsuit against Airbus, Honeywell, and Soloy, in the District Court of Oklahoma County, Oklahoma. The same day, the widow and EagleMed filed a notice of non-suit in the Texas action which the Texas Court granted on February 25, 2015. [3] They alleged that venue was proper in Oklahoma, because the accident occurred in Oklahoma County and because the defendants/appellees could properly be sued in Oklahoma County.

         ¶12 On March 23, 2015, Airbus and Soloy filed motions to dismiss for lack of personal jurisdiction pursuant to 12 O.S. §2012 (B)(2) [4] and under the doctrine of forum non conveniens. [5] Honeywell filed a motion to dismiss under the doctrine of forum non conveniens, but it did not raise the defense of personal jurisdiction under 12 O.S. §2012 (B)(2), thus waiving the issue. [6] After additional briefings, a hearing was held on May 1, 2015, in which Montgomery's request for additional time to conduct jurisdictional discovery was denied.

         ¶13 In an order filed May 20, 2015, the trial court granted motions to dismiss for lack of personal jurisdiction to Airbus and Soloy, but it did not make any finding regarding forum non conveniens. The court determined that there was not enough evidence to establish personal jurisdiction and that additional discovery would be unnecessary. The claims against defendant Honeywell were stayed, pending resolution of an appeal. [7] The Court of Civil Appeals affirmed the trial court. We granted certiorari on April 24, 2017.


         ¶14 Airbus and Soloy argue that they have no contacts with Oklahoma which would allow an Oklahoma court to assert jurisdiction over them. The pilot's widow, EagleMed, and Star Indemnity argue that because Airbus and Soloy sold their product to a company that has, and continues to use, millions of dollars worth of their products in Oklahoma. They also argue that because of these sales, Airbus and Soloy should be subject to Oklahoma jurisdiction. The record gives no indication that Airbus continued to earn revenue from this particular helicopter after its initial sale to EagleMed. In fact, at the time of the crash, the helicopter was not even owned by EagleMed.

         ¶15 In personam jurisdiction is the power to render a binding judgment against a defendant. [8] When a plaintiff's cause of action does not arise directly from a defendant's forum related activities, a court could nonetheless maintain general personal jurisdiction over the defendant based on the defendant's business contacts with the forum state. [9] However, general jurisdiction has been modified by the United States Supreme Court in Daimler AG v. Bauman, 134 S.Ct. 746, 571 U.S. 20, 187 L.Ed.2d 624 (2014) which reaffirmed that general jurisdictions exists only over a defendant who is at "home" within a state. [10]

         ¶16 It is undisputed that general jurisdiction does not exist against either defendant in this cause. Even if it were not agreed to be a non-issue, the facts of this cause could not pass the Daimler, supra, test for general jurisdiction. Nevertheless, if a defendant has purposefully directed activities at the residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities, specific jurisdiction over a nonresident defendant may exist unless jurisdiction would be unreasonable or would offend the traditional notions of substantial justice and fair play. [11]

         ¶17 We review dismissal for lack of personal jurisdiction over a non-resident defendant de novo. [12] When in personam jurisdiction is challenged, the jurisdiction over a non-resident defendant cannot be inferred, but instead must affirmatively appear from the trial court record, and the burden of proof in the trial court is upon the party asserting that jurisdiction exists. [13] We canvas the record for proof that the nonresident party has sufficient contacts with the state to assure that traditional notions of fair play and substantial justice will not be offended if this state exercises in personam jurisdiction. [14]

         ¶18 Personal jurisdiction is a protection granted by the Due Process Clause of the Fourteenth Amendment of the United States Constitution [15] and by the Oklahoma Constitution. [16] Oklahoma's long arm statute for establishing specific jurisdiction is 12 O.S. 2011 §2004 (F). [17] It sets the limits of the state's jurisdiction over a nonresident to the outer limits permitted of the Oklahoma and United States Constitutions. [18] Consequently, the outer limits as defined by the United States Supreme Court are relevant to our inquiry.

         ¶19 Recently, the United States Supreme Court decided Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco, et al., 137 S.Ct. 1772, 582 U.S. ___, 198 L.Ed.2d 395 (2017). In Bristol-Myers, the majority of the plaintiffs were not from the state where they filed their lawsuit, nor were they injured in that state. Nevertheless, it does provide the latest specific jurisdiction analysis from the Court. In Bristol-Myers, a group of more than 600 plaintiffs sued the pharmaceutical company over the drug Plavix in California, even though most of the plaintiffs were not California residents [only 86 were California residents].

         ¶20 The drug company was incorporated in Delaware and headquartered in New York and maintained substantial operations in both New York and New Jersey. The company sells Plavix in California; has five research and laboratory facilities in California; employs about 250 sales representatives in California; and maintains a small state-government advocacy office in Sacramento. However, it did not develop, create a marketing strategy, manufacture, label, package, or work on regulatory approval for Plavix in California. California sales of the drug accounted for only 1% of the company's total revenue for the years 2006 and 2012. The nonresident plaintiffs did not allege they were injured or treated for injuries in California.

         ¶21 The drug company moved to quash service of summons on the nonresident's claim, but the California Superior Court denied this motion finding that the California courts had general jurisdiction over the drug company. On appeal, the California Court of Appeals determined that California did not have general jurisdiction based on Daimler, supra, but that it did have specific jurisdiction over the nonresidents' claims. The California Supreme Court affirmed and the United States Supreme Court reversed, holding that California lacked specific jurisdiction to entertain the nonresidents' claims.

         ¶22 In Bristol-Myers, supra, the Court expressly rejected California's "sliding scale approach" which permitted the exercise of specific jurisdiction based on the notion that the more wide ranging the forum contacts, the more readily a connection between the forum contacts and the claim is shown. The Court noted that:

1) there must be an affiliation between the forum and the underlying controversy such as an activity or an occurrence that takes place in the forum State, which subjects the cause to the State's regulation; and
2) an adjudication of issues must derive from, or be connected with, the very controversy that establishes jurisdiction.

         ¶23 The Court also delineated that the interests to consider begin with the interests of the forum State and of the plaintiff in proceeding with the cause in the plaintiff's forum of choice. The primary concern which it recognized was the burden on the defendant. The burden on the defendant requires a court to consider the practical problems resulting in litigation in the forum, and also the more abstract matter of submitting to the coercive power of a State that may have little legitimate interest in the claims in question.

         ¶24 Relying on another case concerning specific jurisdiction, Walden v. Flore, 134 S.Ct. 1115, 571U.S. 12, 188 L.Ed.2d 12 (2013), the Court noted that a defendant's relationship with a third party, standing alone, is an insufficient basis for jurisdiction. Because it was not alleged that the drug company engaged in relevant acts together with its California distributor, or that it was derivatively liable for the distributor's conduct the Court held the requirements of International Shoe Co., v. Washington, 66 S.Ct. 154, 326 U.S. 310, 90 L.Ed 95 (1945) were not satisfied. Because the non-California residents were not attempting to show that the drug they took was distributed to the pharmacies that dispensed to them in California, the fact that the drug company contracted with a California distributor was not enough to establish personal jurisdiction.

         ¶25 In Waldenv.Flore, supra, a Georgia police officer working as a Drug Enforcement Agent (DEA) at a Georgia airport confiscated $97, 000.00 in cash that the plaintiffs, California and Nevada residents, were carrying on August 8, 2006. According to the plaintiffs, they were professional gamblers and had been gambling at a casino in Puerto Rico. The Georgia police officer advised the plaintiffs that their funds would be returned ...

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