Case Information
*1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA BUTTE DIVISION
MARK DUFFY, as Personal Representative
of the Estate of Thomas Duffy, on behalf of CV-21-71-BU-BMM thе Heirs and the Estate of Thomas Duffy and CENTRAL COPTERS, INC., a
Montana corporation, O RDER
Plaintiffs,
vs.
KAMAN AEROSPACE CORPORATION,
a Delaware corporation,
Defendant.
INTRODUCTION
Defendant Kaman Aerospace Corporation (“Kaman”) has filed a Motion to Dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2). (Doc. 7).
Kaman requests, in the alternative, that the Court transfer the case to Connecticut. , ( citing 28 U.S.C. § 1404(a)). Plaintiffs Mark Duffy, as personal representative of the estate of Thomas Duffy, and Central Copters, Inc., (collectively, “Plaintiffs”), oppose the Motion. The Court held a hearing on the matter on December 9, 2021.
BACKGROUND Plaintiffs bring this action against Kaman following the deаth of Thomas Duffy, an employee-pilot for Central Copters, in an accident in Oregon on August 24, 2020, while operating a Kaman-1200 (“K-Max”) helicopter manufactured by Kaman. (Doc. 5 at ¶¶ 2, 5, 7). Plaintiffs allege that a defectively designed and manufactured flap on the blades of the K-Max helicopter caused the accident. at ¶ 3. Plaintiffs also allege that Kaman knew of the defects and failed to inform both Thomas Duffy and Central Copters about a previous crash. at 5. The accident forced Central Copters to ground three оther K-Max helicopters. at ¶ 8. Two of these three helicopters had been sold to Central Copters by an entity other than Kaman. (Doc. 9 at ¶ 9).
LEGAL STANDARD
Personal Jurisdiction
The Court must construe the complaint “in the light most favorable to the
plaintiff” when analyzing a motion to dismiss for lack of personal
jurisdiction.
Milky Whey, Inc. v. Dairy Partners, LLC
,
Plaintiffs carry the “burden of proving that personal jurisdiction exists.”
Cameron v. Thomson Intern’l, Inc.
, CV 21-17-BLG-SPW-TJC,
Transfer
A district court may transfer any civil action “for the convenience of parties
and witnesses, in the interest of justice.” 28 U.S.C. § 1404(a). The Court retains
discretion whether to transfer venue.
Great Plains Crop Mgmt., Inc. v. Tryco Mfg.
Co., Inc.
,
ANALYSIS I. Whether personal jurisdiction exists over Kaman in Montana
Neither party argues that Kaman engages in “systematic аnd continuous”
activities as to subject Kaman to general personal jurisdiction in Montana.
See, International Shoe Co. v. Washington
,
Montana’s Long-Arm Statute
Plaintiffs must first establish that the forum law “allow[s] for personal
jurisdiction.”
Hoseline
,
(A) the transaction of any business in Montana;
(B) the commission of any act resulting in acсrual within Montana of a tort action;
. . . .
(E) entering into a contract for services to be rendered or for materials to be furnished in Montana by such person;
. . . .
Mont. R. Civ. P. 4(b)(1).
The transaction of any business in Montana
Kaman argues first that Plaintiffs’ claims do not arise out of its business in
Montana. (Doc. 8 at 12). The Court must evaluate whether “a relationship exists
‘among [ ] [Kaman], the forum,
and the litigation
,’. . . not just with [Kaman]'s
contacts with Montana in general.”
Buckles v. Cont’l Res., Inc.
,
Nelson, a helicopter owner, transported a helicopter for repairs to Garliсk Helicopters in Hamilton, Montana. Id. at 448. Garlick informed Nelson that they could not perform the repairs and recommended that Nelson take his helicopter to San Joaquin Helicopters in California. Id. Garlick had entered an agreement with San Joaquin two years earlier under which Garlick would transport helicopter parts to San Joaquin. Id. Garlick failed to complete the delivery of the parts. Id. Only in response to San Joaquin’s phone calls to Garlick in Montana did Garlick complete some of the deliveries. Id.
Nelson took his helicopter to San Joaquin for repairs upon the recommendation of Garlick, but soon began over-the-phone negotiations from his home in Bozeman, Montana with San Joaquin for the purchase of the helicopter. Id. San Joaquin agreed to purchase the helicopter. San Joaquin paid for the helicopter with a promissory note signed by Garlick. Nelson collected only a portion owed on the $10,000.00 promissory note before Garlick became insolvent. Nelson brought claims against San Joaquin. Id.
The Montana Supreme Court determinеd that personal jurisdiction properly could be exercised over San Joaquin for the following reasons: 1) San Joaquin spent two years attempting to obtain performance and collect debts from Garlick under their contractual relationship; 2) San Juaquin made phone calls to Garlick to discuss Garlick’s performance of the debt collection; 3) Garlick shipped parts to *6 San Joaquin from Montana; 4) San Joaquin negotiated and agreed to the purchase of Nelson’s helicopter over the рhone with Nelson while Nelson was in Montana; 5) Nelson’s agreement with San Joaquin arose directly from Garlick’s recommendation; and 6) San Joaquin interjected itself into Montana when it created a contractual relationship through the promissory note between Garlick and Nelson for San Joaquin’s purchase of Nelson’s helicopter. Id. at 448-449. These allegations proved “sufficient to establish business transactions ” in Montana. Id. at 449.
TAG, an out-of-state business, sold two vehicles to Grizzly that turned out to have mechanical problems and body damage. Grizzly Sec. Armored Exp., Inc. , 255 P.3d at 145. TAG moved to dismiss the case for lack of personal jurisdiction because it had merely “entered into a contract with Grizzly to sell vehicles” in Montana. at 148. TAG presented further arguments: it had not entered into a contract with any other Montana business; it had not solicited business from Montana; that sales to Grizzly had not made up a significant portion of TAG’s business; and that the critical performance of the contracts had occurred outside Montana. at 148. TAG had “established a business relationship with Grizzly through its past contracts” by selling five other vehicles to Grizzly over a five-year period. TAG knew that Grizzly “intended to use the vehicles in its Montana *7 business, that TAG previously had sold vehicles to Grizzly, and that TAG had serviced Grizzly's vehicles through other Montana businesses.” Id. at 149.
Similarly, in Great Plains Crop Mgmt., Inc. , the District Court exercised personal jurisdiction over a non-resident defendant who had not visited Montana, but had transacted substantial business within the borders of the state. 554 F.Supp. at 1027. The District Court noted that the defendant, Tryco, advertised in a magazine that could reasonably be expected to reach agriculturally-oriented states like Montana. Id. Tryco had mailed its brochure into Montana, “and facilitated a sale to Great Plains by both calling this state and accepting calls from here.” Id. Tryco also had invited the plaintiff to Illinois “in the hope of selling him a piece of equipment for use in this state.” Tryco arranged for shipping several machines into Montana, and sent the plaintiff a letter soliciting another sale, “even including the terms of the sale and indicating the need for prompt action by Great Plains.” Both parties also had considered “the possibility of the plaintiff becoming a Tryco dealership in Montana.”
As illustrated, Montana’s long-arm statute under Mont. R. Civ. P. 4(b)(1)(A) for “the transaction of any business” extends to out-of-state defendants that have even fewer substantial contacts than Kaman. Kaman sent its marketing manager Steve Daniels to Belgrade, Montana in 1997 to meet with Mark Duffy, president of Central Copters. (Doc. 17-4 at ¶ 20). The visit served to market the K-Max *8 helicopters to Central Copters. Id. Daniels attempted to close a sale of a helicopter and represented that the K-Max helicopters sold by Kaman would “perform well for the type of work Central Copters performs.” Id.
A Kaman pilot delivered the K-Max helicopter to Central Copters in Montana in 1997. Id. at ¶ 21. Kaman later sent service technicians to Montana to “assist Central Copters’ maintenance crew and pilots with technical and operational issues and the performance of inspections.” Id. at ¶ 22. The service technicians also trained Central Copters’ maintenance crew and pilots in Montana during their stay. Id. Kaman prоvided service technicians and parts to Central Copters even after the sale of the first K-Max helicopter. Id. at ¶¶ 22-25.
Similar to Nelson , Kaman made phone calls to Central Copters in Montana and interjected themselves into negotiations in which Central Copters had engaged with other entities for the potential purchase of more K-Max helicopters. Id. at ¶¶ 32-35. For example, Central Copters purchased a K-Max helicopter manufactured by Kaman from the U.S. State Department in an auction in 2007. Id. at ¶ 32.
Kaman agreed to transport the helicopter for Central Copters from Columbia to the United States for $50,000. Id. at 32-33. This helicopter was involved in the fatal crash with Duffy. at ¶ 33. Kaman later interjected itself into Central Copters’ negotiations to purchase a K-Max from South Korea in 2021. at ¶ 34. The South Korean operator owed money for parts to Kaman. Kaman agreed to the *9 sale of the helicopter to Central Copters upon Central Copters’ payment of the South Korean operator’s outstanding debt. Id.
Kaman made no fewer than ten trips to Montana to assist Central Copters.
at ¶ 34. Kaman has delivered numerous parts to Central Copters in Montana as
part of an exchange program. at 36. Central Copters also has ordered and been
supplied spare blades that Kaman has delivered to Montana. at 38. Kaman
willingly has marketed its services and products to Plaintiffs. Plaintiffs’ allegations
are “sufficient to establish business transactions” in Montana to support specific
jurisdiction under the Montana long-arm statute.
Nelson
,
Whether Kaman purposefully directed its activities towards
Montana or purрosefully availed itself of Montana
“Where a forum seeks to assert specific jurisdiction over an out-of-state
defendant who has no consented to suit there, this ‘fair warning’ requirement is
satisfied if the defendant has ‘purposefully directed’ [its] activities at residents of
the forum.”
Burger King Corp. v. Rudzewicz
,
“The contacts must be the defendant's own choice and not ‘random, isolated,
or fortuitous.’” (
quoting Keeton v. Hustler Magazine, Inc.,
Kaman ignores the fact that it sent marketing professionals, sales technicians, and pilots to Montana to assist Central Copters. Kaman procured the sale of the first K-Max by sending a marketing manager to Central Copters. (Doc 17-4 at ¶ 20). Kaman assisted in projects and maintenance for Central Copters. Id. at ¶¶ 22-25. Kaman delivered a heliсopter and parts to Central Copters. at ¶¶ 21, 36, 38. Kaman interjected itself into Central Copters’ negotiations and contractual agreements with third parties that Central Copters performed from Montana. at ¶¶ 32-35. Kaman engaged in a contractual exchange program with Central Copters in which they send parts to Central Copters. at ¶ 36.
Kaman argues that Central Copters is Kaman’s only Montana customer and
that Central Copters comprised less than 1% Kaman’s total net sales from 2017 to
2020. (Doc. 8 at 17). Kaman’s own declaration reveals that only sixteen K-Max
operators exist in the world. (Doc. 30 at ¶ 12). Central Copters constitutes one of
these sixteen operators. Kaman’s contacts with Montana are not “random.”
See
Keeton
,
Whether Plaintiffs’ claims arise out of or relate to Kaman’s Montana contacts
General contacts with the forum alone prove insufficient to satisfy due
process.
Buckles
,
Supreme Court analyzed this prong in
Ford
. Plaintiffs brought products liability
claims against Ford after a pair of car accidents.
Ford insisted on the need for causal link, where jurisdiction attaches “only if the defendant’s forum conduct gave rise to the plaintiff’s claims.” (italics in original). The U.S. Supreme Court noted that the “causation-only” approach had no support from case precedent: “None of our precedents has suggested that only a strict causal relationship between the defendant's in-state activity and the litigation will do.” The most common formulation of the rule “demands that the suit *13 ‘arise out of or relate to the defendant's contacts with the forum.’” Id. (italics in original).
Similarly, Ford rеasoned that an exclusive causal connection test would conflict with precedent for cars bought outside of a forum state and then sold to consumers within the forum state. Id. at 1029. “[S]ome relationships will support jurisdiction without a causal showing.” Id. at 1026. Ford had served a market in the forum states for many years for the “very vehicles that the plaintiffs allege malfunctioned and injured them in those states.” at 1028. These factors established a strong “relationship among the defendant, the forum, and the litigation”—the “essential foundation” of speсific jurisdiction.
A strong relationship exists among Kaman, Montana, and the Plaintiffs’ claims. Kaman has marketed itself to Central Copters in Montana. Kaman also has shipped blades to Central Copters in Montana. In fact, the blades that allegedly caused the helicopter crash at issue were purchased by Central Copters from Kaman and shipped by Kaman to Montana. (Doc. 17-4 at ¶¶ 38-39). These transactions establish that the claim arises out of or relates to Kaman’s contacts in Montana.
Kaman further argues that it lacked an extensive market presence in
Montana like the defendant in
Ford
. (Doc. 8 at 22-23). Context matters. Central
Copters is one of sixteen K-Max operators worldwide. (Doc. 30 at ¶ 12). Kaman
*14
may not have thirty-six dealerships in Montana. Kaman maintained a close
business relationship with Central Copters, however, and sold the blades that
allegedly caused the accident to Central Copters.
Ford
,
Kaman also argues that Montana lacks specific jurisdiction because the crash occurred in Oregon. (Doc. 8 at 23-24). The crash itself рresents Oregon’s only connection with Plaintiffs’ claims. To interpret Ford to mean that Tom Duffy’s accident needed to be in Montana for personal jurisdiction to be proper in Montana frustrates the purpose of the language “or relate to.” Buckles , 462 P.3d at 228. Whether Montana’s exercise of personal jurisdiction over Kaman would be reasonable
The Ninth Circuit lays out seven factors to determine whether the exercise of
personal jurisdiction over out-of-state defendants proves reasonable: “(1) the extent
of the defendant's purposeful interjection into Montana; (2) the burden on
defendant of defending in Montana; (3) the extent of the conflict with the
sovereignty of another possible forum state; (4) Montana's interest in adjudicating
the dispute; (5) the most efficient judicial resolution of the controversy; (6) the
importance of Montana to plaintiff's interest in convenient and effective relief; and
(7) the existence of an alternative forum.”
Abbey v. Chubb Corp.
, CV 05-23-H-
DWM,
Kaman has interjected itself into Montana by selling a helicopter to Kaman,
sending service technicians, marketing professionals, pilots, training, and parts to
Central Copters, and doing business with Central Copters in Montana for several
years. (Doc. 17-4 at ¶¶ 19-34, 36-39). Kaman’s burden in having to litigate in
Montana proves no greater than the burden Plaintiffs would face in having to
litigate elsewhere. Montana possesses an interest in the litigation of its own
businesses and residents. Montana represents the most efficient forum as the case
already has been filed here and the early stages of litigation have begun. All
Plaintiffs and Tom Duffy’s family are located in Montana. (Doc. 17-4 at ¶ 46). The
sliding scale approach favors Plaintiffs.
Abbey
,
II. Whether the claims should be transferred to Connecticut
Kaman seeks to transfer this case to the District of Connecticut pursuant to 28 U.S.C. § 1404(a). (Doc. 7). Kaman argues that Connecticut represents the proper forum as the parties’ relationship is centered there and Plaintiffs agreed to a Connecticut forum selection clause. (Doc. 8 at 7, 26-28). The question of a transfer under § 1404(a) falls to the discretion of this Court. Great Plains Crop Mgmt., Inc , 554 F.Supp at 1028. Kaman bears the burden of showing that a change of venue *16 “would enhance witness convenience and the interests of justice rests on the moving party.” Id.
Forum selection clause
Kaman argues that forum selection clauses in Exhibits A and B bound
Central Copters to the Connecticut forum. (Doc. 8 at 26-28). Kaman argues that
“[w]hen parties have contracted in advance to litigate disputes in a particular
forum, courts shоuld not unnecessarily disrupt the parties’ settled expectations.”
Bjorgen v. Marco Tech. LLC
, CV 17-134-M-DLC,
The forum selection clause between Kaman and Central Copters fails to bind Tom Duffy. In both Home Sav. and Manetti , the conduct of the third party that was deemed “closely related to the contractual relationship” consisted of actions by
corporate subsidiaries, officers, and directors. Tom Duffy served as an employee of Central Copters. The language in the forum selection clauses in those cases did not contain specific language that limited the forum selection clause to a specific party. *17 This case differs. The forum selection clause specifies that it was limited to “this Agreement” between “the partiеs.” (Doc. 9-1 at 6-7, Exhibit A). The parties to “this Agreement” were only Kaman and Central Copters. at 1. Tom Duffy was not a party to the agreement and Tom Duffy did not sign the agreement. The forum selection clause from the Commercial Price Catalog similarly lacks any relationship with the Estate of Tom Duffy’s wrongful death action.
The forum selection clauses also do not govern Central Copters’ claims. Exhibit A relates to a prior aircraft sale in 2006. It does not relate to the sale of the accident helicopter K-Max N314 or the blades that аllegedly caused the accident. (Doc. 17-4 at ¶¶ 32, 33). Similarly, the forum selection clause in the 2021 Commercial Price Catalog in Exhibit B was produced after the sale of the accident helicopter and the sale of the blades at issue. at ¶ 39.
The forum selection clauses must be honored “unless the party challenging
enforcement of such a provision can show it is ‘unreasonable’ under the
circumstances.”
Home Sav
.,
A court may render forum selection clauses unenforceable if the contract
between the parties involves a contract of adhesion.
Fayle
, at 1186. “A contract of
adhesion is a contract whose terms are dictated by one contracting party to another
who has no voice in its formulation.”
Kloss v. Edward D. Jones & Co.
,
Polzien
specified that a contract clause is unenforсeable against a weaker
party if the clause is: “(1) not within the reasonable expectations of said party, or
(2) within the reasonable expectations of the party, but, when considered in its
context, is unduly oppressive, unconscionable or against public policy.”
Id.
“Unconscionability requires a two-fold determination: that the contractual terms
are unreasonably favorable to the drafter and that there is no meaningful choice on
*19
the part of the other party regarding acceptance оf the provisions.”
Iwen v. U.S. W.
Direct, a Div. of U.S. W. Mktg. Res. Grp., Inc.
,
Little question exists that the contract between Kaman and Central Copters
for the sale of the blades in question constitutes a contract of adhesion. Central
Copters’ K-Max N314 needed new blades. (Doc. 17-4 at ¶ 38). Kaman was the
sole manufacturer of the blades. at ¶ 39. Central Copters’ helicopter would have
been inoperable without the new blades. ; (Doc. 17 at 31). Central Copters
agreed to purchase the new blades after Kaman sent a letter to Central Copters
about the blades. (Doc. 17-5). Central Copters believed, and Kaman agreed, that
the blades would not be subject to the exchange program. Central Copters had
no knowledge of any forum selection clause until six years after the purchase and
thus did not expressly consent to any waiver of personal jurisdiction in Montana.
(Doc. 17-4 at ¶ 40);
see Polzin,
Fourth, the forum selection clause does not apply to Central Copters’ tort
claims. The forum selection clause relates to the “Agreement” for the purchase of
goods. (Doc. 8-1). “Whether a forum selection clause applies to tort claims
depends on whether resolution of the claims relates to interpretation of the
contract.”
Manetti-Farrow, Inc. v. Gucci Am., Inc., et al.
,
Factors to determine whether transfer would be proper
RD Rod, LLC v. Montana Classic Cars, LLC
, No. CV12-136-M-DLC-JCL,
1. The plaintiff’s choice of forum.
Plaintiffs have chosen Montana as the forum in which to file.
2. The location where the relevant agreements were negotiated and executed. Central Copters negotiated and executed the relevant contracts with Kaman while located in Montana.
3. The convenience of witnesses.
Tom Duffy’s entire family resides in Montana. (Doc. 17-4 at ¶ 46). The employees of Central Copters with relevant testimony also reside in Montana. These facts outweigh any inconvenience to Kaman’s witnesses.
4. The ability of the two forums to compel non-party witnesses to testify. Plaintiffs contend that Tom Duffy’s family and any other witnesses whom thеy anticipate calling all reside in Montana. Kaman insists that more non-party witnesses will reside in Connecticut. This factor favors neither party given that an
exhaustive list of witnesses remains unknown.
5. The respective parties’ relative contacts with the forums.
Kaman interjected itself into Montana through its contacts with Central Copters. Central Copters did indeed visit Connecticut on several occasions.
Kaman’s contacts with Montana are much greater than that of Central Copters with Connecticut.
6. The state that is most familiar with the governing law.
Montana’s choice of law provision for tort claims аpplies the “most significant relationships” test. RD Rod , at *4–5. Applying the test to the case at hand, the most significant relationships exist in Montana. See id. Central Copters relied on safety warnings from Kaman in Montana, Central Copters allegedly failed to receive warning in Montana, and the business relationship seems to center in Montana.
7. The relative congestion in the two forums:
Kaman cites to statistics that demonstrate Connecticut’s disposition time of civil suits is, on average, 0.6 months faster than Montana. Accordingly, this factors tips slightly in favor of Kaman.
8. The length of time [the] action has already been pending in the transferor forum.
This factor fails to favor either party.
9. Ease of access to sources of proof.
*22 The alleged defects in manufacture and design occurred in Connecticut. 10. Whether there is a ‘local interest’ in either of the forums.
Montana retains a strong interest in the litigation of its own residents who have been harmed by out-of-state companies.
The application of the factors weighs in favor of Plaintiffs. The Court exercises its discretion to deny Kaman’s request to transfer to the United States Court for the District of Connecticut.
ORDER Accordingly, IT IS ORDERED that the Kaman’s Motion to Dismiss, or in the Alternative, Transfer (Doc. 7) is DENIED .
Dated this 10th day of March, 2022.