By: Austin Bartlett, BartlettChen LLC

In the wake of Daimler AG1 and Bristol-Myers Squibb2, plaintiffs are confronted with a daunting jurisdictional hurdle when deciding where to file suit. Commercial airplane accidents frequently involve a mix of defendants, ranging from the airline to the airframe manufacturer to component part manufacturers and others. It is exceedingly rare that all of these entities will be deemed “at home” in the same state, such that general jurisdiction exists in a single forum. It is also increasingly difficult to show that each defendant’s contacts with the forum state have a sufficient connection to a plaintiff’s claims to establish specific jurisdiction. Southwest Flight 1380 is illustrative of the personal jurisdiction puzzle that aviation attorneys must try to solve in light of the U.S. Supreme Court’s recent personal jurisdiction rulings.

Factual Background

On April 17, 2018, Southwest Airlines operated a regularly scheduled domestic passenger flight, SWA 1380, from LaGuardia Airport in Queens, New York to Dallas Love Field in Dallas, Texas. Southwest’s aircraft, a Boeing 737-7H4, registered as N772SW, was powered by two CFM56-7B engines. There were 144 passengers aboard from all over the United States, including New Mexico, Texas, New York, Louisiana, and elsewhere.

At approximately 11:03 Eastern time, at an altitude of 32,000 feet, the left engine failed. According to the NTSB, the number 13 fan blade (there are 24 total) separated at the hub and portions of the engine inlet and cowling broke off.3

Shrapnel from the engine inlet and cowling struck the aircraft’s wing and fuselage and knocked out a passenger window (seat 14). This caused the aircraft to rapidly depressurize and pull the passenger seated next to the window, Jennifer Riordan, partially out of the aircraft. As a result, she tragically died.

The pilots conducted an emergency descent and diverted to Philadelphia International Airport. In addition to one fatality, eight other passengers were injured, and several other passengers reportedly suffered emotional distress.

Based on the above sequence of events, potential defendants may include one or more of the following: the airframe manufacturer (Boeing); the engine manufacturer (CFM International, a company jointly owned by General Electric Company and Safran of France), engine component part suppliers (identity unknown), and the airline (Southwest Airlines).

The next question, of course, is where passengers may properly file suit.

General Jurisdiction

Historically, the general jurisdiction analysis focused on whether defendants were “doing business” within a state by having “continuous and systematic general business contacts with the forum state.” But the U.S. Supreme Court’s decision in Daimler AG. v. Baum, created a seismic shift in the general jurisdiction analysis. Eschewing the prior “doing business” standard, the Court held that a corporation can only be subject to general jurisdiction when it has such pervasive connections with a state that it is essentially “at home” in that state.4 The U.S. Supreme Court further circumscribed the general jurisdiction analysis by suggesting that a corporation’s “home” is generally limited to two jurisdictions: one, the state where the corporation’s principal place of business is located and, two, the state where it is incorporated.5 While the U.S. Supreme Court hinted that a “third jurisdiction” may exist in an “exceptional case,”6 such as when a corporation’s contacts with a state are “so substantial and of such a nature as to render the corporation at home in that State,” the majority of cases decided post-Daimler have tried to close this narrow opening.7 We can expect that the contours of the “exceptional case” will continue to be litigated.

In light of the above, the general jurisdiction analysis generally comes down to this: Where is a corporation incorporated and where is its principal place of business? Applying the general jurisdiction rule to Southwest Flight 1380 yields the following results:

Table 1 – Southwest Flight 1380 “General Jurisdiction” Forums

Entity

Jurisdiction 1

(State of Principal Place of Business)

Jurisdiction 2

(State of Incorporation)

The Boeing Company

Chicago, Illinois

Delaware

Southwest Airlines

Dallas, Texas

Texas

General Electric Company

Boston, Massachusetts

New York

Safran, S.A.

Paris, France

France

Safran Aircraft Engines

Courcouronnes, France

France

CFM International

(50/50 Joint Company of GE and Safran)

See GE and Safran above

See GE and Safran above

As illustrated in Table 1, the potential defendants’ principal places of business and states of incorporation are not located in the same forum. In practical terms, this means that a passenger may not be able to establish general jurisdiction against multiple defendants arising out of the same accident in a single forum.

But what about the “third jurisdiction” the U.S. Supreme Court spoke of in Daimler? Chicago-Midway Airport, for example, is Southwest Airlines’ busiest airport in the nation with up to 259 daily departures to 69 cities. And, Southwest has been operating out of Chicago-Midway Airport for 33 years. Given the duration and intensity of these contacts with Chicago, would a court find that they are “so substantial” as to warrant the exercise of general jurisdiction? Before Daimler, a court would likely find general jurisdiction based on these “systematic and continuous” contacts. Post Daimler, this is an open question, and the answer may very well depend on which court is called upon to decide it.

Specific Jurisdiction

In Daimler’s wake, most jurisdictional skirmishes will now be fought over specific jurisdiction. Unlike general jurisdiction, which is “all purpose” jurisdiction and allows any lawsuit to to be brought against a defendant in its “home” state, specific jurisdiction requires a connection between a defendant’s suit-related conduct and the forum state. As the U.S. Supreme Court made plain in Bristol-Myers Squibb Co., specific jurisdiction only applies when there is a connection between the forum and the specific claims at issue.8 In other words, it is “case-linked” jurisdiction.

Following Bristol-Myers Squibb Co., courts have further constricted the specific personal jurisdiction analysis, including in airplane accident litigation. In at least two reported decisions, Hinkle v. Continental Motors, Inc. and Montgomery v. Airbus Helicopters, Inc., courts found that specific personal jurisdiction was lacking against a product manufacturer even though suit was brought in the state where the crash occurred.9 One of these courts went on to declare that the “totality of the contacts” and “stream of commerce” tests were now dead.10

While the U.S. Supreme Court has formulated clear rules for deciding whether general jurisdiction exists (e.g., PPB or state of incorporation), the specific personal jurisdiction analysis remains murky. What is clear, however, is that a court must examine the relationship between a plaintiff’s claims and the defendant’s conduct in that forum. If there is not a clear connection between a defendant’s forum-related conduct and the specific claims at issue, then the court will likely dismiss the case for lack of personal jurisdiction.

Applying Bristol-Myers Squibb Co. to the Southwest Flight 1380 accident thus requires an evaluation of the connection between each defendant’s conduct in the forum and the plaintiff’s specific claims. In the Southwest Flight 1380 accident, the potential defendants fall into two primary groups: the product defendants (Boeing, GE, Safran, and others) and the airline defendant (Southwest Airlines).

With respect to the product defendants, the claims will likely center on defects in the design and manufacture of the engines and inadequate testing and inspection procedures, which prevented the discovery of metal fatigue of the fan blade. And for Southwest, the claims will likely relate to inadequate maintenance and inspection of the aircraft engines, including the fan blades.

Given that the engine failed in Philadelphia, passengers were injured in Philadelphia, and the aircraft was diverted to Philadelphia, it is logical that some passengers will bring suit there. Indeed, the only suit filed to date, Chavez v. Southwest Airlines, Inc., et al., 18-cv-1769, was brought in the Eastern District of Pennsylvania. From a review of that complaint, it appears the plaintiff is asserting that the court has both general and specific jurisdiction over the defendants.

In assessing whether specific jurisdiction exists in Chavez, the court will need to analyze the connection between each defendant’s conduct in Pennsylvania and the specific claims asserted. The fundamental question is how broadly the court should interpret the claims in plaintiff’s complaint. With respect to the product defendants, is the failure of the engine in Pennsylvania and the resulting injuries sufficient to give rise to specific personal jurisdiction, or must the engine also be designed, manufactured, and inspected there by the product defendants? Similarly for Southwest Airlines, is it sufficient that the engine failed in Pennsylvania and injured Southwest’s passengers in that forum, or must the engine also be maintained and inspected by Southwest in Pennsylvania? After Bristol-Myers Squibb Co., the answer to these questions is not clear-cut and may vary depending on the jurisdiction.11

But the Chavez case illustrates another point. That is, irrespective of the merits of a personal jurisdiction defense, it may not always make strategic sense to pursue it. If General Electric were to pursue such a defense in the Chavez case, for example, it may be sued in New York state court, its state of incorporation, and end up trading a federal forum for a state one due to the forum defendant rule.

Conclusion

Like most other commercial aviation accidents, Southwest Flight 1380 involves parties that are scattered throughout the United States and abroad. In light of recent U.S. Supreme Court decisions in personal jurisdiction cases, this poses significant difficulties for the parties and the judiciary. While the U.S. Supreme Court has created a clear set of rules in general jurisdiction cases, by restricting general jurisdiction for a corporation to only the states of incorporation and its principal place of business, the Court has made it difficult to pursue multiple defendants arising out of the same accident in a single forum. The U.S. Supreme Court’s specific personal jurisdiction rules are not nearly as demanding as general jurisdiction, but they too have made it more difficult to pursue multiple parties in one forum. The practical effect of these rulings is a multiplicity of lawsuits, which results in litigation inefficiencies, potentially inconsistent rulings, discovery schedules, and fault allocations, and issue and claim preclusion problems. While these problems may be felt most acutely by plaintiffs, they likewise pose problems for defendants who may wish to press a cross-claim for contribution or would prefer to have a plaintiff take the fight to a co-defendant due to longstanding business relationships. As a practical matter, in order to avoid protracted jurisdictional briefing and to achieve the efficient handling of multi-party litigation, counsel should consider engaging in a frank dialogue with each other and attempt to reach agreement on a forum acceptable to all.

Endnotes

1.  Daimler AG v. Baum, 517 U.S. 117 (2014). The Court reinforced its point regarding general jurisdiction in BNSF Railway Co. v. Tyrell,137 S.Ct. 1549 (2017).

2.  Bristol-Myers Squibb Co. v. Superior Court, 137 S.Ct. 1773 (2017).

3.  See NTSB Investigative Update on Engine Failure (May 3, 2018) at https://goo.gl/bJCGdo.

4.  Daimler AG, 517 U.S. at 138-40.

5.  Id. at 137. See also BNSF Railway,137 S.Ct. at 1558.

6.  Daimler AG, 517 U.S. at 139, n. 19; BNSF Railway,137 S.Ct. at 1558.

7.  BNSF Railway,137 S.Ct. at 1558; Brown v. Lockheed Martin Corp., 814 F.3d 619, 629-30 (2d Cir. 2016).

8.  Bristol-Myers Squibb Co., 137 S.Ct. at 1781.

9.  Hinkle v. Continental Motors, Inc., 2017 U.S. Dist. LEXIS 168591, at *10 (D.S.C. Oct. 12, 2017); Montgomery v. Airbus Helicopters, Inc., 2018 Okla. LEXIS 17 (Okla. Mar. 6, 2018).

10.  Montgomery, 2018 Okla. LEXIS at *24-25.

11.  Compare Montgomery v. Airbus Helicopters, Inc., 2018 Okla. LEXIS 17 (Okla. Mar. 6, 2018) with Russell v. SNFA, 987 N.E.2d 778 (Ill. 2013) and Kowal v. Westchester Wheels, Inc., 89 N.E.3d 807 (Ill. App. Ct. 2017).


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