Petition — Dornier v. Elliott

81-34 —

er Office-Supreme Court, U.S

Le ri LED

JUN 2 2 1981

IN THE

Supreme Court of the United Harwyn”

oe

‘

OcTOBER TERM, 1981 ~

Dornier GMBH, a German Corporation, Petitioner,

v.

DonaLp E. Exuiott and Evetyn L. Exuiott, individually and as Personal

Representatives of the Estate or Scott v. ELtiott, DECEASED, BusH AiR, INC., an

Alaska corporation, and Wien Air ALASKA, INC., an Alaska corporation, Respondents.

Dornier, A. G., and Dornier, GMBH, Petitioners,

v.

AVONNA L. SWEANEY, Personal Representative of the Estate oF Gary B. ROBERTS,

BUTLER AVIATION ComPpANy, Home O1 Company, LIMITED, FIELD AVIATION COMPANY,

LimITeD, CLIFFORD L. SHORT, Ray E. FERGUSON, FRANK P. FERGUSON, DON FERGUSON,

Joe FerGuson, Don’s SAFARI FLYING SERVICE, KOTZEBUE FLYING SERVICE, INC., ALASKA

CENTRAL AIRWAYS, INC., GEORGE GRANT, and AIRPARTS, INC., Respondents.

Dornier, A. G., and Dornier, GMBH, Petitioners,

Vv.

BusH Air, INc., an Alaska corporation, BUTLER AVIATION COMPANY, HAMILTON

AvIATION CoMPANY, HoME O1 ComMPANy, FIELD AVIATION COMPANY, LIMITED,

Currorp L. SHorT, Ray E. FerGuson, FRANK P. FERGUSON, Don FERGUSON, JOE

FERGUSON, Don’s SAFARI FLYING SERVICE, FERGUSON’S FLYING SERVICE, KOTZEBUE

FLYING SERVICE, INC., ALASKA CENTRAL AIRWAYS, INC., GEORGE GRANT,

and AiRPARTS, INC., Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE STATE OF ALASKA

Davip H. THORSNESS

(Counsel of Record)

HUGHES, THORSNESS, GANTZ,

PoweLt & BRUNDIN

509 West Third Avenue

Anchorage, Alaska 99501

ROBERT MARTIN

MarTIN, PRINGLE, Fair,

Davis & OLIVER

320 Page Court

Wichita, Kansas 67202

Attorneys for Petitioner

PRESS OF BYRON S. ADAMS PRINTING, INC., WASHINGTON, D.C.

i,

QUESTIONS PRESENTED

Did the courts of the State of Alaska violate due

process in asserting personal jurisdiction over an alien

defendant who lacks the required minimum contacts

with the State of Alaska?

Did the courts of the State of Alaska incorrectly ap-

ply the stream of commerce theory of jurisdiction in

violation of this Court’s mandate in World-Wide

Volkswagen Corporation v. Woodsen, 444 U.S. 286

(1980)?

TABLE OF CONTENTS

PAGE

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SPUTUM Se Cac ch veadoabcodnccdccbgeedevenee's 2

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CONSTITUTIONAL PROVISIONS AND STATUTES INVOLVED... 3

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REASONS FOR GRANTING THE WRIT:

I. The Decision Of The Court Below Violated The

Petitioner’s Right To Due Process Of Law In

That It Permitted An Assertion Of Jurisdiction

Despite The Lack Of Minimum Contacts By The

Defendant With The State Of Alaska ........... 8

II. |The Courts Of The State Of Alaska Improperly

Applied The Stream Of Commerce Theory Of

Jurisdiction In Violation Of This Court’s Recent

Decision In World-Wide Volkswagen Corporation

v. Woodsen, 444 U.S. 286 (1980) ...........005. 13

CT Casas s Son shedcebeaedbosasvsrdwaedasseoes 18

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iv

TABLE OF AUTHORITES

CASES: PAGE

Amba Marketing Systems, Inc. vy. Jobar International,

BO te ON AD) ae ta 10, 11

Data Disc, Inc. v. Systems Technology Associates, Inc.,

~The oF of. ~u ay yi BAM ers 11

Hanson v. Denckla, 357 U.S. 235 (1958) ..........005. 9

International Shoe Co. v. Washington, 326 U.S. 310

SUP A Cos vd c dbs vis cle odes Lana ees alse sedece

L. B. Reeder Contractors of Arizona v. Higgins In-

dustries, 265 F.2d 768 (9th Cir. 1959) ........0006. 10

Leasco Data Processing Equipment Corp. v. Maxwell,

OGD Fide F900 AG SS ISTE iis vice eccdevevccncce 15

Schaffer v. Heitner, 433 U.S. 186 (1977) .......5eeees 9

World-Wide Volkswagen v. Woodsen, 444 U.S. 286

SEU dewlvblonw cGs bine ubipiety aba peas 7, 11, 12, 14, 15, 17

APPENDIX A

APPENDIX B

APPENDIX C

Vv

INDEX TO APPENDIX

PAGE

Supreme Court Of Alaska, Order, Dated

March 24, 1981, In Dornier, A.G., And

Dornier, GmbH, Petitioners, v. Donald

E. Elliott, et al., Respondents...........

Supreme Court Of Alaska, Fourth

Judicial District, Memorandum Decision,

Dated January 14, 1981, In Donald E.

Elliott, et al., Plaintiff, v. Dornier,

GmbH, et al., Defendants; Avonna L.

Sweaney, Plaintiff, v. Dornier, A.G.,

Dornier, GmbH, et al., Defendants; Bush

Air, Inc., Plaintiff, v. Dornier, A.G.,

Dornier, GmbH, et al., Defendants, Con-

solidated Actions For Purposes Of Dor-

nier’s Motion To Dismiss For Lack Of

POCRORE JUSIAGICUIOR,. <0 vcs deccccavccies

Superior Court Of Alaska, Fourth

Judicial District, Order Denying Recon-

sideration, Dated January 28, 1981, In

Donald E. Elliot, et al., Plaintiff, v. Dor-

nier, GmbH, et al., Defendants; Avonna

L. Sweaney, Plaintiff, v. Dornier, A.G.,

Dornier, GmbH, et al., Defendants; Bush

Air, Inc., Plaintiff, v. Dornier, A.G.,

Dornier, GmbH, et al., Defendants, Con-

solidated Actions For Purposes Of Dor-

nier’s Motion To Dismiss For Lack Of

Personal Jurisdiction................05.

APPENDIX D Constitutional Provisions And Statutes...

3a

9a

lla

IN THE

Supreme Court of the United States

OCTOBER TERM, 1981

ee

Dornier GmBH, a German Corporation, Petitioner,

Vv.

Dona_p E, Exuiott and Evetyn L. Exwiott, individually and as Personal

Representatives of the Estate or Scott v. Ettiott, Deceased, Busu Air, INC., an

Alaska corporation, and Wien Air ALAskA, INC., an Alaska corporation, Respondents.

Dornier, A. G., and Dornier, GmBH, Petitioners,

Vv.

AVONNA L, SWEANEY, Personal Representative of the Estate or Gary B. ROBERTS,

BUTLER AVIATION ComPpANy, Home O1 Company, LimiTep, FIELD AVIATION COMPANY,

Limitep, Cuirrorp L. SHort, Ray E. FerGuson, FRANK P. FERGUSON, DON FERGUSON,

Joe Ferauson, Don’s SAFARI FLYING SERVICE, KOTZEBUE FLYING SERVICE, INC., ALASKA

CENTRAL Airways, INC., GEORGE GRANT, and Arirparts, INC., Respondents.

Dornier, A. G., and Dornier, GMBH, Petitioners,

Vv.

Busu Air, INc., an Alaska corporation, BUTLER AVIATION COMPANY, HAMILTON

AVIATION COMPANY, HOME O1L COMPANY, FIELD AVIATION COMPANY, LIMITED,

Currorp L. Suort, Ray E. FerGcuson, FRANK P. FerGuson, Don FerGuson, Joe

FERGUSON, DOn’s SAFARI FLYING SERVICE, FERGUSON'S FLYING SERVICE, KOTZEBUE

FLYING Service, INC., ALASKA CENTRAL AirRways, INC., GEORGE GRANT,

and Airparts, INc., Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE STATE OF ALASKA

Petitioners, Dornier, GmbH, and Dornier, A.G.,

respectfully request that a writ of certiorari issue to

review the order of the Supreme Court of the State of

Alaska dated March 24, 1981 (Appendix A), denying

Dornier’s Petition for Review of a decision by the

Superior Court of the State of Alaska, Fourth Judicial

District at Bethel, based on the Alaska long-arm statute

which extends jurisdiction over nonresidents.

2

OPINIONS BELOW

The relevant opinions are unreported, and are at-

tached as appendices as foliows:

ApPpENDIX A — Supreme Court of Alaska, Order,

dated March 24, 1981, in Dornier, A.G., and Dornier,

GmbH, Petitioners, v. Donald E. Elliot, et al., Re-

spondents. |

APPENDIX B — Superior Court of Alaska, Fourth

Judicial District, Memorandum Decision, dated January

14, 1981, in Donald E. Elliott, et al., Plaintiff, v. Dor-

nier, GmbH, et al., Defendants; Avonna L. Sweaney,

Plaintiff, v. Dornier, A.G., Dornier, GmbH, et al.,

Defendants; Bush Air, Inc., Plaintiff, v. Dornier, A.G.,

Dornier, GmbH, et al., Defendants, consolidated actions

for purposes of Dornier’s Motion to Dismiss for Lack of

Personal Jurisdiction.

APPENDIX C — Superior Court of Alaska, Fourth

Judicial District, Order Denying Reconsideration, dated

January 28, 1981, in Donald E. Elliott, et al., Plaintiff,

v. Dornier, GmbH, et al., Defendants; Avonna L.

Sweaney, Plaintiff, v. Dornier, A.G., Dornier, GmbH,

et al., Defendants; Bush Air, Inc., Plaintiff, v. Dornier,

A.G., Dornier, GmbH, et al., Defendants, consolidated

actions for purposes of Dornier’s Motion to Dismiss for

Lack of Personal Jurisdiction.

JURISDICTION

The order of the court below was entered on March

24, 1981, by the Supreme Court of Alaska, the highest

court of the State of Alaska

The jurisdiction of this court is invoked pursuant to

28 U.S.C. §1257(3).

3

CONSTITUTIONAL PROVISION AND

STATUTE INVOLVED

The relevant provisions of the United States Con-

stitution in this suit are Amendment XIV, §1, and Arti-

cle 6, the Supremacy Clause. The relevant statutory pro-

vision in the Alaska Long-Arm Statute, As 09.05.015.

These provisions are set forth in Appendix D.

This petition seeks review of an order of the

Supreme Court of the State of Alaska dated March 24,

1981, denying Dornier’s Petition for Review of a deci-

sion by the Superior Court of the State of Alaska,

Fourth Judicial District at Bethel, based on Alaska’s

long-arm statute extending jurisdiction of that state’s

courts over nonresidents.

STATEMENT OF THE CASE

This litigation arises out of an air crash which oc-

curred on April 2, 1978, near Bethel, Alaska. The air-

craft involved was a Dornier Skyservant owned by Bush

Air, Inc., which is also a party in the various actions

hereto. Dornier, a defendant in all three actions, filed

motions to dismiss for lack of personal jurisdiction in

each of the three pending suits in Alaska, and those suits

were subsequently consolidated for purposes of hearing

Dornier’s jurisdictional arguments.

Petitioner Dornier is a corporation incorporated in

the Federal Republic of Germany with its principal of-

fices in Friedrichshafen, West Germany. It has never

conducted business within the State of Alaska, and has

had no offices in Alaska, no property in Alaska, no

agents in Alaska, no sales force in Alaska, and has had

no sales revenue from Alaska. The presence in Alaska of

4

an airplane manufactured by Dornier is the chance of

result of random resale of the aircraft and is not related

to the marketing efforts of Dornier. The original sale of

the subject aircraft was made f.o.b. Munich to Hamilton

Aviation, a Canadian company which then delivered the

aircraft to Home Oil for its commercial use in Canada,

and not for purposes of resale. Payment was due and

received from Hamilton in German deutschemarks at

delivery in Munich. The aircraft was transported to

Canada by a Danish ferry company, and during ship-

ment the ownership and risk of loss of the aircraft was

with the Canadian purchaser. After some five and one-

half years of service, it was sold by Home Oil to another

Canadian company, and was eventually acquired by

Alaska Air Service, in Anchorage. Thereafter the subject

Skyservant aircraft was sold to Bush Air operating out

of Bethel, Alaska.

Dornier has never sold an aircraft in the State of

Alaska, nor has it ever sold an aircraft in the Federal

Republic of Germany for delivery to a purchaser in the

State of Alaska. Dornier’s records reflect that only three

Skyservant aircraft have ever been in the service of

owners and operators in the State of Alaska. All three of

those aircraft were originally sold to purchasers in loca-

tions other than the State of Alaska and were for a

number of years in service, owned and operated by cor-

porations and firms in locations outside of the State of

Alaska. The Skyservant aircraft which is the subject of

this lawsuit was for a number of years owned, based,

and operated in Canada. Of the other two Skyservant

aircraft which eventually reached Alaska, one was own-

ed, based, and operated in Caracas, Venezuela for

several years, and the other owned, based, and operated

in the Republic of Panama and French West Indies for

5

several years. The later conveyances and transactions

were performed without the knowledge or consent of

Dornier, and in no way have any connection with Dor-

nier’s efforts to market its own aircraft. ’

Dornier has furnished repair and replacement parts

to Munz Northern Airlines in Alaska upon request by

the purchaser. The order for those replacement parts

were sent by international mail to Dornier in the Federal

Republic of Germany. Dornier selected the parts for

shipment to the destination specified by Munz Northern

Airlines, and adhered to its policy that purchase orders

outside of the Federal Republic of Germany are sold

f.o.b. Munich at quoted prices on the date of delivery

for shipment, with packing and transportation costs paid

by the purchaser. Dornier has never had or maintained a

sales office in the State of Alaska, aor has it ever had or

maintained a service, repair, or parts supply facility,

depot or warehouse for aircraft parts in the State of

Alaska. Neither has Dornier ever authorized or directed

any of its sales personnel or factory representatives to

make sales calls or conduct business or travel in the

State of Alaska. Dornier has not made or carried out

any direct solicitation for the sale of aircraft or aircraft

parts in the State of Alaska. Dornier has no manufactur-

ing plants or facilities which it owns or operates at any

location in the United States and has never owned or

operated any manufacturing plants or facilities in the

United States. It has never owned or operated any sales,

service, or repair station or facility for its products at

any location in the United States.

The Skyservant aircraft involved in this suit have

not been manufactured in mass quantities which have

flooded the markets of the world, nor are Dornier air-

6

craft available through a distributor in the State of

Alaska. Only a total of 228 Skyservant aircraft have ever

been manufactured and sold, and of those 121 were sold

and delivered to the government of the Federal Republic

of Germany. Thus there is a total of but 107 such air-

craft which have ever been sold commercially.

Plaintiffs’ complaints allege that the subject aircraft

crash occurred near Bethel, Alaska, on April 2, 1978,

and that the subject aircraft involved was designed,

manufactured, and assembled by Dornier. On that basis,

plaintiffs have filed complaints in the Superior Court of

the State of Alaska, Fourth Judicial District at Bethel,'

seeking damages from Dornier on bases which include

negligence, warranty, and strict liability.

Petitioner Dornier initially moved for dismissal in

the Elliot case on June 2, 1980, and subsequently filed

motions for dismissal in the Sweaney and Bush Air cases

on July 11, 1980. The motions were based upon

Dornier’s contentions that it was not subject to personal

jurisdiction in Alaska, and that plaintiffs had failed to

make adequate service of process. After briefing and

oral argument, the Superior Court for the State of

Alaska, Fourth Judicial District, denied Dornier’s mo-

tion to dismiss on jurisdictional grounds, and held that

Dornier had sufficient minimum contacts with the State

' Bethel is a small, remote native community on the banks of the

Kuskokwim river in western Alaska, not accessable by road.

7

of Alaska to satisfy the due process requirements of the

Fourteenth Amendment and to permit an Alaska court

to acquire personal jurisdiction over Dornier via the

Alaska long-arm statute.

In reaching its conclusion, the Superior Court found

that at the time of the crash Dornier had a distributor

for the Western United States whose territory included

Alaska. Materials filed by Dornier clearly establish that

the referenced distributorship agreement was never effec-

tively implemented nor put into operation. The agree-

ment involved was with Land/Air Sales & Leasing, Inc.,

a California concern, but the contract did not go into

force because Land/Air failed to comply with the re-

quirements that they purchase parts and stock-in-trade.

There is no showing that Land/Air ever sent personnel

into Alaska, and the agreement was cancelled by Dornier

within a few months of its inception because Land/Air’s

failure to comply. Consequently, Dornier moved for

reconsideration of its motion to dismiss alleging that the

Superior Court misconstrued the status of Dornier’s

distributorship agreement with Land/Air Sales & Leas-

ing, Inc., The Superior Court, however, denied

Dornier’s motion for reconsideration concluding, on

January 28, 1981, that the subject point had been raised

and considered, and was not misunderstood by the

court.

On February 9, 1981, Dornier filed a petition for

review with the Supreme Court of the State of Alaska,

seeking reversal of the denial of its motion to dismiss for

lack of jurisdiction by the Superior Court. In so doing,

Dornier explicitly referenced the constitutional violations

inherent in the decision of the Superior court, and ex-

8

pressly pointed out the inconsistency of the decision with

this Court’s opinion in World-Wide Volkswagen v.

Woodsen. Nonetheless, the Supreme Court for the State

of Alaska denied without opinion Dornier’s petition for

review.’

Dornier brings this appeal from the decision that

jurisdiction can be asserted over it consistent with the

due process clause of the Fourteenth Amendment to the

United States Constitvtion.

REASONS FOR GRANTING THE WRIT

I. The Decision Of The Court Below Violated The Peti-

tioner’s Right To Due Process Of Law In That It Permit-

ted An Assertion Of Jurisdiction Despite The Lack Of

Minimum Contacts By The Defendant With The State Of

Alaska.

Dornier’s petition for review should be granted as a

means of relieving the undue hardship and burden im-

posed by the decision of the courts below. The erroneous

decision requires Dornier to defend an action in a forum

* It should be note that there is presently pending before the

Supreme Court of Alaska a second petition for review relating to

the Superior Court’s refusal to require discovery against Dornier to

proceed in accordance with the Hague Convention of 1970 relating

to the Taking of Evidence Abroad, 23 UST 2557, TIAS 7444. That

treaty became effective in the United States in 1972, and is ap-

plicable in Alaska via the Supremacy Clause of the United States

Constitution, Article 6 (See Appendix D). The refusal of the Alaska

Court to abide by its provisions further demonstrates the prejudice

to Dornier from suit in Alaska, and the need for review of the

jurisdictional question.

The pending petition for review also seeks to establish that service

of process over Dornier was ineffective and points out that the laws

of the Federal Republic of Germany require that suits against Dor-

nier be brought in the German court of Landgericht-Ravensburg.

9

far from its home, and in particular, in a forum which,

based on its marketing policies, it had no reason to

foresee as a situs for litigation. The expense and hard-

ship involved in defending in Alaska are particularly

significant, as inquiry into the design and manufacture

of the subject aircraft will require an examination of

numerous documents written in the German language

and witnesses located in the Federal Republic of Ger-

many. The subject litigation in fraught with practical

problems which would plague the defense of Dornier,

and which render it difficult if not impossible for Dor-

nier to adequately defend itself in that forum.

This injustice perpetrated on Dornier is a direct

violation of the due process clause of the Fourteenth

Amendment to the United States Constitution, as that

clause has been interpreted to require that an assertion

of jurisdiction can only be made where the minimum

contacts with the forum state exist. The constitutional

provision stands as an important legal right of litigants

throughout the United States, and the impairment of

that legal right by assertion of jurisdiction in Alaska

works a substantial hardship which would not exist but

for the decision below. Immediate review of that deci-

sion is required in order to reaffirm the viability of those

constitutional principles, and to prevent the hardship

and injustice that will befall Dornier should it be re-

quired to wait until the end of the litigation in order to

establish its jurisdictional arguments.

It has long been recognized that the due process

clause of the Fourteenth Amendment prevents a state

from acquiring jurisdiction over the person of a nonresi-

dent defendant merely by service of process upon that

defedant outside of the state. A state camnot render a

judgment against a nonresident in the absence of per-

10

sonal jurisdiction. Schaffer v. Heitner, 433 U.S. 186

(1977). Thus a state may assert long-arm jurisdiction

over a nonresident defendant only if there are sufficient

minimum contacts with the state ‘‘so that maintenance

of the suit does not offend the traditional notions of fair

play and substantial justice.’’ /nfernational Shoe Co. v.

Washington, 326 U.S. 310 (1945).

However minimal the burden of defending in a

foreign court, a defendant may not be called upon to do

so unless he has the requisite minimum contacts. Hanson

v. Denckla, 357 U.S. 235 (1958); Schaffer v. Heitner,

supra. In order to establish those minimum contacts, the

defendant must have done some act by which he pur-

posefully availed himself of the privilege of conducting

activities within the forum state, thus invoking the

benefits and protections of the laws of that state. Han-

son v. Denckla, supra.

In view of the foregoing we may observe that Dor-

nier has not transacted business within the State of

Alaska. Dornier owns ne property within the State of

Alaska, and has no salesmen or agents within the state.

The sale of the subject aircraft was consumated outside

of the United States, and delivery of the product was

completed outside the United States. With regard to the

aircraft involved in the subject crash, Dornier had no

control over subsequent random resale of the product.

The presence of the subject aircraft within the State of

Alaska is the chance result of a series of unrelated events

and has no relation whatever to Dornier’s marketing of

its aircraft.

Due process analysis also involves a consideration of

the overall reasonableness of subjecting a nonresident

defendant to jurisdiction in a particular forum. Amba

Marketing Systems, Inc. v. Jobar International, 551 F.2d

784 (9th Cir. 1977); L. B. Reeder Contractors of

Arizona v. Higgins Industries, 265 F.2d 768 (9th Cir.

1959). The Ninth Circuit has enunciated the process by

which jurisdictional due process questions are analyzed,

551 F.2d 784 at 789:

Federal law is controlling on the issue of due pro-

cess. It is essentially a question of whether Jobar

has sufficient ‘‘minimum contacts’? with Arizona

such that invoking jurisdiction there would be con-

sistent with the notions of ‘‘fair play and substantial

justice.’’ [Jnternational Shoe, supra.) Although

under this flexible standard a case by case deter-

mination necessarily must be made, this court has

adopted a basic three step analysis in making such

determinations. First, the nonresident defendant

must do some act or consumate some transaction

within the forum, however indirect it may be. Se-

cond, the claim must be one which arises out of, or

results from the defendant’s activities within the

forum, even if the actual claim comes to fruition in

another state. Finally, the overall reasonableness of

subjecting the defendant to jurisdiction of the

forum’s court must be considered.

The three step approach in Amba Marketing

Systems, supra, was also applied to Data Disc, Inc. v.

Systems Technology Associates, Inc., 557 F.2d 1280 (9th

Cir. 1977). A nonresident defendant was there held

amenable to California jurisdiction despite the absence

of substantial contacts with California. Though the

defendant’s contacts were not sufficiently pervasive to

subject it to general jurisdiction, its participation in con-

tract negotiations in California were sufficient to subject

it to jurisdiction with regard to claims arising from that

contract. Similarly, misrepresentations induced reliance

12

in California, thereby allowing jurisdiction over the tort

claims too. Having reached this point in the analysis, the

court then stated at 1288:

We must still determine, however, whether the exer-

cise of jurisdiction over the tort claim would be

reasonable. ... It may be unreasonable to subject

an out-of-state defendant to jurisdiction where the

allegedly torious act is committed outside of the

forum state, having only an effect within the state,

if the act is negligent rather than purposeful. The

degree to which the defendant interjects himself into

the state affects the fairness of subjecting him to

jurisdiction. . . . [Emphasis added.]

The foregoing must be considered in light of a re-

cent controlling decision by this Court, World-Wide

Volkswagen Corp. v. Charles S. Woodsen, 444 U.S. 286

(1980). In that case the courts of the State of Oklahoma

had asserted jurisdiction over defe.dants World-Wide

Volkswagen Corporation and Seaway Volkswagen, Inc.,

despite the absence of any showing that any automobile

other than the subject one in the accident had ever

entered the State of Oklahoma. The Court reviewed its

earlier decisions and dismissed any suggestion that all

restrictions on personal jurisdiction had been removed.

It stated, at 565:

The due process clause does not contemplate that a

state may make a binding judgment in personam

against an individual or corporate defendant with

which the state has no _ contacts, ties, or

relations. ... Even if the defendant would suffer

minimal or no inconvenience from being forced to

litigate before the tribunals of another state; even if

the forum state has a strong interest in applying its

law to the controversy; even if the forum state is the

most convenient location for litigation, the due pro-

cess clause, acting as an instrument of interstate

13

Sederalism, may sometimes act to divest the state of

its power to render a valid judgment. (Emphasis

added.]

The plaintiffs had argued that it was ‘‘foreseeable’’ that

an automobile, by its very nature, could cause injury in

Oklahoma. The Court rejected that argument and stated

at page 566:

Yet ‘‘foreseeability’’ alone has never been a suffi-

cient benchmark for personal jurisdiction under the

due process clause... .

This is not to say, of course, that foreseeability is

wholly irrelevant. But the foreseeability that is

critical to due process analysis is not the mere

likelihood that a product will find its way into the

forum state. Rather, it is that the defendant’s con-

duct in connection with the forum state is such that

he should reasonably anticipate being held into

court there... . [Emphasis added.]

The law of World-Wide Volkswagen should have

been determinative of the issue in this case. There were

no sales of the subject aircraft in the State of Alaska,

and it was not foreseeable that any of the aircraft would

ever be sold in the State of Alaska in view of the peti-

tioner’s marketing policies. While it may be foreseeable

that an aircraft may be flown anywhere in the world, it

is not reasonable or fair for defendant Dornier to defend

anywhere in the world that ‘‘unilateral activities’ of

others may place its aircraft. Dornier has had no contact

with the State of Alaska, and its conduct did not render

it foreseeable that these particular aircraft would reach

the State of Alaska. The question involved here is not

one of where the most convenient forum for litigation

would be, but rather one relating to the power of the

state to subject an alien corporation to jurisdiction mere-

ly because the plaintiffs find it convenient to do so.

14

Proceeding with the litigation below without first

considering Dornier’s position regarding personal

jurisdiction would subject petitioner to an expensive and

burdensome litigation that may ultimately be rendered

unnecessary. Only by granting this petition for review

and considering now the erroneous decision of the courts

below, will Dornier be relieved of this burden and will

its legal rights be recognized.

Il. The Courts Of The State Of Alaska Improperly Applied

The Stream Of Commerce Theory Of Jurisdiction In

Violation Of This Court’s Recent Decision In World-

Wide Volkswagen Corporation v. Woodsen, 444 U.S.

286 (1980).

Dornier was held to jurisdiction in Alaska because,

in the words of the Superior Court:

...the Skyservant aircraft, manufactured in Ger-

many by a German firm, was voluntarily placed into

the worldwide stream of commerce without restric-

tion by Dornier. Although the manufacturer did not

sell the aircraft to an Alaska operator, it was

foreseeable to the manufacturer that the aircraft

would be operated in Alaska and could be involved

in personal injury or property damage situations in

the state....

The foregoing is an improper application of the stream

of commerce theory of jurisdiction, and its conclusion

effectively eliminates all restrictions on jurisdictional

assertions against manufacturers. Under that decision

any manufacturer that learns that one of its products has

reached a particular forum, irrespective of the means by

which the product reached that destination, is subject to

suit in that forum. Such a rule exceeds that state’s

powers as the constitutionally required minimum con-

tacts are not present.

15

While AS 09.05.015(a)(4)(B) speaks of ‘‘long-arm’’

jurisdiction over nonresident defendants where a product

has been used in the State of Alaska, this Court has held

that constitutional due process requires more than mere

use of a product within a state. In World-Wide

Volkswagen v. Woodsen, supra, the Court stated at page

567:

The forum state does not exceed its powers under

the due process clause if its asserts personal jurisdic-

tion Over a corporation that delivers its product into

the stream of commerce with the expectation that

they will be purchased by customers in the forum

state. [Emphasis added.]

No Skyservant aircraft has ever been sold in Alaska

other than through random resale, and Dornier has no

sales organization marketing its aircraft within the State

of Alaska

That it is marketing activity of the manufacturer

that is important to jurisdictional criteria, rather than

the random activities of subsequent purchasers, was fur-

ther established by this Court when it stated, in the

World-Wide decision at 567:

It is foreseeable that purchaser of automobiles sold

by World-Wide and Seaway may take them to

Oklahoma. But the mere unilateral activity of those

who claim some relationship with a nonresident

defendant cannot satisfy the requirement of contact

with the forum state. [Emphasis added.]}

The jurisdictional point emphasized in World-Wide

Volkswagen v. Woodsen, supra, is that foreseeability is a

critical factor in any stream of commerce jurisdictional

assertion. The foreseeability required is more than a

mere speculative possibility must have actual knowledge,

or good reason to know, that is conduct will have effect

16

in the forum state. Leasco Date Processing Equipment

Corp. v. Maxwell, 468 F.2d 1326, 1341 (2d Cir. 1972).

This Court stated in World-Wide, at 567:

The foreseeability that is critical to due process

analysis is not the mere likelihood that a product

will find its way into the forum state. Rather, it is

that the defendant’s conduct in connection with the

forum state is such that he should reasonably an-

ticipate being held into court there. . . . [Emphasis

added.]

There were no sales of the subject aircraft in the State of

Alaska, nor in the United States, and consequently there

was no reason for Dornier to foresee that any Skyser-

vant aircraft would ever be sold within the State of

Alaska, Dornier had no render it foreseeable that these

particular aircraft would reach the State of Alaska.

Opponents of Dornier’s efforts to obtain dismissal

for lack of personal jurisdiction relied heavily upon the

presence in Alaska of three Skyservant aircraft manufac-

tured by Dornier. They conceded, however, that none of

those aircraft were sold by Dornier to entities within the

State of Alaska, and indeed, it was established that all

three of the aircraft which did reach the State of Alaska

were initially sold by Dornier to purchasers outside of

the United States. Dornier had no involvement in the

subsequent resales of the aircraft manufactured by it,

and the fact that Dornier subsequently acquired

knowledge to the effect that these three aircraft were

operating in the State of Alaska is not a contact by Dor-

nier with the State of Alaska.

Dornier had supplied replacement parts for two air-

craft operating in Alaska pursuant to orders from Munz

Northern Airlines forwarded via international mail to

Dornier in the Federal Republic of Germany. Dornier’s

17

policy, as utilized with regard to these transactions, was

that purchases of repair or replacement parts were made

**ex works’’, with packing and transportation costs paid

by the purchaser. This is the equivalent of a sale f.o.b.,

which clearly demonstrates that the focus of the transac-

tion was at the factory in West Germany. If anything,

those transactions reflected contacts by Munz Northern

Airlines with the Federal Republic of Germany rather

than a contact by Dornier with the State of Alaska.

Those sales of replacement parts were performed at the

request of the purchaser, and not upon the solicitation

of sale by Dornier.

Uncontradicted affidavits submitted by Dornier in

connection with its motion to dismiss, and its petition

for review, clearly established that though Dornier did

enter into a distributorship agreement with Land/Air

Sales & Leasing, Inc. of Chino, California, the

distributorship arrangement never became effective

because of the failure of the distributor to comply with

the basic requirements of the agreement. The distributor-

ship agreement was ineffective from its inception, and

there was no sales activity under it in Alaska or

anywhere else.

It follows that Dornier’s marketing policy did not

make it foreseeable that it might be held into suit in

Alaska, and consequently the subjection of Dornier to

jurisdiction in the State of Alaska is contrary to this

Court’s decision in World-Wide Volkswagen v.

Woodsen. This Court must act and reverse the decision

below to preserve the basic constitutional rights involved

and to avoid erosion of the fundamental principles set

forth by this Court in World-Wide Volkswagen v.

Woodsen.

18

CONCLUSION

This case presents to the Court an opportunity to

clearly articulate that stream of commerce jurisdiction

applies only with regard to the marketing activities of

the nonresident defendant. Misuse of the long-arm

statutes where the product of a nonresident manufac-

turer has reached the forum state other than through its

marketing activities can result in extreme unfairness and

prejudice to a nonresident defendant, the burden of

which is only magnified in the case of an alien defend-

ant. The expense and hardship imposed upon defendant

Dornier in this case require correction by this Court, and

the refusal of the courts below to apply the law regard-

ing jurisdiction as expressed in the opinion of World-

Wide Volkswagen v. Woodsen similarly mandates im-

mediate review.

For the foregoing reasons, this petition for a writ of

certiorari should be granted.

Respectfully submitted,

Davip H. THORSNESS

(Counsel of Record)

HUGHES, THORSNESS, GANTZ,

POWELL & BRUNDIN

ROBERT MARTIN

MARTIN, PRINGLE, FAIR,

Davis & OLIVER

Attorneys for Petitioner

APPENDIX

APPENDIX A

IN THE SUPREME COURT OF THE STATE OF ALASKA

Supreme Court No. 5787

Dornier, A.G.., and Dornier, GmsH, Petitioners

Vv.

DONALD E. Extiort, ef al., Respondents.

Superior Court No.

4BE 79-140 Civil

4BE 80-57 Civil

4BE 80-59 Civil

Before: Rabinowitz, Chief Justice, Connor, Burke, Mat-

thews and Compton, Justices.

Order

On consideration of the petition for reveiw filed February

17, 1981, and the responses filed on February 19 and

February 23, 1981,

IT IS ORDERED:

The petition for review is denied.

Entered by direction of the court at Anchorage, Alaska

on March 24, 1981.

CLERK OF THE

SUPREME COURT

/s/ Ropert D. Bacon

ROBERT D. BACON

3a

APPENDIX B

IN THE SUPERIOR COURT FOR THE STATE OF ALASKA

FOURTH JUDICIAL DISTRICT

AT BETHEL

No. 4BE-79-140 Civil

Donatp E. Exvtiort and Evetyn L. Exuiort, individually

and as Personal Representatives of the Estate of Scorr V.

E.uiott, Deceased, Plaintify,

V.

Dornierk GmsH, a German corporation, Busn Arr, INc.,

an Alaska corporation, and Wren Arr ALASKA, INC., an

Alaska corporation, Defendants.

No. 4BE-80-59 Civil

AvVoNnNA L. SWEANEY, Personal Representative of the

Estate of Gary B. Roserts, Plaintiff,

Vv.

Dornier, A.G., Dornier GéMBH, BUTLER AVIATION

CoMPANY, HAMILTON AVIATION COMPANY, Home OIL

ComPANY, LIMITED, FIELD AVIATION COMPANY, LIMITED,

Currorp L. SHort, Ray E. FerGuson, FRANK P.

Feracuson, Don FERGUSON, Joz FERGUSON, Don’s SAFAIR

Fiyino Service, KoTzesugk FLYING Service, INC., ALASKA

CENTRAL ArRWAYS, INC., GEORGE GRANT, and AIRPARTS,

Inc. Defendants.

4a

No. 4BE-80-57 Civil

Busn Air, Inc., an Alaska corporation, Plaintiff,

Vv.

Dornier, A.G., Dornier GésH, BUTLER AVIATION

ComMPANY, HAMILTON AVIATION COMPANY, Home Or

Company, LimiTeD, Fretp AVIATION CoMPANY, LIMITED,

Currorp L. SHort, Ray E. Ferauson, Frank P.

Ferauson, Don Fercuson, Joz Fercuson, Don’s SAFAIR

FLYING SERVICE, FERGUSON'S FLYING SERVICE, KOTZEBUE

Fiyinec Service, Inc., ALASKA CENTRAL AIRWAYS, INC.,

Geroroe Grant, and Arrparts, INnc., Defendants.

Memorandum Decision

These cases have been joined for consideration of

defendant Dornier’s motion to dismiss for lack of personal

jurisdiction.'

The litigation concerns the fatal crash of a Skyservant

aircraft near Bethel, Alaska, on April 2, 1978. The aircraft

was manufactured by Dornier in the Federal Republic of

Germany. According to Dornier, the fivm has never

conducted business within the State of Alaska, it has no

offices, property, agents, or sales force in Alaska and has had

no sales revenues from Alaska.

The aircraft involved in this case was sold in Germany to

a Canadian company which in turn delivered it to Home Oil

Company of Calgary. After several years’ service in Canada

the plane was acquired by an Anchorage firm and was

operated in Alaska from 1974 until the crash. Plaintiffs and

co-defendants opposing the motion assert that personal

jurisdiction over Dornier, a foreign defendant whose products

' The parties have stipulated to submission of this aspect of the

motion to dismiss without reference to the sufficiency of process

issues.

Sa

allegedly caused injury to persons or property within Alaska,

is conferred by A.S. 09.05.015, Alaska’s ‘‘long-arm’’ statute.

Alaska’s “‘longarm’’ statute has been construed by our

Supreme Court to extend jurisdiction to the maximum reach

consistent with due process under the Fourteenth Amendment.

Jonz v. Garrett/Airsearch Corp., 490 P.2d 1197 (Alaska

1971). Such due process standards are met when sufficient

minimum contacts with the state exist ‘‘so that maintenance

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

subsiantial justice’. International Shoe v. Washington, 326

U.S. 319, 90 L.Ed. 95 (1945). The “‘minimum contact”’

requirement is satisfied in all forums where it is forseeable to

the manufacturer that the product may be marketed when a

manufacturer voluntarily places its product in the general

stream of commerce without restriction. Commodities World

Inter’l Corp. v. Royal Mile, Inc., 440 F.Supp. 1373, 1378-79

(D.C. Puerto Rico 1977); Gray v. American Radiator and

Standard Sanitary Corp. 22 I1.2d 432, 176 N.E.2d 761 (1961):

Modern Trailer Sales, Inc. v. Traweek, 561 P.2d 1192 (Alaska

1971). The stream of commerce doctrine also applies to

manufacturers of component parts and manufacturers whose

products are distributed by independent intermediaries.

Stephenson v. Duriron Co., 401 P.2d 423 (Alaska 1965), cert.

denied 382 U.S. 956, 15 L.Ed.2d 360 (1965);

Volkswagenwerk, A.G. v. Klippan, GmbH, 611 P.2d 498

(Alaska 1980).?

The opponents of the motion assert that Dornicz

manfactured 228 Skyservant aircraft for sale and operation

generally throughout the world. To Dornier’s knowledge,

three Skyservant aircraft have been owned and operated in

Alaska and, as to two aircraft operated by Munz Northern

Airlines of Nome, Dornier has filled orders from Alaska for

? World Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 62

L.Ed. 2d 490 (1980), relied on by Dornier is distinguishible from

this litigation for substantially the same reasons as Klippan, 611

P.2d at 501 n.6.

6a

repair or replacement parts. Dornier also has provided copies

of technical data and flight manual updates to operators of its

aircraft in Alaska and at the time of the crash had a

distributor for the western United States whose territory

included Alaska.

Dornier has sought and obtained certification for the

aircraft from the United States Federal Aviation

Administration and its products have been advertised in

publications which circulate throughout the national aviation

community. Published information about the Skyservant

indicates that it is used worldwide in more than 30 countries

and that its STOL characteristics are suitable for short,

unprepared landing strips and Arctic conditions, which are

common in much of Alaska.’ The three Skyservant aircraft

known to Dornier to have been operated in Alaska were

previously operated in Canada and Central and South

America.

Based on the foregoing, the Court finds that the

Skyservant aircraft, manufactured in Germany by a German

firm, was voluntarily placed into the worldwide stream of

commerce without restriction by Dornier. Although the

manufacturer did not sell the aircraft to an Alaska operator,

it was forseeable to the manufacturer that the aircraft would

be operated in Alaska and could be involved in personal

injury or property damage situations in this state. This

likelihood is more than mere conjecture since for several years

prior to the fatal crash Dornier knew its aircraft were

operating in Alaska, it sold replacement parts to an Alaska

customer and it had a distributor whose territory included

Alaska.

These circumstances, coupled with the substantial factor

that a fatal crash of an aircraft manufactured by Dornier

occurred in Alaska allegedly causing personal injury wrongful

death, damage and property loss to three Alaskan plaintiffs,

’ Affidavit of Phyllis C. Johnson.

7a

constitute sufficient ‘‘mininum contacts’ with the state of

Alaska to satisfy the due process requirements of the

Fourteenth Amendment and to permit an Alaskan court to

acquire personal jurisdiction over Dornier via Alaska’s ‘‘long-

arm’’ statute, A.S. 09.05.015. Therefore, Dornier’s motion to

dismiss for lack of personal jurisdiction will be denied.

IT IS SO ORDERED.

DATED at Bethel, Alaska this 14th day of January,

1981.

SEAL /s/ CruISTOPHER R. COOKE

. , , Christopher R. Cooke

cc: files Superior Court Judge

attys

9a

APPENDIX C

IN THE SUPERIOR COURT FOR THE STATE OF ALASKA

FOURTH JUDICIAL DISTRICT

AT BETHEL

No. 4BE-79-140 Civil

Donatp E. Extiott and Evetyn L. Exuiott, individually

and as Personal Representatives of the Estate of Scott V.

E.uiott, DeceaseD, Plaintiff,

Vv.

Dornier GmBH, a German corporation, BusH Air, INC.,

an Alaska corporation, and Wien Arr ALASKA, INC., an

Alaska corporation, Defendants,

No. 4BE-80-59 Civil

AvonNnA L. SwWEANEY, Personal Representative of the

Estate of Gary B. Roserts, Plaintiff,

Vv.

Dornier, A.G., DornreR GmMBH, BUTLER AVIATION Com-

PANY, HAMILTON AVIATION COMPANY, HOME O11 COMPANY,

LimITED, FIELD AVIATION COMPANY, LIMITED, CLIFFORD L.

SHort, Ray E. FERGUSON, FRANK P. FERGUSON, Don

FerGcuson, JozE FerGuson, Don’s SAFAIR FLYING SERVICE,

KOTZEBUE FLYING SERVICE, INC., ALASKA CENTRAL AIR-

ways, INc., GEORGE GRANT, and AIRPARTS, INC.

Defendants.

10a

No. 4BE-80-57 Civil

Busu Ar, Inc., an Alaska corporation, Plaintiff,

v.

Dornier, A.G., Dorner GémsBH, BUTLER AVIATION Com-

PANY, HAMILTON AVIATION CoMPANY, Home Or ComPaAny,

LimITeD, FrELD AVIATION COMPANY, LIMITED, CLIFFORD L.

SHort, Ray E. Fercuson, FRANK P. Fercuson, Don

FerGcuson, Joe Fercuson, Don’s SAFAIR FLYING SERVICE,

FERGUSON’S FLYING SERVICE, KOTZEBUE FLYING SERVICE,

Inc., ALASKA CENTRAL AIRWAYS, INC., GEORGE GRANT, and

Arrparts, Inc., Defendants.

Order Denying Reconsideration

Defendant Dornier’s motion for reconsideration states

that the Court misconstrued the status of Dornier’s

distributorship agreement with Land/Air Sales and Leasing,

Inc. This point was raised and considered during argument on

the motion to dismiss and was not misunderstood by the

Court. The significance of the distributorship agreement per-

tains not to whether it was ‘‘effectively implemented’”’ or was

“‘operative’’ at the time of the crash but to the forseeability

of Alaska, part of the distributor’s sales territory, as a forum

for litigation involving Dornier’s products.

The motion to reconsider this Court’s decision of

January 14, 1981, is without merit and is, therefore, denied.

IT IS SO ORDERED.

DATED at Bethel, Alaska this 28th day of January,

1981.

(SEAL) /s/ CHRISTOPHER R. COOKE

Christopher R. Cooke

Superior Court Judge

APPENDIX D

Constitutional Provisions

Fourteenth Amendment To United States Constitution

Section 1. ... No state shall make or enforce any law

which shall abridge the privileges or immunities of citizens of

the United States; nor shall any state deprive any person of

life, liberty, or property, without due process of law; nor

deny to any person within its jurisdiction the equal protection

of the law.

Article 6 Of United States Constitution

This Constitution, and the laws of the United States

which shall be made in pursuance thereof; and all treaties

made, or which shall be made under the authority of the

United States, shall be the supreme law of the land; and the

judges in every state shall be bound thereby, anything in the

constitution or laws of any state to the contrary

notwithstanding.

Statutes

AS 09.05.015

(a) A court of this state having jurisdiction over the sub-

ject matter has jurisdiction over a person served in

an action according to the rules of civil pro-

cedure....

(4) in an action claiming injury to person or proper-

ty in this state arising out of an act or omission

out of this state by the defendant, provided, in

addition, that at the time of the injury either,

(A) solicitation or service activities were carried

on in this state by or on behalf of the

defendant; or

(B) product, materials or things processed, ser-

viced or manufactured by the defendant

were used or consumed in this state in the

ordinary course of trade;