Old Republic Insurance Co. v. Continental Motors, Inc.
877 F.3d 895
| 10th Cir. | 2017Background
- Old Republic (insurer) paid $329,500 to its insured (a Colorado corporation) after an airplane crashed on a flight from Colorado to Idaho; the crash was allegedly caused by failed magneto components manufactured by Continental Motors and serviced by Arapahoe Aero (a Colorado FBO).
- Arapahoe Aero accessed Continental Motors’ online service manuals and bulletins while servicing the aircraft; some manuals were available only to members of Continental’s FBO Program (an online subscription) and bulletins were publicly accessible.
- Continental’s FBO Program listed participating FBOs on a locator webpage, offered online manual access, training, rewards, and customer support; Arapahoe Aero had been a member since 1996 and one of ~20 Colorado FBOs enrolled in the five years preceding the crash.
- Old Republic sued Continental in Colorado federal court in subrogation, alleging strict products-liability/defective-instructions claims based on the online manuals/bulletins; Continental moved to dismiss for lack of personal jurisdiction.
- The district court granted dismissal for lack of specific personal jurisdiction; on appeal the Tenth Circuit affirmed, holding Old Republic failed to make a prima facie showing that Continental purposefully directed activities at Colorado based on the website/FBO contacts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Colorado court has specific personal jurisdiction over Continental based on its website/FBO Program contacts | Continental targeted Colorado by offering paid online manuals, listing Colorado FBOs, and providing ongoing services to Colorado FBOs, so jurisdiction is proper | Continental’s website and FBO Program are geographically neutral; contacts (annual, short-term subscriptions, limited communications, and public FAA-driven distribution) do not show purposeful direction at Colorado | No — plaintiff failed to show purposeful direction; specific jurisdiction denied |
| Whether continuing contractual relationship with a Colorado FBO (Arapahoe Aero) supports jurisdiction | Arapahoe’s long membership and the FBO T&C created ongoing obligations linking Continental to Colorado | The relationship was short-term (annual renewals), non-negotiated, minimal, and lacked prior negotiations or substantial course of dealing | No — continuing-relationship contacts insufficient for purposeful direction |
| Whether Continental deliberately exploited Colorado market (market-exploitation/Keeton theory) | Sales to ~20 Colorado FBOs and national advertisement via website amounted to targeted exploitation | Sales volume, revenues, and advertising were minimal compared to precedent; no Colorado-targeted marketing shown | No — sales/marketing insufficient to establish purposeful exploitation |
| Whether publication of online manuals causing harm in Colorado satisfies Calder/harmful-effects test | Manuals were provided to Arapahoe in Colorado and harm was felt there, so effects test applies | Mere foreseeability or accessibility of online materials is insufficient; no evidence manuals were expressly aimed at Colorado | No — plaintiff failed to show the manuals were expressly aimed at Colorado; Calder-based effects test not met |
Key Cases Cited
- Walden v. Fiore, 571 U.S. 277 (2014) (plaintiff’s location alone insufficient; defendant’s own contacts with forum must create meaningful link)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful availment requires prior negotiations, contemplated future consequences, terms, and course of dealing)
- Daimler AG v. Bauman, 571 U.S. 117 (2014) (general jurisdiction requires affiliations so continuous and systematic as to be essentially at home)
- Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984) (continuous and deliberate exploitation of forum market can support specific jurisdiction)
- Calder v. Jones, 465 U.S. 783 (1984) (intentional actions expressly aimed at the forum producing harmful effects can support jurisdiction)
- Shrader v. Biddinger, 633 F.3d 1235 (10th Cir. 2011) (internet-posting cases require showing defendant intentionally directed activity at forum, not mere accessibility)
- Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063 (10th Cir. 2008) (Calder-derived three-part effects test: intentional action, expressly aimed at forum, knowledge that brunt of harm would be felt there)
- uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d 421 (7th Cir. 2010) (extensive national advertising and large in-forum customer base weigh toward purposeful market exploitation)