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Olympic Air, Inc. v. Helicopter Technology Co.

United States District Court, W.D. Washington, Seattle

May 29, 2019

OLYMPIC AIR, INC. and CATLIN INSURANCE COMPANY, INC. Plaintiffs,
v.
HELICOPTER TECHNOLOGY COMPANY, et al., Defendants. WILLIAM G. REED and MARY E. REED, Plaintiffs,
v.
HELICOPTER TECHNOLOGY COMPANY, et al. Defendants.

          ORDER GRANTING DEFENDANT MD HELICOPTER, INC.'S MOTION TO DISMISS AMENDED CONSOLIDATED COMPLAINT

          Robert S. Lasnik United States District Judge.

         This matter comes before the Court on defendant MD Helicopter, Inc.'s (“MDHI”) motion to dismiss plaintiffs' First Amended Consolidated Complaint. Dkt. #47.

         BACKGROUND

         On July 22, 2014, plaintiff William G. Reed was piloting an MDHI Model (originally a “Hughes Model”) 369D helicopter (“the Helicopter”), Registration No. N5225C, near Oso, Washington in the scope of his employment with Olympic Air, Inc. Dkt. #47 at ¶¶ 4.1, 5.1. The Helicopter has five rotor blades. Id. at ¶ 4.1. Plaintiffs allege that one of the blades, Part No. 500P2100-105, Serial No. SN091B, failed and caused a crash. Id. at ¶¶ 4.1-4.2. The blade was manufactured by defendant Helicopter Technology Company (“HTC”) and sold by defendant HTC in October 2012 as one of a set of five blades to Olympic Air. Id. at ¶¶ 3.1, 4.1. Post-crash inspection revealed that the blade had disbanded at the root fitting, and that a second blade was in the process of failing at the time that it fractured. Id. at ¶ 4.2; see Ex. B, Dkt. #48 at 10-19. The pilot had carried out inspections prior to the flight but had looked primarily at the root fitting and the metal. The need to inspect the bond line for cracks was not clear to him until after the accident, when new service advisories were issued to that effect. Ex. B, Dkt. #48 at 19.

         Defendant MDHI is a corporation organized and existing under the laws of the State of Arizona, with its principal place of business in Mesa, Arizona. Id. at ¶ 3.2. Plaintiffs brought action against MDHI pursuant to the common law of negligence and the Washington Product Liability Act, see RCW 7.72.010 et seq. Their claims are based on HTC's reliance on the rotor blade designs promulgated by MDHI and MDHI's creation and distribution of service instructions, bulletins and other advisories that failed to provide adequate warning to users of signs of imminent failure of the rotor blades.[1] Dkt. #45 at ¶ 8.4. MDHI filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. Dkt. #47.

         DISCUSSION

         A. Legal Standard

         Plaintiffs must prove that the Court has personal jurisdiction over MDHI. Harris Rutsky & Co. Ins. Servs. v. Bell & Clements Ltd., 328 F.3d 1122, 1128-29 (9th Cir. 2003) (citing Doe, I v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001) (per curiam)). Where there is no applicable federal statute governing personal jurisdiction, the district court applies the law of the state in which the district court sits. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (citing Fed.R.Civ.P. 4(k)(1)(A)). As Washington's long-arm statute is co-extensive with the outer limits of due process, the Court need only ensure that the constitutional requirements for personal jurisdiction are met. Cognigen Networks, Inc. v. Cognigen Corp., 174 F.Supp.2d 1134, 1137 (W.D. Wash. 2001) (citing Chan v. Society Expeditions, Inc., 39 F.3d 1398, 1404-05 (9th Cir. 1994)).

         Due process requires that MDHI have “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.'” Int'l Shoe Co. v. State of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). Plaintiffs contend that MDHI is subject to this Court's specific personal jurisdiction. Dkt. #45 at ¶¶ 6.1-6.3. The Ninth Circuit employs a three-part test to determine whether there is specific personal jurisdiction. First, the non-resident defendant must purposefully direct its activities or consummate some transaction with the forum or a resident of the forum, or perform some act by which it purposefully avails itself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws. Second, the claim must be one that arises out of or relates to the defendant's forum-related activities. Third, the exercise of jurisdiction must comport with fair play and substantial justice; i.e., it must be reasonable. Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015) (citing Schwarzenegger, 374 F.3d at 802). As this is a claim sounding in tort, we apply a “purposeful direction” test and look to evidence that MDHI directed its activities at the State of Washington, even if those actions took place elsewhere. Id. (citing Schwarzenegger, 374 F.3d at 802-03).

         Plaintiffs have the burden of proving the first two prongs. Id. (citing CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1076 (9th Cir. 2011)). If they do so, the burden shifts to MDHI to set forth a compelling case that the exercise of jurisdiction would not be reasonable. Id. at 1212 (citing CollegeSource, 653 F.3d at 1076).

         B. MDHI's Minimum Contacts with the State of Washington

         Plaintiffs argue that MDHI purposefully directed its activities at the State of Washington in several ways, and that their claims arise out of these forum-related activities. The Court considers each rationale in turn.

         1. Legal Manufacturer of the Helicopter

         MDHI's legal predecessor, Hughes Helicopters, manufactured the Helicopter in 1979. Dkt. #45 at ¶ 6.3; Dkt. #12 (Black Decl.) at ¶ 9. Hughes Helicopters was sold to McDonald Douglas in 1984. McDonald Douglas merged with Boeing in 1997. In 1999, the civilian line of Hughes Helicopters was sold to MD Helicopters Holdings, Inc. In 2005, Patriarch Partners, LLC purchased the civilian Hughes product line and recapitalized the company as MDHI. Dkt. #50 at 5-6; Dkt. #32 (Kovarik Decl.) at ¶ 4. Plaintiffs allege that ...


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