864 S.E.2d 816
N.C. Ct. App.2021Background
- Fatal 2013 NC crash of a Lancair aircraft killed the owners; engine lost power after losing oil pressure and a CMI-made starter adapter (overhauled by a third party) was implicated.
- Continental Motors, Inc. (CMI), an Alabama-based engine/component manufacturer, sold parts nationwide through independent distributors (including Triad in NC) and maintained a paid online technical library/subscription service accessed by NC service centers (including Air Care).
- Air Care (NC) purchased an overhauled starter adapter from Aircraft Accessories of Oklahoma, installed it using CMI maintenance manuals (Air Care had a CMI subscription), and the adapter later allegedly contributed to the crash.
- Plaintiff (executor) sued CMI alleging design defect in the starter adapter and defective service manual, among other claims; CMI pleaded lack of personal jurisdiction and later moved to dismiss under Rule 12(b)(2).
- Trial court granted CMI’s motion for lack of personal jurisdiction; on interlocutory appeal the NC Court of Appeals (post-Ford) held that specific jurisdiction over CMI in NC is permissible and reversed in part, remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of personal-jurisdiction defense | CMI’s prolonged litigation conduct and discovery waived jurisdictional objection | CMI raised lack of personal jurisdiction in its Answer and did not waive the defense | CMI did not waive the defense; raising it in its first responsive pleading preserved it |
| Specific personal jurisdiction (general standard) | NC can exercise jurisdiction because CMI served the NC market and its products (and manuals) were used here, connecting CMI’s contacts to the claim | CMI argued engine and adapter were designed/manufactured in AL and arrived in NC via third parties; broader nationwide contacts unrelated to the crash do not support jurisdiction | Applying Ford, the court held CMI’s systematic servicing of the NC market (via distributors and subscriptions) created an affiliation between forum and controversy; specific jurisdiction is appropriate |
| Internet-based service manual / online library | CMI’s paid online technical library and subscriber notifications were commercial, relied on by NC service centers, and support purposeful availment | CMI characterized the website as passive information posting that alone cannot create jurisdiction | The court treated the site as interactive/commercial (paid subscriptions, updates, and use by NC service centers) and found these contacts factored into the specific-jurisdiction analysis |
Key Cases Cited
- Ford Motor Co. v. Montana Eighth Judicial Dist. Ct., 141 S. Ct. 1017 (2021) (clarifies specific-jurisdiction test: claim must “arise out of or relate to” defendant’s forum contacts; market-serving contacts can support jurisdiction)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (limits jurisdiction where defendant’s contacts with forum are not purposeful)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) (distinguishes general and specific jurisdiction limits)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful availment and fairness factors for specific jurisdiction)
- Walden v. Fiore, 571 U.S. 277 (2014) (forum contacts must be defendant’s own and show purposeful availment)
- Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (requires connection between forum contacts and plaintiff’s claims for specific jurisdiction)
- ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707 (4th Cir. 2002) (Zippo framework adopted for Internet-based jurisdictional analysis)
- Havey v. Valentine, 172 N.C. App. 812 (2005) (NC adoption of ALS/Zippo principles for web-based contacts)
- Banc of Am. Secs. LLC v. Evergreen Int’l Aviation, Inc., 169 N.C. App. 690 (2005) (procedural standards for adjudicating Rule 12(b)(2) with competing affidavits)