Honda Jet Limited, L.L.C. v. Honda Aircraft Company, LLC

IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF ARKANSAS

HARRISON DIVISION

HONDA JET LIMITED, L.L.C. PLAINTIFF

V. CASE NO. 3:19-CV-3030

HONDA AIRCRAFT COMPANY, LLC DEFENDANT

MEMORANDUM OPINION AND ORDER

Currently before the Court are Defendant Honda Aircraft Company, LLC’s Motion

to Dismiss for Lack of Personal Jurisdiction (Doc. 25); Plaintiff Honda Jet Limited, L.L.C.’s

Response (Doc. 26) and Memorandum Brief in Support (Doc. 27); Defendant's

Supplement (Doc. 30) and Reply (Doc. 31); and Plaintiff's Supplements (Docs. 32, 34).

For the reasons given below, the Court will GRANT Defendant’s Motion.

|. BACKGROUND

Defendant is an aircraft manufacturer. Back in 2006, Plaintiff signed a purchase

agreement (“the Purchase Agreement’) with Defendant, for the purchase of a small twin-

engine private aircraft (“the Jet”). The model that Plaintiff agreed to purchase from

Defendant (Model HA-420) was still in development at that ttme—which is to say, Plaintiff

agreed to purchase the Jet before it came to market. Over the next eleven years,

Defendant continued to develop and manufacture the aircraft, and in 2017 the Jet was

finally delivered to Plaintiff.

Plaintiff alleges that the Jet was delivered with various defects that have required

extensive and expensive diagnostics and repairs. Those alleged defects are the subject

of this lawsuit, which Plaintiff filed on March 7, 2019, in the Circuit Court of Baxter County,

Arkansas. A month and a half later, Defendant removed the lawsuit to this Court.

Plaintiffs operative complaint asserts one count against Defendant for breach of the

Purchase Agreement’s warranty. Plaintiff seeks a judgment for the damages allegedly

caused by Defendant's breach, along with either a replacement jet that is free of defects

or an award in the amount of the Jet’s purchase price.

Defendant has filed a Motion to Dismiss for Lack of Personal Jurisdiction.

Essentially, Defendant argues that this lawsuit cannot be brought against it in the state of

Arkansas because this state is not Defendant's principal place of business, Defendant is

not organized under the laws of this state, and none of the events giving rise to this lawsuit

occurred in Arkansas. Plaintiff, of course, disagrees, having filed the lawsuit in this state.

Defendant’s Motion has been fully briefed, and is ripe for decision.

ll. LEGAL STANDARD

Plaintiff bears the burden of proving sufficient facts to “make a prima facie showing

of personal jurisdiction over the defendant.” See Digi-Tel Holdings, Inc. v. Proteq

Telecomm. (PTE), Ltd., 89 F.3d 519, 522 (8th Cir. 1996). But the Court “must view the

evidence in the light most favorable to the plaintiff and resolve all conflicts in the plaintiff's

favor.” Id.

For a court to have personal jurisdiction over a defendant, two requirements must

be satisfied. One requirement is that the forum state’s long-arm statute must permit

service of process. The other requirement is that the defendant must have sufficient

minimum contacts with the forum state such that it would not violate federal constitutional

requirements of due process for the defendant to be sued in that state. But in Arkansas,

these two requirements collapse into one, because Arkansas’s long-arm statute

authorizes the exercise of personal jurisdiction to the maximum extent permitted by the

Due Process Clause of the Fourteenth Amendment to the United States Constitution.

See Ark. Code Ann. § 16-4-101(B); see also Epps v. Stewart Info. Servs. Corp., 327 F.3d

642, 647 (8th Cir. 2003).

The Due Process Clause allows courts to exercise personal jurisdiction only when

a defendant has “certain minimum contacts with” the forum state “such that the

maintenance of the suit does not offend traditional notions of fair play and substantial

justice.” See Intl Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation

marks omitted). This standard “presaged the development of two categories of personal

jurisdiction”: general jurisdiction and specific jurisdiction. Daimler AG v. Bauman, 571

U.S. 117, 126-27 (2014).

General jurisdiction allows a court to hear “any and all claims” against a defendant.

See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). When

the defendant is a corporation, the Due Process Clause permits general jurisdiction over

it only when its “affiliations with the State are so continuous and systematic as to render

them essentially at home in the forum State.” See id. (internal quotation marks omitted).

“The place of incorporation and principal place of business” are the “paradigm bases for

general jurisdiction” over a corporation. Daimler, 571 U.S. at 137 (internal alterations and

quotation marks omitted).

“Specific jurisdiction, on the other hand, depends on an affiliation between the

forum and the underlying controversy, principally, activity or an occurrence that takes

place in the forum State and is therefore subject to the State’s regulation.” Goodyear,

564 U.S. at 919 (internal alteration and quotation marks omitted). Its exercise is “confined

to adjudication of issues deriving from, or connected with, the very controversy that

establishes jurisdiction.” /d. (internal quotation marks omitted). “The inquiry whether a

forum State may assert specific jurisdiction over a nonresident defendant focuses on the

relationship among the defendant, the forum, and the litigation.” Walden v. Fiore, 571

U.S. 277, 283-84 (2014) (internal quotation marks omitted).

To aid district courts in determining whether a defendant has sufficient minimum

contacts with a forum, the Eighth Circuit has crafted a five-factor test:

(1) the nature and quality of the contacts with the forum state; (2) the

quantity of the contacts with the forum state; (3) the relation of the cause of

action to the contacts; (4) the interest of the forum state in providing a forum

for its residents; and (5) the convenience of the parties.

Land-O-Nod Co. v. Bassett Furniture Indus. Inc., 708 F.2d 1338, 1340 (8th Cir. 1983).

The last two factors are of secondary importance, id., and the third factor applies only in

the specific-jurisdiction context, see Wilcosky v. Swift Trans. Corp., 2008 WL 2562959,

at *2 (W.D. Ark. June 24, 2008); see also Digi-Tel Holdings, 89 F.3d at 522 n.4 (“This

third factor distinguishes whether the jurisdiction is specific or general.”).

lll. DISCUSSION

Defendant is a limited liability company organized under the laws of Delaware,

whose principal place of business is North Carolina. See Doc. 18, 76. It has no offices,

employees, or real estate in Arkansas. See Doc. 25-1, JJ 19-20. It has no facilities in

Arkansas for manufacturing, repair, sales, or maintenance. See id. at J 16. Itis not even

registered to do business in Arkansas, see id. at J 17, and it has no registered agent for

service of process in this state, see id. at 118. Plainly, then, there is no general personal

jurisdiction over Defendant here. Plaintiff does not appear to contend otherwise.

Instead, Plaintiff focuses its argument on the matter of specific jurisdiction. The

Court’s analysis here is greatly streamlined by the fact that almost none of the relevant

facts are in dispute. Rather, the parties simply disagree on whether these facts

demonstrate the requisite “minimum contacts” with the state of Arkansas.

Plaintiff, like Defendant, is a limited liability company organized under the laws of

Delaware. See Doc. 18, f[ 5. The original sale of the Jet was apparently conducted in

Kansas and North Carolina. See Doc. 25-1, J 14 & pp. 67-72. Various amendments to

the Purchase Agreement invoke the laws of North Carolina. See id. at pp. 61, 63. The

Jet was manufactured in North Carolina. See id. at} 12. The Jet was delivered to Plaintiff

in North Carolina. See id. at 13 & pp. 65-66. All communications from Defendant to

Plaintiff during the eleven intervening years between the purchase and the delivery were

mailed to Kansas addresses. See id. at J 15.

At this point, the reader is likely wondering why this lawsuit was filed in Arkansas.

The answer is simple: Plaintiffs current owners live here.’ On its own, that is insufficient

to establish personal jurisdiction over Defendant. “[T]he plaintiff cannot be the only link

between the defendant and the forum. Rather, it is the defendant's conduct that must

form the necessary connection with the forum State that is the basis for its jurisdiction

over him.” Walden, 571 U.S. at 285.

So Plaintiff points to three contacts between Defendant and the state of Arkansas,

and argues that they are sufficient to make its prima facie showing of personal jurisdiction.

' To be more precise, Plaintiffs sole member is a limited liability company called Brooke

Development Company, which is organized under the laws of Arkansas. See Doc. 18,

975. And Brooke Development Company’s sole members are Brad and Lani

Hasselwander, who are both individuals and citizens of Arkansas. See id.

With respect to one such set of contacts, Plaintiff observes that another Arkansas resident

owns the same model as the Jet, see Doc. 26-2, and that Defendant's personnel have

traveled to Arkansas to make repairs to another owner's aircraft, see Doc. 26-3. This

Court does not believe these particular facts have any relevance at all to the issue of

specific jurisdiction in this case. In a similar situation, the United States Supreme Court

observed that “[t]he mere fact that other plaintiffs” had contacts with nonresident

defendants in the forum state “does not allow the State to assert specific jurisdiction over

the nonresidents’ claims. ... [A] defendant's relationship with a third party, standing

alone, is an insufficient basis for jurisdiction.” Bristol-Meyers Squibb Co. v. Superior Ct.

of Cal., 137 S. Ct. 1773, 1781 (2017) (emphasis in original).?

The other two sets of contacts between Defendant and Arkansas that Plaintiff

points to are that: (1) Defendant once contracted with an lowa-based third party called

Des Moines Flying Service (“DMFS’)? to travel to Arkansas to make repairs to the Jet;

and (2) Defendant once provided a pilot to fly the Jet from North Carolina to Arkansas

after repairs were made to the Jet in North Carolina. See Doc. 18, | 8. These contacts

are also insufficient to make a showing of specific jurisdiction here, because neither of

them caused the harm of which Plaintiff complains—which is that Defendant allegedly

breached the Purchase Agreements warranty by delivering to Plaintiff a defective Jet. It

2 These sparse contacts certainly do not suffice to make a showing of general jurisdiction

either. As has already been discussed above, Arkansas is neither Defendant's primary

place of business nor the state under whose laws Defendant is organized.

3 Plaintiff characterizes DMFS as Defendant's “agent,” rather than as an independent

contractor. See Doc. 18, J 8. But the contract between Defendant and DMFS explicitly

states that their relationship is one of independent contractors and not one of agency.

See Doc. 25-1, p. 110, J 10.2. Ultimately, though, this distinction makes no difference to

this Court's analysis.

is not enough that Plaintiff happened to be located in Arkansas when it experienced harm

from Defendant's extraterritorial actions, unless “those acts (1) were intentional, (2) were

uniquely or expressly aimed at the forum state, and (3) caused harm, the brunt of which

was suffered—and which the defendant knew was likely to be suffered—in the forum

state.” See Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., KG, 646 F.3d 589,

594 (8th Cir. 2011) (emphasis added). Plaintiff is not suing Defendant for making repairs

to the Jet; Plaintiff is suing Defendant for manufacturing and delivering a Jet (both in North

Carolina) that needed extensive repairs in the first place.

Considering all these facts together in light of the Eighth Circuit's five-factor test, it

is clear to this Court that it cannot exercise personal jurisdiction over Defendant in this

case. The nature, quality, and quantity of Defendant’s contacts with Arkansas have no

relation to the cause of this action. In other words, the first three (and most important)

factors all weigh very heavily against personal jurisdiction here. The other two (and less

important) factors—Arkansas’s interest in providing a forum for its residents, as well as

the convenience of the parties—do not weigh in Plaintiff's favor either. Though Plaintiff's

owners are Arkansas residents, Plaintiff itself is a Delaware entity. Arkansas has no

interest in interpreting and developing North Carolina law. And North Carolina would

surely be as convenient a forum for Defendant as Arkansas would be for Plaintifi—to say

nothing of the fact that North Carolina is where the vehicle was manufactured and thus

presumably where much of the relevant evidence about Plaintiffs claim can be found.

Plaintiff asks that if this Court is inclined to grant Defendant’s Motion, it first give

Plaintiff the opportunity to conduct limited jurisdictional discovery so that it may uncover

evidence to support a prima facie showing of personal jurisdiction. But Plaintiff does not

explain what such evidence might be, and in light of all the aforementioned facts, this

Court cannot imagine what it would be either. So the Court will deny Plaintiff's request

for jurisdictional discovery, and it will grant Defendant's Motion.

In general, when a district court lacks personal jurisdiction over a defendant, itmay

transfer the case “to any district or division in which it could have been brought” if doing

so would “be in the interest of justice.” See 28 U.S.C. § 1406(a); Goldlawr, Inc. v. Helman,

369 U.S. 463, 466 (1962) (“The language of § 1406(a) is amply broad enough to authorize

the transfer of cases, however wrong the plaintiff may have been in filing his case as to

venue, whether the court in which it was filed had personal jurisdiction over the

defendants or not.”). Here the Middle District of North Carolina (which contains

Greensboro, where the Jet was manufactured), strikes this Court as a likely appropriate

venue if such a transfer were to be made. But neither party in this case has requested a

transfer. In the absence of any such request or briefing on the propriety of any particular

transferee venue, this Court finds the appropriate action here is to dismiss this case

without prejudice, so that Plaintiff may refile it in a proper venue of its own choosing.

IV. CONCLUSION

IT IS THEREFORE ORDERED that Defendant Honda Aircraft Company, LLC’s

Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 25) is GRANTED, and this case

is DISMISSED WITHOUT PREJUDICE fon lack of personal jurisdiction.

IT IS SO ORDERED on this del” aes of tT 019.

OTHY LABROOKS

UNITED ages o1sTRI JUDGE