Petition for Writ of Certiorari — Humphreys (Cayman) Ltd. v. Wilson

In The

Supreme Court of the United States

October Term, 1990

Humphreys (Cayman) Limited,

Petitioner,

v.

Dorothy A. Wilson And Louie P. Wilson,

Respondents.

Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Seventh Circuit

Brian J. Martin

(Counsel Of Record)

James A. McDermott

Jan M. Carroll

BARNES & THORNBURG

1313 Merchants Bank Building

11 South Meridian Street

Indianapolis, In 46204

(317) 638-1313

Attomeys For Petitioner

“Sais iain Cie

QUESTION PRESENTED

Whether a foreign corporation that operates a hotel in

another country may, consistently with due process, be forced

to defend in the state of Indiana an action arising from injuries

suffered in the foreign hotel.

ee

PARTIES

The appellants in the court of appeals were Humphreys

(Cayman) Limited and Holiday Inns, Inc. The appellees were

Dorothy A. Wilson and Louie P. Wilson. Humphreys

(Cayman) Limited’s parent corporation is Humphreys Overseas

Development Company, Ltd. Humphreys (Cayman) Limited

has no nonwholly owned subsidiaries.

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TABLE OF CONTENTS

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Constitutional provisions involved ...........

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Reasons for granting the petition ............

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Appendix:

A. Opinion of the United States Court of Appeals

for the Seventh Circuit (October 24, 1990)

B. Opinion of the United States District Court for

the Southem District of Indiana (March 25,

ES REE Sa ee

C. Denial of Petition for Rehearing (November 21,

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iv

TABLE OF AUTHORITIES

Page

Case:

Shute v. Carnival Cruise Lines, 897 F.2d 377

(9th Cir. 1990), cert granted, No. 89-1647

ee ae eee at a Kw 3,4,5

Constitution, statute, and rule:

Due Process Clause, Amend. XIV .......... y

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Taras. hs os ak we ee oe ae 3

No.

| In The

Supreme Court of the United States

October Term, 1990

Humphreys (Cayman) Limited,

Petitioner,

v.

Dorothy A. Wilson And Louie P. Wilson,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

OPINIONS BELOW

The opinion of the court of appeals (App., infra, 1a-19a) is

reported at 916 F.2d 1239 (1990). The memorandum opinion

of the district court (App., infra, 20a-42a) is not reported.

JURISDICTION

The judgment of the court of appeals was entered on

October 24, 1990, and a petition for rehearing was denied on

November 21, 1990. App., infra, 43a. The jurisdiction of this

Court is invoked under 28 U.S.C. § 1254(1).

CONS: TTUTIONAL PROVISION INVOLVED

The Due Process Clause of the Fourteenth Amendment

provides: “No State shall . . . deprive any person of life, liberty,

or property, without due process of law.”

STATEMENT

1. Petitioner is incorporated under the laws of the Cayman

Islands. Petitioner operates a hotel in the Cayman Islands under

a license from Holiday Inns, Inc. At times relevant to this

action, petitioner had reservation offices in Miami, Florida, and

Memphis, Tennessee. Petitioner, however, had no other place

of business in the United States. App., infra, 2a.

In 1981, petitioner entered into a contract with American

Trans Air (American) to provide accommodations for tours run

by American to the Cayman Islands. Under that contract, the

rooms in petitioner’s Cayman Islands hotel were guaranteed at

a reduced rate for American’s tours. American, however, did

not act as an agent for petitioner; American had no authority to

bind jetitioner and it did not purport to do so. App., infra,

2a-3a, 14a-1Sa.

2. In 1986, respondents Dorothy and Louie Wilson com-

menced this action against petitioner and Holiday Inns, Inc. in

the United States District Court for the Southern District of

Indiana. That court’s jurisdiction was based on diversity of

citizenship and amount in controversy, see 28 U.S.C. § 1332.

Respondents are citizens of the state of Illinois. App., infra,

13a. Respendents allege in their complaint that they par-

ticipated in a tour organized by American that left Indianapolis,

Indiana on October 28, 1984. App., infra, 3a. Respondents

stayed at petitioner’s hotel in the Cayman Islands. Respondents

allege that, on October 30, 1984, Dorothy Wilson was assaulted

by an intruder in her hotel room. Respondents contend that

Dorothy Wilson suffered serious injuries as a result of that

attack. /d. at 3a. Respondents’ complaint then sets forth 13

counts against petitioner and Holiday Inns, Inc. Those counts

are based on theories of negligence, breach of contract, and

negligent infliction of emotional distress. Jd. at 3a.

3. The district court denied petitioner’s motion to dismiss

for lack of personal jurisdiction. App., infra, 41a. The court

noted that Indiana’s long-arm statute, Ind. Trial Rule 4.4,

reaches to the limits of the Due Process Clause. /d. at 30a. The

court then held that Indiana could constitutionally exercise

jurisdiction over petitioner because it had a business relation-

ship with an Indiana travel club and it advertised in national

periodicals Jd. at 36a. The district court certified its order for

immediate review by the court of appeals.

4. A divided panel of the courtofappeats affirmed. App.,

infra, 13a. The court ruled that petitioner had sufficient con-

tacts with Indiana so that “the district court correctly deter-

mined that [petitioner] is subject to persona! jurisdiction in

Indiana.” Jd. at 9a. The court of appeals stated that those

“contacts” were: (1) petitioner advertised in Indiana, (2)

petitioner entered into a contract with an Indiana tour company,

and (3) petitioner sent representatives to Indiana to negotiate

that contract. In support of its holding, the court cited the Ninth

Circuit’s opinion in Shute v. Carnival Cruise Lines, 897 F.2d

377 (9th Cir. 1990), cert granted, No. 89-1647 (Oct. 2, 1990).

Judge Will dissented. He observed that petitioner “had no

purposeful contacts with the plaintiffs or with Indiana related

to this suit, which arises from acts and events that took place

entirely in the Cayman Islands.” App., infra, !4a. He noted

that petitioner “did not sell products in Indiana, and [petitioner]

had no contacts whatsoever with the [respondents] in Indiana

or anywhere else in the United States.” /d. at 15a. Judge Will

contended that the majority’s “forcing [petitioner] to defend

this case in an Indiana courtroom is far from fair or substantially

just.” Id. at 14a.

Judge Will then discussed the implications of the majority’s

holding. He stated that, under the majority’s reasoning, the

Indiana courts may exercise jurisdiction over “any foreign

hotel, restaurant, museum or other facility or service provider,

which confirms reservations for U.S. travel agents and tour

operators and compensates those travel agents and tour

operators for arranging reservations (a frequent and typical

practice).” App., infra, 16a. That is true even though “all the

acts and events alleged” in the complaint may have “occurred

in Timbuktu, Bali, Japan, Australia, Majorca, Tahiti or where-

have-you.” Jd. Judge Will concluded that “[tJhe kind of global

long-arm jurisdiction which the majority endorses ... both fails

the minimum contacts test and is at odds with the func. mental

due process requirement that jurisdiction comport with ‘fair

play and substantial justice.”” Jd.

The panel denied a petition for rehearing. App., infra, 43a.

REASONS FOR GRANTING THF PETITION

On October 2, 1990, this Court granted certiorari in Car-

nival Cruise Lines, Inc. v. Shute, No. 89-1647 (argued Jan. 15,

1991). In that case, the plaintiff, a citizen of the forum state of

Washington, seeks damages for injuries sustained in a fall on a

cruise ship. The defendant is the Panamanian corporation that

owns and operates the ship. The Panamanian corporation

advertises in the state of Washington, has contractual relation-

ships with Washington travel agents, and holds seminars for

travel agents in Washington. 897 F.2d 377, 379 (9th Cir. 1990).

Under those facts, the Ninth Circuit ruled that the state of

Washington could, consistently with due process, exercise

jurisdiction over the Panamanian corporation. /d. at 380-87.

This Court granted certiorari to review that ruling.

This Court’s decision in Carnival Cruise Lines will likely

govern the outcome of the jurisdictional issue in this case.

Indeed, the Panamanian corporation’s contacts with

Washington are more substantial than petitioner’s contacts with

Indiana. See 897 F.2d at 379. Accordingly, if this Court

reverses the judgment in Carnival Cruise Lines, it will follow

a fortiori that the judgment in this case must be reversed.

Hence, this petition should be held and disposed of in light of

the Court’s decision in Carnival Cruise Lines.

The petition for a writ of certiorari in Carnival Cruise Lines

raises an issue in addition to the due-process question. The

second question is whether a contractual provision requiring suit

to be brought in Florida is enforceable. The Ninth Circuit held

that it was not. 897 F.2d at 389. Thus, this Court could logically

reverse the Ninth Circuit’s judgment without reaching the due-

process question. If that occurs, then the Court should grant

plenary review in this case. The important jurisdictional issue

regarding foreign corporations is necessarily presented by this

petition. And for the reasons given in the petition in Carnival

Cruise Lines, that issue deserves resolution by this Court.

CONCLUSION

The petition for a writ of certiorari shouid be held and

disposed of in light of this Court’s decision in Carnival Cruise

Lines, Inc. vy. Shute, No. 89-1647.

Respectfully submitted,

Brian J. Martin

(Counsel of record)

James A. McDermott

Jan M. Carroll

BARNES & THORNBURG

1313 Merchants Bank Bldg.

11 South Meridian Street

Indianapolis, IN 46204

(317) 638-1313

Attorneys for Petitioner

Humphreys (Cayman) Limited

la

| In the

United States Court of Appeals

Hor the Seventh Circuit

Nos. 88-2495 & 88-2496

DOROTHY A. WILSON and LOUIS P. WILSON,

Plaintiffs-Appellees,

v.

HUMPHREYS (CAYMAN) LIMITED, a corporation, and

HOLIDAY INNS, INC., a corporation,

a

Defendants-Appellants.

On Appeal from the United States Distnct Court

for the Southem District of Indiana, Indianapolis Division.

No. 86-C-197 - Larry J. McKinney, Judge.

ARGUED OCTOBER 31, 1989 - DECIDED OCTOBER 24, 1990

Before BAUER, Chief Judge and RIPPLE, Circuit Judge, and

WILL, Senior District Judge.*

RIPPLE, Circuit Judge. Dorothy and Louis Wilson initiated

this diversity action in 1986. The Wilsons asserted that the two

defendants involved in this appeal, together with a third defen-

dant, were liable to them for damages in connection with a

serious injury suffered by Mrs. Wilson while staying as a guest

” The Honorable Hubert L. Will of the United States District Court

for the Northern District of Illinois, Eastern Division, is sitting by

designation.

in appellant Humphreys’ Hotel. ! Humphreys and Holiday Inns

moved to dismiss the complaint due to lack of subject matter

and personal jurisdiction, and asserted that the forum selected

by the plaintiffs violated the doctrine of forum non conveniens.

The district court denied these motions. Upon application by

the appellants, the district court certified the questions of juris-

diction and forum non conveniens to this court on May 25, 1988

(for Humphreys), and July 7, 1988 (for Holiday Inns). This

court accepted the appeal on July 13, 1988. We now affirm the

judgment of the district court in part and remand for further

consideration.

I

BACKGROUND

Humphreys (Cayman) Limited is incorporated under the laws

of the Cayman Islands. Humphreys is a licensee of appellant

Holiday Inns, Inc. and operates a hotel in the Cayman Islands

under authority of that license. Humphreys maintains a cor-

porate office in Memphis, Tennessee and has operated a reser-

vations office in Miami, Florida. Holiday Inns, Inc. is a

Tennessee corporation and is registered to do business in In-

diana. The record does not reveal the nature or extent of its

activities within the state.

Since 1976, Humphreys has participated in a continuing

commercial relationship with American Trans Air (American)

to provide accommodations for tours run by American to the

Cayman Islands. As pait of this relationship, Humphreys sent

officers to Indianapolis on at least one occasion to meet with

representatives of American. During a trip to Indiana in the

sunwner of 1981, Humphreys’ representatives negotiated a

long-term contract with American by which a certain number

' One of the original defendants, American Trans Air, Inc., moved

for summary judgment, which was granted by the district court on

Apnil 6, 1988. The district court entered final judgment pursuant to

Rule 54(b) of the Federal Rules of Civil Procedure and that por ion of

the case was appealed immediately. This court affirmed the district

court's CONF — the air carrier in Wi/son v. American Trans

Air, Inc., 874 F.2d 386 (7th Cir. 1989).

3a

of rooms at Humphreys’ hotel would be guaranteed at a reduced

rate for American-run tours, with American tour leaders receiv-

ing free accommodations. American frequently has listed trips

to the Cayman Islands in its regular advertising brochures and

has included specific references to Humphreys’ hotel. In addi-

tion, Humphreys advertises extensively in national magazines

directed both at travel agents and potential travellers.

Humphreys printed rate cards and brochures that it sent for

further distribution to American in Indiana and to various travel

agents around the country.

Dorothy and Louis Wilson participated in a tour organized by

American that left Indianapolis International Airport on Oc-

tober 28, 1984. The group stayed at Humphreys’ hotel in the

Cayman Islands. According to Mrs. Wilson’s affidavit, arran-

gements for the trip were made as a result of advertisements for

the tour that appeared in American’s travel bulletin. Arrange-

ments were made with American’s tour subsidiary, Ambas-

sadair, and payment was made to Ambassadair in Indianapolis,

Indiana.

On October 30, 1984, Mrs. Wilson was assaulted by an

intruder in her hotel room. The intruder attempted to rob and

rape Mrs. Wilson, and she suffered serious injuries. She spent

a week in a hospital on the Cayman Islands and then returned

to Indianapolis to be treated at Methodist Hospital.

The complaint contains thirteen counts against the two appel-

lants in this case. The counts charge the appellants with

negligence, breach of express and implied warranties, breach of

contract, and negligent infliction of emotional distress. The

appellants moved to dismiss the complaint on the grounds of

lack of subject matter or personal jurisdiction, and forum non

conveniens. The district court denied these motions, but sub-

sequently certified them for interlocutory appeal pursuant to 28

U.S.C. § 1292(b). We accepted the appeal and now consider

each issue in tum.

4a

Il

ANALYSIS

A. Subject Matter Jurisdiction

Diversity jurisdiction ia this suit is based on 28 U.S.C.

§ 1332(a)(3), which provides for jurisdiction when the suit 1s

between “citizens of different States and in which citizens or

subjects of a foreign state are additional parties.” Humphreys

argues that the district court cannot exercise subject matter

jurisdiction over it because it is a company incorporated | in the

Cayman Islands, and the Cayman Islands is not a “foreign state.”

Humphreys reaches this conclusion by noting that the Cayman

Islands is a dependency of Great Britain and that the United

States does not regard the Cayman Islands as an independent

sovereign. See The World Factbook 1989 at 56.

The power to exercise jurisdiction over a foreign citizen under

28 U.S.C. § 1332 has been referred to as “alienage jurisdiction.”

Sadat v. Mertes, 615 F.2d 1176, 1182 (7th Cir. 1980). This type

of jurisdiction “was intended to provide the federal courts with a

fonn of protective jurisdiction over matters implicating intemna-

tional relations where the national interest was paramount.” /d.

“The dominant considerations which prompted the

provision for such jurisdiction appear to have been:

(1) Failure on the part of individual states to give protec-

tion to foreigners under treaties; . . . [and]

(2) Apprehension of entanglements with other sovereigns

that might ensue from failure to treat the legal controversies

of aliens on a national level.”

Id. (quoting Blair Holdings Corp. v. Rubinstein, 133 F. Supp.

496, 500 (S.D.N.Y. 1955).

Our inquiry therefore must be whether the policies supporting

alienage jurisdiction permit a United States District Caprt to

assume jurisdiction over a citizen of the Cayman Islands.” The

A

~ Corporations are considered citizens of the country in which they

are incorporated. National Steamship Co. v. Tugman, 106 U.S. (16

Otto) 118, 120-21 (1882), Panalpina Welttransport GMBH v.

Geosource, Inc., 764 F.2d 352, 354 (Sth Cir. 1985).

Cayman Islands is a British Dependent Territory.” A citizen

of a British Dependent Territory is a “citizen of the

United Kingdom and Colonies.” British Nationality Act

1981 § SI(3)(ayi). According to an affidavit of a Cayman

Islands attorney submitted by Humphreys, the court system in

the Cayman Islands is patterned after that of Great Britain. In

addition, “[t]he Common Law of England .. . is recognised and

applied by the Courts in all cases where there has not been a

specific local enactment.” Humphreys’ App. at 66. The

Cayman Islands is administered by a governor who Is appointed

by the British monarch. The United Kingdom represents

Caymanian diplomatic interests and is responsible for its

military defense. The World Factbook 1989 at 56.

Several federal courts have determined, although generally

without discussion, that subject matter jurisdiction existed in

suits between citizens of the United States and Cayman Island

corporations. See Bally Export Corp. v. Balicar, Ltd., 804 F.2d

398, 399-400 (7th Cir. 1986); Philan Ins. Ltd. v. Frank B. Hall

& Co.,Inc., 712 F. Supp. 339, 345(S.D.N.Y. 1989), Rolls Royce

(Canada) Ltd. v. Cayman Airways, Ltd, 617 F. Supp. 17, 18

(S.D. Fla. 1985). In addition,‘the Second Circuit concluded that

alienage jurisdiction existed over‘a company incorporated in

Bermuda, also a British Dependent Territory. Netherlands

Shipmortgage Corp. v. Madias, 717 F.2d 731, 735 (2d Cir.

1983); see also British Nationality Act 1981, 31 Halsbury’s

Statutes 172 (4th ed. 1987) (Bermuda identified as a British

Dependent Territory ).

Humphreys relies on one unpublished district court decision

for support of its assertion that alienage jurisdiction does not

apply to this case. St. Germain v. West Bay Leasing, Léd.,

CV-81-3945, order (E.D.N.Y. 1982). That court in fact did

conclude that subject matter jurisdiction was lacking when one

of the parties was a Cayman Islands corporation. The court

relied in part on an earlier decision denying diversity jurisdic-

tion over a business incorporated in Hong Kong, a British

* British Nationality Act 1981, 31 Halsbury’s Statutes 172 (4th ed.

1987).

6a

colony. Windert Watch Co. v. Remex Elecs. Ltd., 468 F. Supp.

1242 (S.D.N.Y. 1979). However, the force of the Windert

decision has been eroded by a more recent case from the same

court. In Tetra Finance (HK) Ltd. v. Shaheen, 584 F. Supp. 847

(S.D.N.Y. 1984), the court noted that corporations should not

be denied access to American courts sumply because of the

status of the country in which they are incorporated. “It would

seem hypertechnical to preclude Hong Kong corporations from

asserting claims in our courts simply because Hong Kong has

not been formally recognized by the United States as a foreign

sovereign in its own right.”” /d. at 848.

We agree with the district court that subject matter jurisdiction

under section 1332 is present. We see no reason to depart from

the weight of authority. Certainly, the exercise of American

judicial authority over the citizens of a British Dependent

Territory implicates this country’s relationship with the United

Kingdom-precisely the raison d’etre for applying alienage juris-

diction. Not applying alienage jurisdiction in this case would

allow “form rather than substance” to govern. Murarka \;

Bachrack Bros., 215 F.2d 547, 552 (2d Cir. 1954) (Harlan, J.).

B. Personal Jurisdiction

In a diversity case, a federal district court has personal juris-

diction over anonresident defendant “only if a court of the state

in which it sits would have such jurisdiction.” Turnock v. Cope,

816 F.2d 332, 334 (7th Cir. 1987). Therefore, review of

* Windert also was a by Judge Kocoras in Creative Dis-

tributors, Ltd. v. Sari Niketan, Inc., Mem. op., 1989 U.S. Dist. LEXIS

10436 at *4 (N.D. Ill. 1989) (finding the reasoning of Tetra Finance

rsuasive), and Judge paonge in Timco Eng'g,Inc.v. Rex & Co., 603

. Supp. 925, 930 n.8 (E.D. Pa. 1985) (same).

In Murarka v. Bachrack Bros., Inc., 215 F.2d 547 (2d Cir. 1954),

the plainuff was a citizen of India who filed his suit while India was

sull a British colony. The defendant claimed that, because India was

not a sovereign nation when the complaint was filed, the court did not

have ee ee ae Then-Judge Harlan determined that the

district court did have jurisdiction, because the United States had

granted de facto recognition of India by accepting an ambassador from

that country. /d. at 552.

5

7a

decisions regarding jurisdiction of a federal court in a diversity

suit requires a two-part inquiry: (1) whether the state statute

allows jurisdiction, and (2) whether the assertion of jurisdiction

complies with constitutional due process standards. See

Heritage House Restaurants, Inc. v. Continental Funding

Group, Inc., 906 F.2d 276, 279 (7th Cir. 1990); John Walker &

Sons, Ltd. v. DeMert & Dougherty, Inc., 821 F.2d 399, 401-02

(7th. Cir. 1987) (Illinois long-arm statute); 4 C. Wright & A.

Miller, Federal Practice and Procedure § 1069 at 347 (1987). In

this case, these twin inquiries collapse into one, because, as this

court has noted, Indiana’s long-arm statute extends personal

jurisdiction to the limit allowed under the due process clause of

the fourteenth amendment. Wallace v. Herron, 778 F.2d 391,

393 (7th Cir. 1985) (and cases cited therein), cert. denied, 475

U.S. 1122 (1986). Accordingly, we shall focus on whether

assertion of jurisdiction in this case violates due process.

Due process requires that the defendant have “minimum

contacts with [the forum] such that the maintenance of the suit

does not offend ‘traditional notions of fair play and substantial

justice.’” International Shoe Co. v. Washington, 326 U.S. 310,

316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463

(1940)); FMC Corp. v. Varonos, 892 F.2d 1308, 1313 (7th Cir.

1990). The minimum contacts must be established by the

purposeful acts of the defendant. Burger King Corp. v.

Rudzewicz, 471 U.S. 462, 475 (1985). Examples of acts that,

depending on the circumstances, might support a determination

of jurisdiction include “designing the product for the market in

the forum State, advertising in the forum State, establishing

channels for providing regular advice to customers in the forum

State, or marketing the product through a distributor who has

agreed to serve as the sales agent in the forum State.” Asahi

Metal Indus. Co. v. Superior Court, 480 U.S. 102, 112 (1987).

There are two types of jurisdiction that can be exercised over

an out-of-state defendant-specific and general. When the

defendant’s activities in the state with respect to the transaction

underlying the litigation serve as the basis for jurisdiction, the

assertion of jurisdiction is said to be “specific.” See Helicop-

teros Nacionales de Columbia v. Hall, 466 U.S. 408, 414 n.8

8a

(1984); Giotis v. Apollo of the Ozarks, Inc., 800 F.2d 660, 666

n.3 (7th Cir. 1986) (discussing difference between general and

specific jurisdiction), cert. denied, 479 U.S. 1092 (1987);

Wallace, 778 F.2d at 393 (same). By contrast, when the

defendant’s overall activity in the state, not simply its actions

with respect to the underlying transaction, are the basis, the

jurisdiction is said to be “general.” See Helicopteros

Nacionales de Colombia, 446 U.S. at 414 n.9.

1. specific jurisdiction over Humphreys

Considering Humphreys first, we shall examine whether the

contacts it had with the state satisfy the assertion of specific

jurisdiction. Jurisdiction based on such contacts comports

with due process only if Humphreys reasonably should have

anticipated being haled into court in Indiana. See Burger King

Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985); World-Wide

Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980); FMC

Corp. v. Varonos, 892 F.2d 1308, 1313 (7th Cir. 1990);

Wallace, 778 F.2d at 393-94. Humphreys must purposefully

have availed itself of the “’privilege of conducting activities’”

in Indiana. Burger King, 471 U.S. at 475 (quoting Hanson v.

Denckla, 357 U.S. 235, 253 (1958)); see also Giotis, 800 F.2d

at 666; Wallace, 778 F.2d at 395.

“Specific jurisdiction turns on a particularized assessment of

the ‘relationship among the defendant, the forum, and the

litigation."” Saylor v. Dyniewski, 836 F.2d 341, 344 (7th Cir.

1988) (quoting Shaffer v. Heitner, 433 U.S. 186, 204 (1977)).

The conduct engaged in by Humphreys in Indiana is certainly

sufficient to satisfy specific jurisdiction. Humphreys advertised

in the state of Indiana, entered into a long-term arrangement

with an Indiana corporation to provide a guaranteed number of

rooms to be used in connection with tour packages that departed

from Indiana, and sent representatives to Indiana to negotiate

the contract. In short, Humphreys established a continuing

® Itis not argued that Humphreys’ business in indiana constitutes “the

kind of continuous and systematic general business contacts,”

Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 416

(1984), necessary for general jurisdiction.

9a

commercial relationship with an Indiana tour company with the

expectation that its service (providing accommodation) would

be purchased by residents of Indiana (and other states). These

contacts convince us that the district court correctly determined

that Humphreys is subject to personal jurisdiction in Indiana.

Humphreys, by its own business conduct, had purposefully

availed itself “of the privilege of conducting activities within

the forum State, thus invoking the benefits and protections of

its laws.” Hanson vy. Denckla, 357 U.S. 235, 253 (1958). It

should have “reasonably anticipate[d] being haled into court

there.” World-Wide Voll.swagen v. Woodson, 444 U.S. at 297;

see Shute v. Carnival Cruise Lines, 897 F.2d 377, 380, 386 (9th

Cir. 1990) (in plaintiff’s personal injury suit, specific jurisdic-

tion over corporation was found where corporation advertised

in forum, sent brochures to forum, solicited business in forum,

and sold tickets on a commission basis through travel agents in

forum) (as amended and refiled); Rainbow Travel Serv., lac. y.

Hilton Hotels Corp., 896 F.2d 1233, 1238 (10th Cir. 1990)

(contacts sufficient to meet due process requirements when

hotel solicited business in forum state, carried out negotiations

there, and sent contracts there for execution); Neiman v. Rudolf

Wolff & Co., 619 F.2d 1189, 1193 (7th Cir.) (personal jurisdic-

tion established where employee of defendant [an English com-

pany] came to forum for a lunch meeting, and meeting

constituted bulk of negotiations that led to formation of contract;

“A defendant’s participation in the state in substantial prelimi-

nary negotiations leading to the contract in issue has been held

a sufficient basis for long-arm jurisdiction.”), cert. denied, 449

U.S. 920 (1980). ’

’ The Neiman court also noted that convenience for the parties is a

factor that is often considered as part of a due process minimum

contacts analysis. In that case, the fact that the defendant was an

English company and that litigation in Illinois might have been incon-

venient was not dispositive, for “it would also be inconvenient for

plaintiff" to sue overseas.” 619 F.2d at 1195 n.8. Because of the

‘purposeful acts” in the forum, the inconvenience did not amount to

denial of due process. /d.

10a

2. general jurisdiction over Holiday Inns

On this record, personal jurisdiction over Holiday Inns must

be based, if at all, on general jurisdiction, because the only

connection Holiday Inns had with the injury was its franchise

arrangement with Humphreys. Jurisdiction based on a party’s

generally affiliating nexus with the state, as previously noted,

does not offend due process when there are “continuous and

systematic general business contacts” of the defendant in the

state. Helicopteros Nacionales de Columbia, 466 U.S. at 416.

“This is a fairly high standard in practice.” Fields v. Sedgwick

Associated Risks Ltd., 796 F.2d 299, 301 (9th Cir. 1986); see

Shute, 897 F.2d at 380-81 (collecting cases). The Wilsons argue

that the Indiana registration act, Indiana Code 23-1-11-6,° is

sufficient to support general jurisdiction. Registering to do

business is a necessary precursor to engaging in business ac-

tivities in the forum state. However, it can not satisfy .. .

standing alone . . . the demands of due process. Such an

interpretation of the Indiana registration statute would render it

constitutionally suspect and, accordingly, we decline to give it

such a reading. Cf. NLRB vy. Catholic Bishops of Chicago, 440

U.S. 490, 500 (1979).

On this record, we cannot determine whether Holiday Inns

had a sufficient level of conduct and activity in Indiana to justify

the characterization “continuous and systematic.” Helicopteros

Nacionales de Colombia, 466 U.S. at 416. Accordingly, we

remand this aspect of the case to the district court for a more

plenary inquiry into the contacts and conduct of Holiday Inns

in Indiana.

C. Forum Non Conveniens

We review under an abuse of discretion standard the district

court’s decision to deny a motion to dismiss for forum non

conveniens. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257

(1981); FMC Corp. v. Varonos, 892 F.2d 1308, 1314 (7th Cir.

1990). As the Supreme Court has instructed,

® This section was —_ in 1986 and superceded by the —

corporations chapter of the Indiana Code, sections 23-1-49-1 to -10.

lla

[|W Jhere the court has considered all relevant public and

private interest factors, and where its balancing of these

factors is reasonable, its decision deserves substantial

deference.

Piper Aircraft Co., 454 U.S. at 257. Furthermore, the district

court is granted “substantial flexibility” in deciding a forum non

conveniens argument. Van Cauwenberghe v. Biard, 486 U.S.

517, 529 (1988).

“There is ordinarily a strong presumption in favor of the

plaintiff’s choice of forum, which may be overcome only when

the private and public interest factors clearly point towards trial

in the alternative forum.” Macedo v. Boeing Co., 693 F.2d 683,

688 (7th Cir. 1982); see Piper Aircraft Co., 454 U.S. at 255;

Koster v. (American) Lumbermens Mutual Casualty, 330 U.S.

518, 524 (1947); Gulf Oil v. Gilbert, 330 U.S. 501, 508 (1947).

“Courts routinely give less weight to a foreign plaintiff’s choice

of forum. Citizens or residents deserve somewhat more

deference than foreign plaintiffs.” Macedo, 693 F.2d at 688:

see Piper Aircraft, 454 U.S. at 256. Nevertheless, the district

court must be able to police misuse, such as actions brought in

a particular forum to harass a party. There is no rigid test upon

which a district court must focus when analyzing a forum non

conveniens argument, instead, as articulated by the Supreme

Court in Gulf Oil Corp. v. Gilbert, there are seygral public and

private interest factors that may be considered.” Private inter-

ests include

the relative ease of access to sources of proof; availability

of compulsory process for attendance of unwilling, and the

cost of obtaining attendance of willing, witnesses; pos-

sibility of view of premises, if view would be appropriate

tothe action; and all other practical problems that make trial

of a case easy, expeditious and inexpensive. There may also

” The Supreme Court never has ruled whether the criteria governing

the forum non conveniens decision are governed by federal or state

law under the rule of Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938).

See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 248 n.13 (1981).

Because the parties appear to agree that federal and Indiana criteria

are the same, we need not decide the matter. Humphreys’ Br. at 24.

12a

be questions as to the enforceability of a judgment if one is

obtained. The court will weigh relative advantages and

obstacies to fair trial.

330 U.S. at 508. Public interests include judicial administra-

tion, trying cases in a forum that has a relation to the litigation,

and having matters of state law decided by a court sitting in that

state. Jd. at 508-09.

In this case, the district court relied exclusively on the reason-

ing found in Lehman v. Humphrey Cayman, Ltd., 713 F.2d 339

(8th Cir. 1983), cert. denied, 464 U.S. 1042 (1984). We recog-

nize, as did the district court, the substantial similarity between

the forum-related factors present in this suit and those present

in the Lehman suit. As is apparent from the case name, Lehman

involves the same Cayman Islands hotel as is involved here.

Similarly, the injury occurred on the Cayman Islands to a United

States resident who responded to a Humphreys’ advertisement

in the United States. The Eighth Circuit evaluated many of the

Gilbert factors. The court first determined that the location of

witnesses in the Cayman Islands did not militate strongly for

applying forum non conveniens, because many of the witnesses

were Holiday Inns employees (thus enabling Humphreys to

obtain their cooperation in travelling to testify), and other modes

of obtaining the evidence-such as admissions and depositicns-

could be used. Lehman, 713 F.2d at 343. The court also

concluded that Iowa and the United States had an interest in the

suit because the injured party was an Iowa resident and had

made the travel arrangements in lowa. /d. at 344. The Eighth

Circuit placed sorne weight on the fact that the procedures for

litigating in the Cayman Islands would disadvantage the plain-

tiff. Attorneys there do not accept work for contingent fee

arrangements; it is likely that the plaintiff could not receive a

jury trial for her injury action; and she would have been requirea

to post a $1,000 bond with the court because she was a foreigner.

Id. at 345-46. Accordingly, the Eighth Circuit determined that

the district court abused its discretion in dismissing the action

on the ground of forum non conveniens. Id. at 347.

We cannot say that the district court abused its discretion in

declining to dismiss the suit. Great weight must be given the

13a

Wilsons’ choice of forum. The inconvenience for Humphreys

of litigating the case in Indiana must be balanced against the

disadvantagequs procedures available in the Cayman Islands for

the Wilsons, ~ the interest of Indiana in providing a remedy for

an injury stemming from a tour booked in Indiana for a group

that left from Indiana, and the hardships that the Wilsons would

encounter in litigating a case at such a great distance from their

home. For these reasons, we conclude that the district court did

not abuse its discretion in denying the forum non conveniens

motion.

Conclusion

For the foregoing reasons, we affirm the orders of the district

court regarding Humphreys, but remand to the district court for

further consideration on whether Holiday Inns has subjected

itself to general jurisdiction in Indiana.

AFFIRMED IN PART AND REMANDED

WILL, Senior District Judge, concurring in part and dissenting

in part. I concur in the remand as to Holiday Inns. I dissent,

however, from the assertion of “specific” jurisdiction over

Humphreys and from the majority's affirmance that Indiana is

a proper forum.

The Wilsons are residents of Illinois. Their trip to the

Caymans was a gift from their son. He planned it and paid for

it. Neither the son nor the Wilsons had any contacts with

Humphreys, in Indiana or anywhere else in the United States.

He booked the trip through American, and there is no evidence

that he waéirfluenced in any way by anything Humphreys said

or did, that he selected Humphreys or even knew that it was to

be the hotel. In fact, the record is clear, as the majority recog-

nizes, that “arrangements for the trip were made as a result of

10 We recognize that, to the extent these disadvantages are grounded

in differences in the substantive law of the Cayman Islands, they may

be given some, but not substantial or conclusive, weight. See Piper

Aircraft Co. v. Reyno, 454 U.S. 235, 247 (1981); Macedo y. Boeing

Co., 693 F.2d 683, 688 (7th Cir. 1982).

l4a

advertisements for the tour that appeared in American’s travel

bulletin. Arrangements were made with American’s tour sub-

sidiary, Ambassadair, and payment was made to Ambassadair

.... Majority op. at 3.

I. Personal Jurisdiction

Jurisdiction over an unwilling, non-resident defendant con-

forms to the requirements of due process only if the

“defendant’s conduct and connection with the forum State are

such that he should reasonably anticipate being haled into court

there.” World-Wide Volkswagen Corp. v. Woodson, 444 US.

286, 297 (1980). A defendant who has “purposefully estab-

lished ‘minimum contacts’ in the forum State” has unpliedly

submitted to jurisdiction in the forum. Burger King Corp. v.

Rudzewicz, 471 U.S. 462, 474 (1985). But merely “‘random,’

‘fortuitous,’ or ‘attenuated’” contacts with a forum are not

enough. /d. at 475. Further, any “assertion of personal juris-

diction [must] comport with ‘fair play and substantial justice.*”

Id. at 476, quoting /nternational Shoe Co. v. Washington, 326

U.S. 310 (1945). And, finally, in the special case of “specific”

jurisdiction, a defendant’s contacts with the forum serve as a

basis for personal jurisdiction only for suits “arising out of or

related to” those contacts. Helicopteros Nacionales de Colom-

bia v. Hall, 466 U.S. 408, 414 n.8 (1984).

Humphreys here had no purposeful contacts with the plain-

tiffs or with Indiana related to this suit, which arises from

acts and events that took place entirely in the Cayman Is-

lands. Humphreys could not reasonably have anticipated

being haled into court in Indiana, and forcing Humphreys to

defend this ca%e in an Indiana courtroom is far from fair or

substantially just.

Any and all contacts with the Wilsons’ son in Indiana

related to this lawsuit were American’s, not Humphreys’,

and American admittedly did not act as Humphreys’ agent.

American had no authority to confirm reservations and bind

15a

Humphreys and it did not purport to do so. American,had to

suomit all reservations to Humphreys for confirmation.

I can understand how Humphreys could reasonably have

expected to be haled into an Indiana court, state or federal, to

resolve a dispute arising from its contract with American Trans

Air, which contract was negotiated in Indiana, or if it had sold

products in Indiana. But this case arises from a dispute between

Humphreys and the Wilsons, not Humphreys and American.

Humphreys did not sell products in Indiana, and Humphreys

had no contacts whatsoever with the Wilsons in Indiana or

any where else in the United States.

The majority's suggestion that Indiana courts have jurisdic-

tion here because “Humphreys established a continuing com-

mercial relationship with an Indiana tour company with the

expectations inat its services would be purchased by residents

of Indiana (and other states),” majority op. at 9, and

“Humphreys reasonably should have anticipated being haled

into court in Indiana,” id. at 8, strikes me as wholly inconsistent

with the facts as well as the requirements of due process.

Humphreys undoubtedly serves hundreds or even thousands

of U.S. tourist guests each year as the result of reservations made

by American and other U.S. tour operators and travel agencies.

Every U.S. tour organizer or travel agency has innumerable

foreign hotels, bus lines, guide services, etc., with which it

maintains continuing commercial arrangements. It would be

surprising, however, if Humphreys or any other foreign service

' See Fordyce v. Round Hill Developments, Ltd., 585 F.2d 30 (2¢ Cir.

1978) (Jamaican hotel did not subject itself to jurisdiction of New York

courts by contracting with a travel agent, where the travel agent was

an independent contractor which leased rooms from the hotel at its

own risk); Kopolowitz v. Deepdene Hotel & Tennis Club, 464 F. Supp.

677 (S.D.N.Y. 1979) (Bermuda hotel did not submit to jurisdiction of

New York courts by engaging a sales representative to promote the

hotel and handle inquiries and requests for reservations, in New York

and elsewhere in the United States, where the sales representative did

not have the power to confirm reservations). Compare Gelfand v.

Tanner Motors Tours, Ltd., 385 F.2d 116 (2d Cir. 1967) (involving a

nonforum defendant whose agent in New York had power to confirm

reservations).

l6a

provider anticipated that, merely as a result of its contacts with

U.S. travel agents and without more, it might wind up defending

lawsuits brought by its U.S. guests in U.S. courts.

To hold, as the majority does today, that Indiana courts may

properly exercise in personam jurisdiction over Humphreys is

to hold that any foreign hotel, restaurant, museum or other

facility or service provider, which confirms reservations for

U.S. travel agents and tour operators and compensates those

travel agents and tour operators for arranging reservations (a

frequent and typical practice), is subject to the jurisdiction of

U.S. courts and should‘expect to be haled into them to

defend ‘tort suits or any other claims brought by U.S. guests.

This, notwithstanding that the hotel or other service provider

has had no dealings with the guest in any U.S. forum, that there

was no principal/agent relationship between it and the travel

agent or tour operator with whom the guest solely dealt, and

even though all the acts and events alleged in the guest’s

complaint occurred in Timbuktu, Bali, Japan, Australia, Major-

ca, Tahiti or where-have-you, where, in addition, all the wit-

nesses and relevant records are located.

The kind of global long-arm jurisdiction which the majority

endorses, in my opinion, both fails the minimum contacts test

and is at odds with the fundamental due process requirement

that jurisdiction comport with “fair play and substantial justice.”

I believe that compelling Humphreys to litigate in Indiana is

unanticipated, unfair and beyond the bounds of due process. Cf.

Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 114

(1987) (“The unique burdens placed upon one who must defend

oneself in a foreign legal system should have significant weight

in assessing the reasonableness of stretching the long arm of

personal jurisdiction over national borders.”).

II. Forum Non Conveniens

In addition to holding that Indiana’s long-arm statute reaches

Humphreys, the majority also finds, as did the Eighth Circuit,

in Lehman v. Humphrey Cayman, Ltd., 713 F.2d 339 (8th Cir.

1983), that the fact that the hotel and all the witnesses are located

in the Cayman Island, where all the events giving rise to this

17a

case took place, is outweighed by other considerations Such as

_ the allegedly limited availability of contingent fee arrangements

and jury trials in the Cayman Islands, the necessity of a bond,

the plaintiffs prerogative to choose their forum, and the hardship

for the plaintiffs of litigating in the Cayman Islands (where their

alleged cause of action arose). I respectfully disagree.

There are a number of serious problems with trying this case

in Indiana. First, the site of the alleged tort, the defendant, all

the witnesses other than the plaintiffs and all the records are in

the Cayman Islands. The inconvenience to Humphreys far

outweighs any inconvenience to the Wilsons to try the case

where it arose.

Second, Indiana citizens undoubtedly have an interest in a

convenient home forum. And, if due process perniits, Indiana

may have an interest in providing such a forum for its citizens

who choose to litigate there. But it is difficult to conceive of

what real interest either Indiana or its citizens have in this case.

The Wilsons are citizens of ///inois. In Lehman, by contrast, the

plaintiffs were, at least, citizens of the forum state.

Third, while it would undoubtedly be to the Wilsons’ ad-

vantage to try this case under Indiana law (and before an Indiana

jury )-which is, presumably, why they chose to file it there-the

differences the parties have identified between Indiana law and

the law of the Cayman Islands are not in themselves a justifica-

tion either for Indiana courts to assert due process long-arm

jurisdiction or for finding that the balance ot inconvenience in

this case favors an Indiana trial. Both the majority and the

district court have given too much weight to these differences.

“The possibility of a change in substantive law should ordinarily

not be given conclusive or even substantial weight in the forum

non conveniens inquiry.” Piper Aircraft Co. v. Reyno, 454 U.S.

235, 247 (1981) (availability of strict liability in Pennsylvania

but not in Scotland did not, by itself, bar dismissal for forum

non conveniens). See also id. at 252 n.19.

I would note, in addition, that although the Wilsons have

apparently been assuming that in Indiana, local law would

apply, that may or may not be true. Although the majority does

not discuss the issue, it is an important conflict of laws question,

18a

and possibly a difficult one, whether Cayman Islands or Indiana

law should govem at trial. See Piper Aircraft, 454 U.S. at 251

(“The doctrine of forum non conveniens . . . is designed in part

to help courts avoid conducting complex exercises in compara-

tive law.”). The answer to that question, which depends on

Indiana’s choice-of-law rules, may determine not only the ap-

plicable law of liability and the right to a jury but also Mr.

Wilson’s right to sue. If the majority is holding, as it seems to

suggest by referring to trial by jury, not only that Indiana courts

have jurisdiction but also that Indiana substantive law applies,

then I believe the opinion ought not to assume it, but should say

so and explain why.

A fourth problem with allowing this case to proceed in Indiana

is that it is likewise unclear and troubling to me how an Indiana

judgment against Humphreys, should that be the outcome,

would be enforced-an issue which, again, the majority ’s opinion

overlooks. I would certainly hope that Humphreys, desiring to

continue to attract U.S. tourists, would recognize and respond

to any judgment that might be entered against it. But asserting

jurisdiction over and entering judgments against foreign en-

tities, many of whom have no assets in the United States, is at

best a speculative practice.

lil. Conclusion

It is worth noting the probable consequences of the majority’s

decision. Many Americans are frequent foreign travelers. If

U.S. courts have jurisdiction every time an American tourist has

a dispute with a foreign service provider which has an ongoing

contact with an American tour organizer or travel agent, we are

going to see a lot more lawsuits such as this one, and foreign

service providers will likely protect themselves from their in-

creased exposure by charging higher rates and/or insisting on

exculpatory provisions in their contracts with Americans.

I recognize that finding no U.S. jurisdiction in cases like this

might require American travelers like Mrs. Wilson to return to

places where they have had traumatic experiences in order to

19a

pursue remedies for aileged wrongs. Those are not considera-

tions, however, that are relevant to jurisdiction, which can only

be stretched so far as due process allows and has, I believe, been

stretched far too far in this case.

It is undisputed that U.S. tourists traveling voluntarily in

foreign countries are subject to the laws and jurisdiction of the

courts of those countries. Consistent with that principle, the

long-arm jurisdiction of the fifty states cannot be applied global-

ly so as to give U.S. courts specific jurisdiction over foreign

defendants in tort cases arising from events that took place

entirely on foreign soil and are unrelated to the defendants’

contacts with any U.S. forum.

Believing that the bounds of due process have been far ex-

ceeded in this case, I would reverse the finding of jurisdiction

as to Humphreys. I believe, in addition, that denying

Humphreys’ motion for a dismissal for forum non conveniens

constituted an abuse of discretion and would also reverse on that

basis, even if Humphreys’ contacts vith Indiana satisfied due

process. I concur, however, with the majority's conclusions as

to Holiday Inns.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

20a

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA

INDIANAPOLIS DIVISION

DOROTHY A. WILSON and

LOUIE P. WILSON,

Plaintiffs,

v. CAUSE NO. IP 86-197-C

HOLIDAY INNS, INC.,

HUMPHREYS (CAYMAN), LTD.

and AMERICAN TRANS AIR, INC.,

Defendants.

ENTRY

This case now pends before the Court on dispositive motions

filed by the defendants. Humphreys (Cayman) Ltd. and Holiday

Inns, Inc. have filed motions to dismiss the complaint on grounds

of lack of personal jurisdiction and on grounds of forum non

conveniens. Defendant American Trans Air, Inc. has filed a

motion for summary judgment addressed to those aspects of

plaintiffs’ complaint alleging that it has breached a duty to the

plaintiffs.

Plaintiffs in their motion in opposition to the motions of

Humphreys (Cayman) Ltd. and Holidays Inns, Inc. have set out the

facts upon which they rely in their opposition to the defendants’

motions.

The Court for purposes of all pending motions will adopt the

plaintiffs’ statement of the facts as true.

2la

STATEMENT OF FACTS

Humphreys (Cayman) Ltd. is incorporated under the laws of

the Cayman Islands, having its principal place of business in

Georgetown, Grand Cayman, Cayman Islands, British West Indies.

Humphreys maintain a corporate office and U.S. reservations

office in Memphis, Tennessee, where many of its business records

concerning the hotel are maintained, and has maintained a

reservations office in Miami, Florida. Humphreys is a licensee of

Holiday Inns, Inc. under a license agreement dated November 23,

1970, and the motel operated by Humphreys in the Cayman Islands

is operated as a Holiday Inn under that license agreement.

(Verified statement of D. Glynne Owen, filed May 9, 1986;

Holiday Inns’ answers to interrogatories 1 and 2.) Holiday Inns,

Inc. is a Tennessee corporation registered to do business in Indiana.

(Par. 3, Holiday Inns’ answer to Complaint.) Since at least 1976,

Humphreys has entered into arrangements with American Trans

Air (American) to provide accommodations for tours offered by

American. (American’s answer to interrogatory 1.) American is

incorporated under the laws of the State of Indiana, and has its

principle place of business in the State of Indiana. (Par. 5,

American's answer to Complaint.)

Ambassadair Travel Club, Inc., a subsidiary of American (See

Ambassadair Newsletter, September, 1984, General Information)

publishes a monthly newsletter which is distributed to each

member of Ambassadair. The tour by Ambassadair scheduled for

the Cayman Islands at which accommodations were offered at

Humphreys and in which plaintiffs participated was advertised in

the newsletters.

Reservations with Humphreys are made by both telephone and

correspondence between American or Ambassadair in

Indianapolis, Indiana and Humphreys in Memphis, Tennessee.

Payments fer accommodations are sometimes mailed from

Indianapolis to Humphreys’ office in Memphis and sometimes paid

to Humphreys at the hotel. (Richards deposition, pp. 43-48.)

22a

Officers of Humphreys have come to Indianapolis to meet with

representatives of American on several occasions for the purpose

of transacting general business between the parties. Contracts

between American and Humphreys are negotiated periodically,

usually a year in advance. The negotiated contracts, which appear

to be at least partially oral, include negotiated rates, guaranteed

room availability, minimum numbers of guests for Humphreys,

commission rates payable to American or net rates for rooms to be

charged to American, and free accommodations available to

American’s personnel accompanying the tour. (American’s

answer to interrogatory 3; Richards deposition pp. 31-33, 37-40;

Humphreys’ answer to interrogatory 7.) Copies of the monthly

newsletters produced by American in response to plaintiffs’ request

for documents show that since 1978, advertisements for 131 tours

specifically offering accommodations at Humphreys’ Holiday Inn

have been published, and tours to the Cayman Islands are now

offered by American as frequently as two or three times a month

(Richards deposition, p. 40). In addition to including specific

advertisements of Humphreys’ Holiday Inn in the tour listing,

additional advertisements are published in the bulletins for the

Cayman Islands tours which include solicitation of

accommodations at Humphreys’ hotel.

American obtains information for the advertisements of the

Holiday Inn operated by Humphreys from brochures furnished by

Humphreys. While Humphreys has not specifically requested

these advertisements, they are done with Humphreys’ knowledge

and encouragement. (Richards deposition, pp. 41, 55-6;

Humphreys’ answers to interrogatory 4 and 3(b)(il).)

Humphreys advertises and publicizes its hotel through

advertisements in national magazines, such as Travel Agent and

Travel Weekly, Bride’s Magazine and Skin Diver, as well as in

various directories such as the Holiday Inn directory, the Holiday

Travel Index and similar directories. In addition, Humphreys mails

brochures, rate cards and other promotional materials to travel

23a

agents generally, and has mailed such material to American and

Ambassadair, knowing that they would be circulated to

Ambassadair’s membership. Humphreys’ concedes that “‘it is

probable that some or all of these advertisements, listings and

related materials were sent or made available to persons or entities

in Indiana”. (Humphreys’ answer to interrogatory 4.)

Humphreys also advertises in newspapers, some of which,

such as the Chicago Tribune, Humphreys concedes “were probably

seen in Indiana by Indiana subscribers to those newspapers”.

(Humphreys’ answer to interrogatory 4.) Humphreys also

maintains nationwide toll free numbers to be used by residents of

Indiana and other states for the purpose of making reservations.

All of these promotional activities are done purposefully by

Humphreys to obtain business for its hotel. “Through its

advertising and promotionai activities, Humphreys obviously

encourages the intermediaries to place reservations on their own

behalf or un behalf of their clients with Humphreys’ hotel.”

(Humphreys’ answer to interrogatory 3(b)(1i).)

Humphreys’ promotional activities directed to the Indiana

market have certainly been successful. Records produced by

Humphreys include checks issued by Ambassadair between

December 21, 1982 and March 25, 1986, totalling $239,810.76.

The plaintiffs were participants in the American tour to the

Cayman Islands from October 28 through November 4, 1984. The

tour was advertised in the September, 1984 Newsletter. Both the

tour listing and the advertisement for the Cayman Island trip

included references to accommodations at the Holiday Inn.

Plaintiffs’ reservations at Humphreys were made through

American at Indianapolis, plaintiffs paid Ambassadair at

Indianapolis for the accommodations at Humphreys and plaintiffs

embarked on their tour at Indianapolis International Airport.

Dorothy Wilson was attacked in her room at the hotel operated by

Humphreys on the second day after her arrival. After spending a

week in the hospital on the Cayman Islands she returned to

24a

Indianapolis and received additional medical treatment at

Methodist Hospital.

In addition to those facts plaintiffs’ affidavit of October 9,

1986 will be taken as true for the purposes of the pending motions.

That affidavit alleges that the plaintiffs were residents of Hlinois. It

avers further that plaintiffs received an advertisement for a

Cayman Islands tour in the September, 1984, Ambassadair travel

club bulletin. The Wilsons then made arrangements through

Ambassadair to stay at the Holiday Inn in the Cayman Islands

operated under license by Humphreys (Cayman) Ltd. Plaintiffs

urge that American Trans Air, Inc. is a tour operator and as such

owed a duty to its patrons to investigate proposed accommodations

for safety and to warn the plaintiffs of any dangerous conditions

discovered from such an investigation. This duty, according to

plaintiffs, sounds both in tort and contract. The tort duty requires

American to reasonably inspect facilities and warn of any

dangerous conditions that might affect guests. The contract duty

arising under the contract between the tour operator and the patron

gives the defendant airline duties of an innkeeper to the plaintiffs.

There are several cases from across the United States that deal

with the issue of a travel agent's liability for injury to its patrons

while on a tour it sold or arranged. See Annotation, Liabili ity of

Travel Agents for Injuries on Tour, 53 A.L.R. 3d 1310 (1973 and

supplement 1987). These cases generally illustrate a trend refusing

to impose liability on travel agents for injuries to patrons regardless

of the theories advanced by the plaintiffs, the injured patrons.

Plaintiffs rely on exceptions to this general trend.

Plaintiffs cite both Stevenson v. Four Winds Travel, Inc., 462

F.2d 899 (Sth Cir. 1972) and Taylor v, Costa Lines, Inc,, 441

F.Supp. 783 (E.D.Pa. 1977) for the proposition that tour organizers

have a duty to warn tour participants of dangerous conditions they

might encounter during the tour. The Stevenson case recognizes

that under the law of the state of Florida the duty of a travel agency

to warn tour guests of conditions during the tour might arise by

25a

reason of a contractual relationship between the travel agency and

the patron. The terms of that contractual relationship would be

found in representations and statements made to the tour guest in

the brochure prepared by the travel agency. Jn the Stevenson case,

the Four Winds Travel, Inc. brochure contained phrases from

which reasonable individuals could conclude that Four Winds was

accepting responsibility for accidents to its patrons. Four Winds

put in its brochure statements regarding its tour escorts and

directors having been carefully selected and trained, that these

escorts were experienced and indicating the many services these

tour escorts or directors would render to members of their tours.

Reasonable individuals might conclude that the plaintiff in

Stevenson had the right to expect that the defendant would warn

her of any danger involved in a tour.

The Taylor v, Costa Lines, Inc,, supra, case involved the

relationship of an off-ship tour guide to the owners of a cruise ship.

Any liability for defendant cruise ship was contractual and arose

from oral statements and written representations of the cruise ship

einployees. Plaintiffs alleged that defendant made statements

regarding the quality of the tour guides. Reasonable individuals

might conclude on the basis of these representations that plaintiff

should have been warned of dangers.

Plaintiffs direct our attention to the contractual language in the

instant case upon which they rely in arguing that the Airlines owed

them a duty to warn of safety problems at the hotel. The brochure

in the case at hand contains the representations made to the

plaintiffs by the defendant Airline regarding its responsibility. The

pertinent paragraph reads as follows:

“This tour program is planned and operated by American

Trans Air, Inc., 214i South Highschool Road,

Indianapolis, Indiana, 46251, as principle and tour

operator. Ambassadair Travel Club is wholly owned by

Ambassadair Travel Club, Inc., an Indiana corporation

which is a subsidiary of American Trans Aur, Ine.

American Trans Air is responsible for making all

26a

arrangements for transportation, provided that in the

absence of negligence on the part of American Trans Air,

to any assumption of

liability for any personal injury or property damage arising

out of or caused by any negligent act on the part of any

hotel, other air carrier or anyone rendering any of the

services or accommodations being offered in connection

with this public charter.” [Our emphasis. |

There are no other statements or representations in the brochure or

anywhere else allegedly received by the plaintiffs in this case. This

paragraph is the only language relied upon by plaintiffs to estabiish

a duty. This paragraph in the view of this Court rather than

establishing a duty is a clear disclaimer by American of any duty to

plaintiffs in this case once plaintiffs have deplaned. Therefore,

unless this paragraph is ineffective for some public policy reason

the lack of duty of American Trans Air to plaintiffs for the accident

in question is apparent.

Plaintiffs point out that the entire relationship between the

plaintiffs and American Trans Air, Inc. arose out of the contract

between them by which the plaintiffs became members of the tour.

Plaintiffs cite the above quoted portion of the brochure in support

of their own view that American Trans Air, Inc. was a principal

and tour operator. Plaintiffs further cite Requirements Applicable

to Public Charter Operators, 14 C.F.R. 380.32(x)(1987), which

provides in part:

“Contracts between charter operators and charter

participants shall state:...(x) that the charter operator is the

principal and is responsible to participants for all services

and accommodations offered in connection with the

charter...”

Plaintiffs urge that this quotation coupled with the above cited

paragraph from the brochure indicate defendant's affirmative duty

to the plaintiffs.

Defendant, however, points out the remaining portion of the

C.F.R. citation as follows:

27a

“However, the contract may expressly provide that the

charter operator, unless he is negligent, is not responsible

for personal injury or property damage caused by any

direct air carrier, hotel or other supplier of services in

connection with the charter.” Id.

Certainly, the paragraph quoted from the brochure indicates

American Trans Air's recognition of this permissible language and

implements that permissible language in its notice to the patron that

American Trans Air is not responsible for any personal injury or

property damage arising out of or caused by any negligent act on

the part of any hotel.

The case of Connolly v. Samuelson, 671 F.Supp. 1312 (D.Kan.

1987) dealt with many of the same issues as those presently before

the Court. The court therein, after reviewing current trends and

citing cases from across the country, concluded that the majority of

cases refused to impose liability on travel agents for injuries

suffered by tourists while on the tours sold to them by the travel

agencies. The Connolly case additionally dealt with an

exculpatory clause from the defendant Samuelson’s brochure.

That clause, similar to the one contained in the brochure in the

instant case, indicated that the travel agency would “assume no

liability for injury, damage, loss, accident, delay or irregularity...

for any reason whatsoever”. The Connolly court therefore found

against the plaintiff and in favor of the travel agent for two reasons:

1) the travel agent had no duty, and, 2) even if a duty could be

found the exculpatory clause in the brochure would have relieved

the travel agent of discharging that duty. No distinction was made

in the Connolly case between a travel agent and travel agencies.

There seems to be no reason to treat agents and agencies

differently in terms of duty. Applicability of the Connolly case to

the case at bar seems factually compelling.

The case of Lavine v. General Mills, Inc., 519 F.Supp. 332

(N.D. Ga. 1981) also dealt with this same issue. The travel agency

in that case had a similar clause in its brochure showing that they

28a

undertook no warranty or contractual guarantee of plaintiff's safety

on the cruise. The Lavine case cites the case of Raskin v. Ulysses

Lines, Lid., No. Civ. 4275 (HFW)(S.D.N.Y. Sept. 10, 1980) as

support for its finding. In the Raskin case the plaintiff sought to

recover for injuries she suffered while a ship passenger. It appears

that the plaintiff fell and was injured aboard a ship while it was

docked in Rumania. That plaintiff sued the ship’s owner and

operator and also the travel agent who sold her the cruise. The

Raskin court granted summary judgment in favor of the travel

agent, holding that:

“plaintiff's claims of negligence and unseaworthiness

against the travel agent must fail since it did not own,

operate or manage the vessel. With respect to plaintiff's

third cause of action that [the defendant] was negligent in

investigating the ship’s safety, the court stated that [the

defendant] as a travel agency ‘did not stand in a

relationship vis-a-vis plaintiff such as to owe a duty to her

to investigate the safety of the vessel. Defendant agreed to

arrange a tour and supply a ticket to plaintiff. It did not

insure her safety aboard the vessel.’ The [Raskin] court

also disposed of plaintiff's contentions that Sovereign’s

brochure expressly warranted the vessel’s safety and

seaworthiness by ruling that statements that the vessel

meets certain safety standards ‘falls woefully short of

imposing liability upon [the defendant] for a of

express warranty...’ See also rv

Airways Corp., 60 A.B.2d 427, 401 N.Y.S.2d 91 (2d Dept.

1978).” Lavine, 519 F.Supp. at 337.

These latter cases are strikingly similar to the one at hand.

Plainly American Trans Air does not own, operate or manage the

Holiday Inn. American Trans Air does not stand in a relationship

vis-a-vis plaintiff such as to owe her a duty to investigate the safety

of the hotel. Defendant American Trans Air at no time expressly

or contractually warranted plaintiffs’ safety. The tour brochure

expressly provides to the contrary. Defendant American Trans Air,

Inc.’s motion for summary judgment is GRANTED.

29a

For the purposes of the remaining motions to dismiss, the

Court will again treat as true the statement of the facts set out

earlier in this opinion. Holiday Inns, Inc. and Humphreys

(Cayman) Ltd. have both filed motions to dismiss based on lack of

personal jurisdiction on the grounds of forum non conveniens.

Humphreys further has filed a motion to dismiss for lack of subject

matter jurisdiction, which motion the Court will next undertake.

The defendant Humphreys asserts that jurisdiction of the

subject matter is lacking in this case. Humphreys as a corporation

incorporated under the laws of the Cayman Islands, having its

principal place of business in Georgetown, Grand Cayman,

Cayman Islands, British West Indies, is not a foreign state for

purposes of federal diversity jurisdiction says the defendant.

Defendant cites the case of St. Germain v. West Bay Leasing, Lid.,

No.CV-81-3945 (E.D.N.Y. Sept. 28, 1982) for that proposition.

That case does indeed hold that the Cayman Islands is not a

“foreign state” for purposes of diversity. Plaintiffs however cite

the cases of Bally Export Corporation v, Balicar, Ltd., 804 F.2d

398 (7th Cir. 1986); David H, Elliott, Inc. v iliti

Co,, Lid,, 513 F.2d 1176 (6th Cir. 1975); Rolls Royce (Canada),

Lid. v. Cayman Airways, Lid,, 617 F.Supp. 17 (N.D. Fla. 1985);

and Lehman v. Humphrey Cayman, Ltd., F.2d 339 (8th Cir. 1983),

all in opposition to the defendant’s position.

The Bally Export Corporation case indicates that the federal

court’s jurisdiction was based on diversity of citizenship under 28

U.S.C. § 1332. 804 F.2d at 399. The defendant Balicar, Ltd. was a

corporation organized under the laws of Cayman, a part of the

British West Indies, with its principal place of business in

Georgetown, Grand Cayman, British West Indies, just as the

defendant in the instant action. Default judgment had been entered

against defendant Balicar, Lid. and an issue on appeal was the

question of jurisdiction. The case involved personal jurisdiction

rather than subject matter jurisdiction, and does not in fact discuss

subject matter jurisdiction aithough subject matter jurisdiction

30a

under the rules is certainly an issue that can be brought up at any

time. If the Seventh Circuit had felt that it were an issue it

certainly would have raised it.

The Elliott v, Caribbean Utilities Company, Ltd. case from the

Sixth Circuit also dealt with personal jurisdiction rather than

subject matter jurisdiction regarding a Cayman Islands corporation.

Certainly the opportunity there was present to deal with subject

matter jurisdiction and the Court instead accepted subject matter

jurisdiction and exercised personal jurisdiction. The Rolls Royce

v. Cayman Airways case from the Southern District of Florida

specifically held that subject matter jurisdiction was available even

though under the facts of that case a motion to dismiss for forum

non conveniens was granted.

The Lehman v. Humphrey Cayman Ltd. case is strikingly

similar to the case at hand. Therein, the Eighth Circuit found that

the Federal Court of the Northern District of lowa could exercise

personal jurisdiction over Humphrey Cayman, Ltd. in a matter

involving an alleged tort on an Iowa guest at the Grand Caymanian

Holiday Inn. It appears that the only precedent for the defendant's

subject matter jurisdiction position is the St. Germain case

previously cited. The Court finds the cases cited by the plaintiffs

to be more persuasive and follows those precedents rather than the

St. Germain precedent. The Court therefore OVERRULES

defendant Humphreys’ motion to dismiss for lack of subject matter

jurisdiction.

There remains the defendants’ motion to dismiss for lack of

personal jurisdiction. Both defendants Holiday Inns, Inc. and

Humphreys (Cayman) Ltd. assert that the incident in question and

the events surrounding the incident do not confer jurisdiction on

the Southern District of Indiana. It is by now no mystery that the

Indiana long-arm statute, codified as Indiana Trial Rule 4.4 (West

1985) extends personal jurisdiction of the Court sitting in Indiana

including federal courts to the limits permitted under the due

process clause of the Fourteenth Amendment. First National Bank

3la

of Louisville v, Bezema, 569 F.Supp. 818, 819 (S.D. Ind. 1983);

Oddi v. Mariner-Denver, Inc., 461 F.Supp 306, 308 (S.D. Ind.

1978); Wallace vy, Herron, 778 F.2d 391 (7th Cir. 1985). Thus, the

inquiry into the matter is whether the district court could consistent

with due process assert personal jurisdiction over Humphreys and

Holiday Inns.

It is often cited that International Shoe Company v.

Washington, 326 U.S. 310, 316 (1945) holds that due process

requires that the defendant have “certain minimal contacts with

[the forum] such that the maintenance of the suit does not offend

traditional notions of fair play and substantial justice’”. The

Supreme Court has further defined those “minimal contacts” to be

“continuous and systematic... activities” in the forum. Perkins v.

Benguet Consolidated Mining Co., 342 U.S. 437, 444 (1952).

More contemporaneously the Supreme Court stated in Burger King

Corp. v. Rudzewicz, 471 U.S. 462 (1985): ‘The constitutional

touchstone remains whether the defendant purposefully established

"minimum contacts in the forum state’”. Id. at 474. In Worldwide

Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) the Court

held that the defendant’s conduct and connection with the forum

state should be such that the defendant would reasonably anticipate

being subjected to the jurisdiction of the forum court. Id. at 297.

In the case of Asahi Metal Industry Company, Lid, v. Superior

Court of California, 107 S.Ct. 1026 (1987) we find the following

quotation:

“The placement of a product into the stream of commerce

without more is not an act of the defendant purposefully

directed toward the forum State. Additional conduct of the

defendant may indicate an intent or purpose to serve the

market in the forum State, for example, designing the

product for the market in the forum State, advertising in

the forum State, establishing channels for providing

regular advice to customers in the forum State, or

marketing the product through a distributor who has agreed

to serve as a sales agent in the forum State.” Id. at 1033.

32a

We find also in the Asahi case a focus on the contacts of the

defendant with the forum State. ‘The ‘substantial connection’...

between the defendant and the forum state necessary for a finding

of minimum contacts must come about by an action of the

p.” 107

S.Ct. at 1 1033. (Emphasis! in prone i citations omitted. )

The Court is mindful that the plaintiff in this case is not a

resident of the state of Indiana. Plaintiffs’ contacts with the State

are through the defendant America Trans Air, Inc. and its

relationship to the other two defendants. In Keeton v. Hustler

Magazine, Inc., 465 U.S. 770, 779-80 (1984), the Supreme Court

said:

“But we have not to date required a plaintiff to have

‘minimum contacts’ with the forum State before permitiing

that State to assert personal jurisdiction over a non-resident

defendant. On the contrary, we have upheld the assertion

of jurisdiction where such contacts were entirely lacking.

In Perkins v, Benguet Mining Co., 342 U.S. 437 (1952)

none of the parties was a resident of the forum State;

indeed, neither the plaintiff nor the subject matter of his

action had any relation to that State. Jurisdiction was

based solely on the fact that the defendant corporation b- 1

been carrying on in the forum ’a continuous and systematic

but limited part of its general business’. In the instant case

respondent’s activities in the forum State may not be so

substantial as to support jurisdiction or a cause of action

unrelated to those activities. But respondent is carrying on

“part of its general business“ in New Hampshire, and that

is sufficient to support jurisdiction when the cause of

action arises out of the very activity being conducted, in

part, in New Hampshire.” Id. at 438.

Also, the Keeton court stated:

“plaintiff's residence in the forum State is not a separate

requirement and the lack of residence will not defeat

jurisdiction established on the basis of defendant's

contacts”. Id. at 780.

33a

As we deal in this case with both Holiday Inns, Inc. and

Humphreys, Rush v. Savchuk, 444 U.S. 320, 332 (1980), reminds

us that: “The requirements of International Shoe... must be met as

to each defendant over whom a siate court exercises jurisdiction”.

And, finally, in Burger King, the Supreme Court cautions us that:

“Minimum requirements inherent in the concept of ’fair play and

substantial justice’ may defeat the reasonableness of jurisdiction

even if the defendant has purposefully engaged in forum

activities”. 471 U.S. at 477-78.

As we begin our analysis of the particular facts in the instant

case it is then extremely important that we focus on whether the

defendants have been carrying on in the forum a continuous and

systematic part of their general business, intending to serve the

market in the forum state so that the defendant should reasonably

anticipate being hailed into court in Indiana. Both sides cite

authority for their respective positions on jurisdiction. The Court

will turn first to those citations of the defendants.

Defendants cite the case of Oddi v. Mariner-Denver, Inc,, 461

F.Supp. 306 (S.D. Ind. 1978) which involved a suit filed in the

Southern District of Indiana by an Indiana resident alleging she had

_ been injured in a Colorado Holiday Inn. Judge Steckler in that case

examined carefully the facts of the case. The plaintiff alleged that

she was a guest at the Holiday Inn in Denver operated by

Mariner-Denver under a license or franchise agreement with

Holiday Inn of America, Inc. The Court looked closely at the

contacts that the plaintiff had with the defendant while she was in

Indiana. The Court was concerned that the plaintiff claimed that

she chose to stay in this particular Holiday Inn because of

advertising; however, there was no allegation as to where that

advertising took place. The Court took as true the information

contained in the affidavit of the Secretary-Treasurer of defendant

that the corporation did not regularly do or solicit business or

engage in any other persistent course of conduct or derive

34a

substantial revenue or benefit from goods, materials or services

used or rendered in Indiana.

The Oddi court cited a case froia the Middle District of North

Carolina, Bryson v, Northlake Hilton, 407 F.Supp. 73, (M.D.N.C.

1976) which found no personal jurisdiction when a North Carolina

resident had been injured in a Georgia Hilton. The Bryson court

found the Georgia Hilton did benefit from the reputation of Hilton

franchises in North Carolina and was a part of a general network of

motels that solicited business in North Carolina, and made use of

and was part of the reservation service available at Hilton Inn in

North Carolina, and that brochures advertising the Georgia Hilton

were found at the North Carolina Hilton Inn. In any case, the

Bryson court found that that degree of solicitation could hardly be

considered “substantial” as that term is used in long-arm

jurisdiction litigation. Fundamentally, the Oddi case involved no

allegations that the defendant itself did business in Indiana and the

only contact with the State of Indiana was that the defendant rented

a room to an Indiana citizen.

Defendant also cites the case of Eric Carlsen v. Humphreys

(Cayman) Lid, and Holiday Inns, Inc,, a memorandum order of the

United States District Court for the District of Minnesota, Cause

No. 3-87 CIV 45. That case involved a plaintiff in the Cayman

Islands on a college program staying at an inn other than the

Holiday Inn wherein the allegedly tortious incident occurred

evidently on the Holiday Inns’ property. That court specifically

noted that the plaintiff did not contend that he had made any

arrangements with or contacted any representatives of these

defendants in Minnesota while he was a resident of Minnesota in

regard to his trip to the Cayman Islands prior to his departure. The

plaintiff in that case instead relied for minimal contacts on the

defendants’ general advertisements and solicitations within the

State of Minnesota. While those advertisements and solicitations

did not come to his personal attention he said that he had a general

awareness of the defendants’ hospitality and that he gravitated

or |

35a

toward the defendants’ property in the Cayman Islands as a result

of his awareness. He was in fact not actually aware of the Holiday

Inns’ presence on the Cayman Islands until he arrived there. The

Minnesota court denied jurisdiction, not surprisingly.

Defendants further cite the case of Szakacs v. Anheuser-Busch

Companies, Inc,, 644 F.Supp. 1121 (N.D. Ind. 1986). That case

involved an Indiana resident who tripped and fell on an alleged

dangerous and defective sidewalk at Busch Gardens in Tampa,

Florida. The court in that case was concerned that defendant

Anheuser-Busch conducted an advertising campaign in Indiana as

well as other states promoting Busch Gardens generally and that

the plaintiffs were aware of Busch Gardens due to that general

advertisement on the part of the defendant, but “‘no reservations or

contacts were made with Busch Gardens prior to the vacation trip”.

Id. at 1122. The Court therein cited the Supreme Court case of

Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408

(1984) for the proposition that: “Even when the cause of action

does not arise out of or relate to the foreign corporation’s activities

in the forum State, due process is not offended by a State’s

subjecting the corporation to its in personam jurisdiction where

there are sufficient contacts between the State and the foreign

corporation”. 466 U.S. at 414. In addition, the Northern District

cited Helicopteros Nacionales for having:

“distinguished ‘specific jurisdiction’ where the defendant's

conduct creates the cause of action and confers jurisdiction

on the forum State from ‘general jurisdiction’ where

personal jurisdiction is conferred upon the forum State due

to the defendant's general coniacts with the State rather

than the conduct which created the cause of action”.

Szakacs, 644 F.Supp. at 1125.

The Northern District pointed out that the conduct within the State

upon which the plaintiff was relying for minimal contacts was an

advertising campaign. The court further observed that the

plaintiff's cause of action didn’t arise out of the advertising

36a

campaign. The court concluded that in order to find the requisite

general jurisdiction over the defendants, the defendants would had

to have knowingly solicited the business of the plaintiffs with more

than just a general advertising campaign. It was noted that the

plaintiffs did not allege any forum State contractual agreement with

the defendants. For those reasons the court found no jurisdiction in

the Northern District of Indiana.

It is fair to conclude from a review of all the cases cited by

both parties thai in an instance in which a forum plaintiff is injured

on a non-forum premises by the alleged negligence of a non-forum

defendant, minimum contacts means more than a general

advertising campaign on the part of the non-forum defendant in the

forum state. What more contacts with Indiana did the defendants

in this cause have than general advertising? Humphreys had, as

recited in the facts, an ongoing beneficial relationship with a forum

travel club. Its representatives came tc Indiana on occasion to

negotiate business with the Indiana travel club. Reservations were

made in Indiana. Extensive advertisement of more than just the

national magazine and high circulation newspaper variety is

present. Specifically, forum directed advertisement in a forum

based newsletter is present.

While general advertising alone has never been held by itself

to establish the minimal contacts requirement for personal

jurisdiction, there are several cases reported that examine

advertising as it might reflect the concern of the Supreme Court in

Asahi, supra, that courts look for an “intent or purpose to serve the

market in the forum State”. Asahi, at 1033. Hutter Northern Trust

vy. Door County Chamber of Commerce, 403 F.2d 481, 485 (7th

Cir. 1968) is a pre-Asahi case wherein it was recognized that the

transaction of business through active and regionally pointed

solicitation by the non-forum defendant in the forum State

provided the requisite minimal contacts. Therein a Wisconsin

County Chamber of Commerce was found to have devoted a

“substantial share of its energy” to forum solicitation. The court

37a

found that 90% of the defendant’s business was derived from the

forum tourists. The court found that “the Chamber has

purposefully availed itself the privilege of conducting activities

within [the forum] and thereby invoked the benefit of its laws”.

Gavigan v, Walt Disney World, Inc,, 646 F.Supp. 786 (E.D.

Pa. 1986) examines the minimal contact vis-a-vis advertising

circumstance. The court retained jurisdiction over Disney World

examining closely the nature of the adveriising used by Disney

World directed to citizens of Pennsylvania, the forum State. The

court found extensive in-forum solicitation from “Walt Disney

World Days at Jon Wanamaker” to a “Disney Salutes

Philadelphia” to giving the mayor of Philade!phia an honorary

Disney World citizenship. These specifically forum aimed

promotional marketing advertising activities were found sufficient

to give a Pennsylvania court jurisdiction over a controversy

between a forum plaintiff and a non-forum defendant involving a

non-forum tort. The Gavigan Court distinguished local precedents

on precisely these grounds. See Gavigan, 656 F.Supp. 786,

distinguishing Gehling v. St. George’s School of Medicine, Ltd.,

773 F.2d 539 (3d Cir. 1985); Slota v. The Moorings, 343 Pa.

Super. 96 at 108, 494 A.2d 1 at 6 (1985) and Whalen v. Walt

Disney World, Inc., 274 Pa. Super. 246, 418 A.2d 389 (1980).

A similar case voicing similar concerns is Makopoulos v, Walt

Disney World, Inc., et. al,, 221 NJ. Super. 513, 535 A.2d 26

(1987). Therein, the New Jersey plaintiff tried to assert in

personam jurisdiction over the non-forum defendant in the matter

of an alleged non-forum tort. The court concerned itself with the

nature of defendant’s advertisements as minimal contacts. That

court opined: “It is difficult to perceive a distinction between the

drummer of earlier days whose presence at the front door created

jurisdiction and ithe modern television campaign which seeks the

same end and comes into the home to do it”. Id. at 27. Further the

court said: “Thus it may well be that advertising, and particularly

television advertising, can create sufficient contacts to justify in

38a

personam jurisdiction”. Id. at 28. The court sent the case back to

the lower court to develop the facts with this thought: “Sufficient

facts are suggested which if properly developed might permit a

conclusion that defendant purposely directed his solicitation to

residents of this forum, see Burger King Corp. v, Rudzewicz,

supra, 471 U.S. at 472-73, 105 S.Ct. at 2182-83, and could

reasonably expect to be "haled into court’ here. See World-Wide

Volkswagen Corp. v. Woodson, supra, 444 U.S. at 297, 100 S.Ct.

at 567.” Makopoulos, 535 A.2d at 28-29.

The instant case involves more than general advertising. It

involves some presence in Indiana of Caymanian representatives to

negotiate with the airlines. In Wisconsin Electric Manufacturing

Co., Inc. v, Pennant Products, 619 F.2d 676 (1980) the court found

the presence in the forum State of the non-forum representatives on

two occasions dealing with significant matters out of which the

controversy arose to supply the requisite minimal contacts. As

characterized by Madison Consulting Group v, State of South

Carolina “the mere existence of ’a footfall on the State’s soil’” is

not sufficient in and of itself to establish minimal contacts. 752

F.2d 1193, 1200 (7th Cir. 1985)(quoting Erlanger Mills, Inc, v.

Cohoes Fibre Mills, Inc., 239 F.2d 502, 509 (4th Cir. 1956). Yet in

an area of the law wherein the courts are left in the words of Judge

Learmed Hand to “step from tuft to tuft across the morass” 1/, a

footfail on the forum tuft might support the judicial leap of faith

across the morass.

Plaintiffs cite the case of Lehman v. Humphrey Cayman Lid,

713 F.2d 339, and lay stress on the finding of the Eighth Circuit

Court of Appeals in that case. Quoting directly from the case

regarding the facts:

“Lehman’s action stems from the presumed death of her

husband Robert Wayne Lehman while he was a guest at

1/As quoted by Judge Steckler in Oddi v, Mariner-Denver, Inc.,

supra.

39a

the Grand Caymanian Holiday Inn in the Cayman Islands.

Victoria Lehman is a citizen of the State of lowa, as was

Robert Lehman before his death. Humphrey Cayman Ltd.

is a corporation organized under the laws of the Cayman

Islands and maintains corporate offices in Tennessee.

Humphrey Cayman, Ltd. owns and operates the Grand

Caymanian Holiday Inn and is a franchisee of Holiday

Inns. Holiday Inns is a Tennessee corporation and

maintains a registered agent in lowa. Robert Lehman and

his son were guests of the Grand Caymanian Holiday Inn

for several days in November of 1980. On November 21st

Robert Lehman rented a 16 foot "Hobie-Cat’ sailboat from

a sailboat rental shop, Bob Serto’s Diving Ltd., located on

the hotel premises. Robert and two other persons set sail

on the Caribbean Sea. Several hours later observers

informed the manager of the sailboat rental shop that

Robert Lehman's sailboat was not visible from the shore,

an air search was launched, searchers eventually

discovered only the wreckage of the sailboat; Lehman and

his two companions are presumed dead.” 713 F.2d at 340.

The District Court in that case had held that it had exercised

personal jurisdiction over the defendants, but it granted the

defendant's motion to dismiss for forum non conveniens. The

Circuit Court made specific findings in this case that deal with a

personal jurisdiction issue in any case:

“In this case, Robert Lehman was not doing business

abroad on a daily basis but instead was pursuing a personal

vacation of a few days’ duration in a vacation spot located

just outside the United States. In arranging his vacation

he dealt with an American corporation and relied on the

defendants’ representations received by him in Iowa. The

defendants, on the other hand, actively solicited business in

the United States, were incorporated or at least maintained

corporate offices here, and fairly could be expected to

anticipate and take into account the cost of defending a

lawsuit brought in a United Stateg forum.” Id. at 347.

The Circuit Court focused on several factors:

“Robert Lehman was a resident of Iowa, the defendants

engaged in a systematic advertising effort to generate

40a

business in Iowa, the representations regarding the hotel

and its facilities were directed at Robert Lehman and his

son in Iowa, and the hotel reservations were made through

a travel agency in Iowa.” Id. at 344.

The court in a footnote also recognized that the District Court had

determined in deciding to exercise personal jurisdiction that “it is

quite likely that Lehman and his son would never have chosen the

Grand Caymanian if Cayman had not engaged in a systematic

effort to generate business in Iowa”. Id., n.3.

In the cases cited by the defendant in this case no such contacts

have been present in the forum Siate. In Szakacs the only contact

was a general advertisement campaign. In Oddi the only contact

was the plaintiff herself. in Bryson the only contacts were general

advertising and a brochure left in each Hilton advertising other

Hiltons. In Carlsen only general advertisement was alleged. The

instant case is certainly far closer to the Lehman case. Here the

advertisement was fairly specific to members of the Ambassadair

Club, an Indiana based group. The nature of the advertising was

extensive and forum specific for the use of an Indiana based travel

club and to its members, one of whom, of course, was the plaintiff.

Certainly plaintiffs in this case would not have been at the Grand

Caymanian Hotel had it not been for the Grand Caymanian’s

associations with an Indiana travel club. In addition, plaintiffs

having made reservations in Indiana, defendants having been in

Indiana on several occasions negotiating rates with the tour club,

and a substantial benefit being derived from the forum by the —

defendant are all important considerations in finding minimal

contacts. It seems to the Court that these taken together indicate an

intent to serve the Indiana market. It seems reasonable for

Humphreys (Cayman) Ltd. to be “haled” into Indiana.

It is this Court’s opinion that Lehman v, Humphreys Cayman,

Lid, 713 F.2d 339, is controlling in the case at bar, re Holiday

Inns. The facts are extremely similar, the defendants are the same,

the contacts with the forum are similar, the only difference being

4la

that the plaintiffs in the instant case are not residents of the forum.

However, after the analysis of the Supreme Court in Keeton v.

Hustler Magazine it is clear that the plaintiffs’ residence is not the

focus. And not only is the Lehman case dispositive of the motion

regarding personal jurisdiction, re Holiday Inns, but it seems to the

Court is also dispositive on the issue of forum non conveniens.

The interests discussed by the Lehman court are the same.

Therefore, the motions of the defendants Humphreys

(Cayman) Ltd. and Holiday Inns, Inc. to dismiss are

OVERRULED pursuant to Lehman v. Humphrey Cayman, Ltd.

and Holiday Inns, Inc,, 713 F.2d 339 (8th Cir. 1983) cert. denied

464 U.S. 1042, 104 S.Ct. 708, 79 L.Ed.2d 172 (1984).

DATED this 25th day of March, 1988.

LARRY J. McKINNEY, JUDGE

United States District Court

Southern District of Indiana

42a

Distribution io:

Alfred H. Kreckman, Jr.

MASSEY ANDERSON & GIBSON

908 North Main Street

P.O. Box 1030

Paris, Illinois 61944

Phillip A. Terry

McHALE COOK & WELCH

_1100 Chamber of Commerce Building

Indianapolis, Indiana 46204

Steven E. Springer

KIGHTLINGER & GRAY

660 Market Square Center

Indianapolis, Indiana 46204

James A. McDermott

BARNES & THORNBURG

1313 Merchants Bank Building

Indianapolis, Indiana 46204

Theodore J. Nowacki

BOSE McKINNEY & EVANS

1100 First Indiana Building

Indianapolis, Indiana 46204

43a

United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

November 21 ,/990.

Before

Hon. WILLIAM J. BAUER, Chief Judge

Hon. KENNETH F. RIPPLE, Circuit Judge

Hon. HUBERT L. WILL, Senior District Judge*

DOROTHY A. WILSON and

LOUIS P. WILSON,

Plaintiffs-Appellees,

Appeal from the United

States District Court,

Southern District of

Indiana, Indianapolis

Nos. 88-2495 and 88-2496 v.) Division.

HUMPHREYS (CAYMAN) LTD.,

a corporation, and No. 86C 197. |

HOLIDAY INNS, INC., a corporation. Larry J. McKinney,

A

Defendants-Appellants. Judge.

ORDER

On consideration of the petition for rehearing filed by

defendant-appellant Humphreys (Cayman) Ltd. on November 6,

1990, a majority of the judges on the original panel have voted to deny

the petition. Accordingly,

IT IS ORDERED that the petition for rehearing be, and the same

is hereby, DENIED.

* Judge Will, Senior District Judge, Northern District of Illinois,

sitting by designation.