By Georgia D. Koutouzos, J.D.
A Wisconsin company, the valve maker appears to have insufficient contacts with the forum state.
A California federal court dismissed a lawsuit against the manufacturer of an allegedly defective fuel drain valve whose malfunction caused or contributed to the crash of a small plane in which two people died. The crash occurred in Utah, the decedents’ representatives are residents of Utah, and the valve maker is a Wisconsin resident that has insufficient contacts with California, the court ruled, nevertheless permitting the representatives to conduct limited jurisdictional discovery in order to flesh out the extent of the manufacturer’s sales of its products and services in California (Huffaker v. Eagle Fuel Cells, Inc., January 31, 2020, Curiel, G.).
After two residents of Utah perished as the result of injuries they had sustained in the crash of a small airplane in Utah, their representatives (also residents of Utah) filed suit against Eagle Fuel Cells, Inc., the manufacturer of a replacement fuel drain valve that had been installed in the aircraft, alleging claims for strict products liability, negligence, and breach of warranty. According to the decedents’ representatives, the subject valve allegedly failed to properly drain water from the fuel system, causing the plane to lose power at the time of the crash.
Eagle moved to dismiss the representatives’ claims, asserting that the California federal court lacked personal jurisdiction over the company—a Wisconsin corporation with its principal place of business in Wisconsin that does not transact or solicit business, maintain offices or any other places of business, own real property, or have any clients or employees in California.
Specific jurisdiction. Eagle maintained that specific jurisdiction is lacking in California because: (1) the company does not purposefully direct its activities or otherwise purposefully avail itself of the state; (2) the representatives’ claims did not arise out of any of the company’s forum-related activities; and (3) the exercise of jurisdiction over the company in California would be unreasonable. Eagle contended that the act at issue, i.e., the sale of the allegedly defective fuel valve, was not aimed at California because the company had manufactured the valve in Wisconsin and had sold and sent it to California, where it ultimately had been installed in the ill-fated airplane pursuant to a purchase agreement that had been executed in Wisconsin. The decedents’ representatives countered that Eagle purposefully directed its activities towards and availed itself of the privilege of conducting activities in California through its sale of the at-issue valve.
The representatives did not show that the valve maker directed its activities toward California to justify specific jurisdiction over the company, the court found, noting that California has no apparent interest in providing its residents with a convenient forum for redressing injuries because no California residents are parties to the lawsuit. Further, although the representatives alleged that Eagle had sold the at-issue valve to a California resident, they did not claim that the purchaser had suffered any harm in California, let alone that the purchaser had any connection to the aircraft at the time of the crash.
Nor did the representatives sufficiently allege that Eagle has transacted a substantial amount of business in the state or has created any continuing obligations with any California residents. They only alleged that the company maintains a toll-free telephone number that California residents can call without incurring charges, that it allows customers to request a price quote online, that it performs services across North America, and that it sold a defective drain valve to a California resident who was not a party to the lawsuit.
In addition, the facts showed that Eagle is not registered to do business in California, never had a registered agent in California, owns no real property in California, does not maintain any offices in California, does not keep any officers or directors in California, does not hold any bank accounts or have any telephone listings in California, and does not maintain any corporate books in California. As such, the representatives failed to show that the company has contacts with California that would provide clear notice that it reasonably should anticipate being haled into court in the state.
Jurisdictional discovery. The decedents’ representatives requested jurisdictional discovery, arguing that discovery could show the extent to which Eagle has sent its products to California and has provided fuel system services to California residents. Concluding that it was a close question, the court nevertheless permitted limited jurisdictional discovery to enable the representatives to determine the extent of the valve manufacturer’s sales of its products and services in California. Accordingly, Eagle’s motion to dismiss the representatives’ complaint was granted without prejudice, and the representatives were given 45 days in which to conduct jurisdictional discovery, after which they were afforded leave to amend their complaint within 20 days of the conclusion of that discovery.
The case is No. 19-cv-01996-GPC-AHG.
Attorneys: Daniel M. O’Leary (Law Office of Daniel M. O’Leary) for McKenzie Huffaker. Patrick J. Kearns (Wilson Elser Moskowitz Edelman & Dicker LLP) for Eagle Fuel Cells, Inc. a/k/a Eagle Fuel Cells-ETC., Inc. d/b/a Eagle Technologies Co.
Companies: Eagle Fuel Cells, Inc. a/k/a Eagle Fuel Cells-ETC., Inc. d/b/a Eagle Technologies Co.
MainStory: TopStory JurisdictionNews AircraftWatercraftNews DesignManufacturingNews CaliforniaNews
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