Opposition Brief — Jensen v. Gates Learjet Corp.

OE" LVIIVY

Ofc. Soprene Court US.)

FILED

APR 4 1985

ALEXANDER Lt. STEVAS.

CLERK

Supreme Court of the United States

Ocroser TERM, 1984

JAMES B. JENSEN, JR.; RICARDO S. TOMACRUZ;

LEARJET PHILIPPINES, INC., a corporation;

JAMES B. JENSEN & CO., INC., a corporation and

HAMIX INTERNATIONAL, LTD., a corporation,

Petitioners,

v.

GATES LEARJET CORPORATION and

GATES LEARJET EXPORT CORPORATION,

Respondents.

ON PETITION FOR A WRIT OF

CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

RESPONDENTS’ BRIEF IN OPPOSITION

MICHAEL J. Rusinc

Wr1aM H. TInNEy

P. O. Box 871

Tucson, Arizona 85702

(602) 792-4800

Attorneys for Respondents

Of Counsel:

BILBY & SHOENHAIR, P.c.,

BEST AVAILABLE COPY

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RULE 28.1 DISCLOSURE

Gates Corporation is the parent

company of Gates Learjet Corporation and

owns in excess of 50% of the outstanding

common stock of Gates Learjet Corporation.

Gates Learjet Export Corporation is a

wholly owned subsidiary of Gates Learjet

Corporation.

i

TABLE OF CONTENTS

Page

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I WEE RU I i iin ee leis cescancrotave 2

I i cccscnsnncininnpaarbiananssancamtsnsninencs 2

Reasons why the writ should be denied ...................... 7

I. There are no special or important

reasons for granting review on the

I ir IN sine csese lassie ccicctssnienrianinnnonnses 7

II. The decision of the Ninth Circuit

RN sa cash hhc cintcicip nase tania caasaekictlindicanbanaeciies 11

pb PES ELI SAT PL LT LTE RAEN ALTE 18

Certificate of filing and service ................2.0..0020.0.000-- 20

ii

TABLE OF AUTHORITIES

Page

CASES

Burke v. Musarra, 46 Misc.2d 933,

261 N.Y.S.2d 314 (195) cccccsccccccccesesseeeeseseeesesteeee 14

Calder v. Jones, U.S. ____ 79 L.Ed.2d

804, 104 S.Ct. 1482 (1984) occ ecceeccccecceeeeeeee 14

Freides v. Sani-Mode Manufacturing Co.,

33 Ill.2d 291, 211 NE 296 (1965) 2.00022. 14

Gulf Oil v. Gilbert, 330 U.S. 501, 67 S.Ct. 839,

G1 L.Ed. MK (ES 16

Helicopteros Nacionales de Columbia v. Hall,

pao, FS , 80 L.Ed.2d 404, 104 S.Ct.

10068 (1GM4) ......c eee 8, 9, 10, 15, 19

Keeton v. Hustler Magazine, Inc.,

avcsnsiae SN , 79 L.Ed.2d 790, 104 S.Ct.

1678 (1008) nl 9, 10

La Seguridad v. Transytur Line, 707 F.2d

104 (1th Cie OS a. 16

Manu International, S.A. v. Avon Products, Inc.,

641 F.2d 62 (2nd Cir. 1981) eee 16

Mead Johnson & Co. v. Baby's Formula |

Service, Inc., 402 F.2d 19, (5th Cir. 1968) _........... 14

Piper Aircraft Co. v. Reyno, 454 U.S. 235, 70

L.Ed.2d 419, 102 S.Ct. 252 (1981) 0.20... 16

Powder Horn Nursery, Inc. v. Soil and Plant

Laboratory, Inc., 20 Ariz. App. 517, 514

Pod 20 (098) ic 13

TABLE OF AUTHORITIES (Continued)

Page

CASES

Russ v. Savchuk, 444 U.S. 320, 62 L.Ed.2d

TG Ra 13

Solo Cup Company v. Paper Machinery Corp.,

gS | 14

Steak & Brew, Inc. v. Makins, 177 U.S.P.Q. 412

Neen ec cvcusnssisansnsenconinanedananiness 14

STATUTES

aiid i cccncasineantrsivesnnuastnndansesnsonsuecnaniioses 2

No.

IN THE

Supreme Court of the United States

OctToBER TERM, 1984

JAMES B. JENSEN, JR.; RICARDO S. TOMACRUZ;

LEARJET PHILIPPINES, INC., a corporation;

JAMES B. JENSEN & CO., INC., a corporation and

HAMIX INTERNATIONAL, LTD., a corporation,

Petitioners,

V.

GATES LEARJET CORPORATION and

GATES LEARJET EXPORT CORPORATION,

Respondents.

ON PETITION FORA WRIT OF

CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

RESPONDENTS’ BRIEF IN OPPOSITION

Respondents, Gates Learjet Corporation and Gates

Learjet Export Corporation, respectfully request that

this Court deny the Petition for Writ of Certiorari, seek-

ing review of the Ninth Circuit's opinion in this case.

That opinion is reported at 743 F.2d 1825 and is attached

hereto as Appendix A.

PARTIES

Petitioners’ statement of the parties to the proceed-

ing in the Ninth Circuit Court of Appeals is incorrect.

However, the caption of the case in this Court contains

the names of all such parties.

2

JURISDICTION OF THIS COURT

Contrary to Petitioners’ statement as to this Court's

jurisdiction to review the decision of the Ninth Circuit

Court of Appeals, jurisdiction in such circumstances is

governed by 28 U.S.C. § 1254.

STATEMENT OF THE CASE

Gates Learjet Corporation is the manufacturer of

executive aircraft known as Learjets. Gates Learjet Ex-

port Corporation is a wholly owned subsidiary engaged

in international marketing. They will be referred to

collectively as “Gates”. A large part of the production,

administration and distribution occurs in Tucson,

Arizona.

James B. Jensen, Jr. (“Jensen”) is a United States

citizen with residence in California and the Philippines.

Ricardo S. Tomacruz (“Tomacruz’) is a citizen and

resident of the Philippines. Learjet Philippines, Inc.

(“LPI”) is a Philippine corporation. James B. Jensen

& Co., Inc. (“Jensen Inc.”) is a California corporation

whose principal place of business is San Francisco,

California. Hamix International, Ltd. (“Hamix”) is a

non-resident foreign corporation whose principal place

of business is Hong Kong, British Crown Colony. There

is substantial evidence that the corporations are mere

conduits/alter egos for each other and Jensen and Toma-

cruz. Respondents’ Appendix B. See also, Petitioners’

Appendix 5.

Jensen is the President of both Jensen, Inc. and LPI.

In February of 1978, Jensen travelled to Tucson, Arizona

to be on hand when a purchaser accepted delivery of a

jet manufactured by Gates. During this visit, Jensen

3

solicited from Gates the opportunity to become the

Learjet distributor in the Republic of the Philippines.

Negotiations with regard to this International Distribu-

torship Agreement occurred while Jensen was in Tucson,

Arizona, and by telephone, correspondence, and telex

from Tucson to San Francisco and Manila.

An International Distributorship Agreement was

ultimately entered into between Gates and LPI. This

Agreement provides that:

“It is expressly agreed and understood that this

Agreement is an Arizona agreement and that it shall

be governed by the laws of the State of Arizona of

the United States of America in all matters, includ-

ing, but not limited to, validity, obligation, inter-

pretation, construction, performance and termina-

tion.”

The first Agreement was entered into in 1978 for a

period of one year or a part thereof, and was in fact

renewed for two additional years and finally extended

by letter agreement for a period of an additional four

months.

During the terms of the Agreements, Jensen and

Tomacruz made numerous trips to Arizona on behalf

of LPI. Jensen came to Tucson at least seven times be-

tween February of 1978 and September of 1981.

Among the other contacts, Jensen attended and par-

ticipated in Gates’ annual distributor conferences held

in Tucson in 1978, 1979 and 1980. On various other

occasions during 1978, 1979 and 1980, Jensen dealt with

various Gates personnel at Gates’ marketing headquar-

ters and the manufacturing plants located at the Tucson

International Airport in Tucson, Arizona. These dealings

4

were for the purpose of negotiating the purchase of

Learjet aircraft, for the purpose of accepting delivery

of such aircraft, or for the purpose of negotiating terms

and conditions under which Jensen and his company

would continue to serve as a Gates Learjet distributor.

During the term of the Agreement, LPI and its

principals, Jensen and Tomacruz, entered into numerous

Airplane Purchase Agreements with Gates in Tucson.

Each of these Airplane Purchase Agreements contains

a provision stating that:

“This Agreement shall be construed in accordance

with and its performance shall be governed by the

laws of the State of Arizona. The courts of Arizona

shall have exclusive jurisdiction to hear and deter-

mine all claims, disputes, actions or suits which may

arise hereunder.”

Delivery of these airplanes occurred in Tucson, Arizona,

with Jensen and/or Tomacruz in attendance.

LPI, Jensen and Tomacruz purchased quantities of

spare parts from Gates. These purchases totalled over

$200,000.00 for 1980 and 1981 combined.

Additionally, numerous letters, telexes and tele-

phone calls went back and forth between Gates in

Tucson and LPI, Jensen and Tomacruz in the Philip-

pines and/or San Francisco.

Gates changed emphasis with its distributors from

quota sales to service in 1981, after first so advising all

distributors in September of 1980 at an Executive Busi-

ness Jet national convention.

5

LPI, as well as all other distributors, was advised to

create and maintain service capability. LPI, contrary

to requests, never obtained its own hangar, mechanics

or tools in its area of distributorship (Manila).

In June, July and August of 1981, written communi-

cations and discussions in Tucson took place between

Gates and LPI. LPI adopted the position that its bor-

rowed hangar space, borrowed tools and borrowed me-

chanics enabled it to provide adequate service. In Sep-

tember of 1981, Gates made a tentative decision not

to renew LPI’s Distributorship Agreement. This decision

was finalized on October 15, 1981, by letter to LPI. LPI

was one of several distributors not to have its distributor-

ship renewed in 1981.

On October 29, 1981, Gates sent a potential Philip-

pines customer a letter saying Gates would have a dem-

onstration of an executive business jet in Manila, Philip-

pines, in November of 1981.

Gates sent a Learjet to Manila on November 28,

1981, with its far eastern sales representative and two

pilots. LPI, upon learning of the demonstration, caused

a criminal complaint to be filed against Gates’ repre-

sentative for not having a Philippine business license.

As a result, the sales zepresentative was arrested and the

jet impounded. As Gates was having the sales repre-

sentative freed and jet released, LPI filed a lawsuit

which further detained the employee and the aircraft.

Gates obtained the release of its far eastern representa-

tative on Christmas Eve, 1981.

LPI continued to use the tradename and trade-

mark of Learjet after notice of non-renewal of their

6

distributorship. The Distributorship Agreement forbids

such continued use.

On February 3, 1982, Gates filed a four count com-

plaint in the Pima County Superior Court of the State

of Arizona. Defendants in the complaint are LPI and

related companies and individuals: Jensen, Tomacruz,

Jensen Inc. and Hamix (hereinafter collectively referred

to as “Petitioners” ). Count One of the complaint alleges

unauthorized use of Gates’ tradenames and trademarks

by all of the Defendants, in violation of Distributorship

Agreement, after non-renewal of the Agreement. Count

Two is against Jensen and Tomacruz for abuse of pro-

cess arising out of the seizure by Philippine authorities

of an aircraft owned by Gates and the jailing of the

Gates employee. Count Three alleges that Jensen and

Tomacruz interfered with céntractual relations between

Gates and customers in the Philippines. Count Four al-

leges conspiracy by all Defendants to make unauthorized

use of Gates’ trademark and tradename.

A petition for removal of the action was filed by

Jensen and Jensen Inc. The removal was based upon

diversity of citizenship.

Jensen and Tomacruz answered and later filed an

Amended Counterclaim in six Counts. The Counter-

claim added three new parties to the litigation as

counter-defendants: B. S. Stillwell, Jane Doe Stillwell,

(“Stillwell”) and Stillwell Aviation Australia, Pty., Ltd.

(“Stillwell Aviation’ ).

On June 30, 1982, Jensen Inc. filed a Motion to

Dismiss the complaint for lack of jurisdiction over the

person. On September 23, 1982 the United States District

7

Court (Marquez, J) entered an order denying Jensen

Inc.'s Motion as to Counts One and Four of the com-

plaint and granting the Motion as to Counts Two and

Three.

On April 20, 1983, .the remaining Defendants

moved the court to clarify that Counts Two and Three

were dismissed as to all Defendants because of lack of

jurisdiction over their persons. On May 31, 1983 the

United States District Court “clarified” its order of

September 23, 1982 to reflect that Counts Two and

Three were dismissed as to all parties named in those

Counts. Gates appealed from that ruling.

The second issue on appeal involved the District

Court’s dismissal of Counts One and Four of the com-

plaint under the doctrine of forum non conveniens. Pe-

titioners did not challenge the convenience of the forum

until October 5, 1983, after 18 months of discovery and

trial preparation. Gates filed an Opposition to the Motion

to Dismiss on October 12, 1983. In a “Memorandum of

Decision and Order”, dated November 1, 1983, the Court

dismissed the complaint, subject to certain conditions.

A Notice of Appeal as to both issues was filed on

November 30, 1983. On September 27, 1984, the United

States Court of Appeals, Ninth Circuit, reversed both

of these rulings and remanded the action to the District

Court for further proceedings. On November 27, 1984,

a Petition for Rehearing and Rehearing in Banc was

denied.

REASONS WHY THE WRIT SHOULD BE DENIED

I. There are no special or important reasons for

granting review on the Writ of Certiorari.

8

The decision of the Ninth Circuit presents no unique,

special or important issues with which to deal. There is

no conflict between Federal Courts of Appeals, there

is no important question of federal law, nor is there any

particularly significant issue to be resolved. The opinion

of the Ninth Circuit dealt with two topics: personal

jurisdiction and forum non conveniens dismissals.

As to the former, inquiries into the existence or non-

existence of personal jurisdiction require case by case

determinations which turn on the peculiar facts of each

action. There is nothing special about this case which

would allow this Court to clarify the law in an area,

resolve a conflict, etc.

Contrary to Petitioners’ contention, the case of

Helicopteros Nacionales de Columbia v. Hall, US.

___*, 80 L.Ed.2d 404, 104 S. Ct. 1868 (1984) is not

factually similar to the instant case. Neither does it

“leave unanswered’ a legal question which this case will

allow this Court to resolve. Specifically, Helicopteros

Nacionales is a wrongful death action arising out of a

helicopter crash in Peru brought by the survivors of a

United States citizen against a Columbian corporation.

Substantial and significant factual differences exist be-

tween that case and the case at bar which render them

inapposite. For example, a wrongful death action in-

volves negligence, rather than intentional acts, which

are involved in the present case. Additionally, the action

in Helicopteros Nacionales did not arise out of a forum-

related contract. There was a contract tangentially in-

volved, but it was executed in Columbia not the United

States. Indeed, both parties in the Helicopteros Nacio-

nales case conceded that the action did not arise out of

that contract.

9

Finally, and most importantly, Petitioners misrepre-

sent, and misstate by selective quotes, the “unanswered

question” in the Helicopteros Nacionales case, id. at

fn.10. Petitioners seem to suggest that the Helicopteros

Nacionales case left open the question of whether a

state could exercise “specific jurisdiction” over a defen-

dant in a suit arising out of or related to the defendant's

contacts with the forum. In fact, this Court in Helicop-

teros Nacionales tacitly recognized and accepted such

a status and stated:

“When a controversy is related to or ‘arises out of

a defendant's contacts with the forum, the court

has said that a ‘relationship among the defendant,

the forum, and the litigation’ is the essential founda-

tion of in personam jurisdiction.” Id. at , 80

L.Ed.2d at 411, 104 S. Ct. at 1873, Citing to footnote

8.

Footnote 8 reads:

‘It has been said that when a state exercises per-

sonal jurisdiction over a defendant in a suit aris-

ing out of or related to the defendant’s contacts

with the forum, the state is exercising specific jur-

a over the defendant.” (Citations omitted ).

Id.

Additionally, the general jurisdiction/specific jurisdic-

tion distinction was acknowledged in Keeton v. Hustler

Magazine, Inc., ___. US. , 79 L.Ed.2d 790, 104

S.Ct. 1473 (1984) wherein the Court stated:

“In the instant case, respondent’s activities in the

forum may not be so substantial as to support jur-

isdiction over a cause of action unrelated to those

activities. But respondent is carrying on a ‘part of

its general business’ in New Hampshire, and that

10

is sufficient to support jurisdiction when the cause

of action arises out of the very activity being con-

ducted, in part, in New Hampshire.” Id. at , 79

L.Ed.2d at 801, 104 S.Ct. 1473

The answered question referred to in footnote 10

of Helicopteros Nacionales is not whether there is a dis-

tinction between general and specific jurisdiction, but

rather “whether the terms ‘arising out of and ‘related

to’ describe different connections between a cause of

action and a defendant’s contacts with the forum” for

the purposes of exercising specific jurisdiction. (This

particular section of footnote 10 was deleted by Peti-

tioners and an elipses substituted ). Thus, rather than not

deciding whether specific jurisdiction (or “limited jur-

isdiction” as the Ninth Circuit labels it) exists as a con-

cept, this Court simply left open a sub-issue of that

inquiry. That sub-issue is not raised in the current case.

As to the forum non conveniens issue, the Ninth

Circuit Court of Appeals reversed the District Court's

dismissal of the remaining counts of the complaint,

Counts One and Four. The District Court desired that

these Counts be tried in the Philippines. This ruling also

presents no unique or important matters of law for this

Court to address. If the case goes on to trial in Tucson,

as currently planned, Petitioners will incur no real preju-

dice because there is nothing wrong or unfair about Tuc-

son as a forum. Petitioners have never questioned their

ability to get a fair trial in Tucson, so justice can ulti-

mately be obtained in that location. Additionally, there

is no absolute right to a change of forum for conyenience

sake. Since it is a discretionary matter, Petitioners’ inabil-

ity to obtain a different forum does not impact any of

its “rights”, nor is it violative of due process.

ee ee ra

11

Finally, one of the thrusts of Petitioners argument

regarding forum non conveniens is that the Court of

Appeals did not consider the effect of bringing Counts

Two and Three back into the case when it reviewed the

propriety of the forum non conveniens dismissal of

Counts One and Four. Petitioners contend that, when

the aggregation of all four counts is considered, it is clear

that the Philippines is the more appropriate forum for

the entire case. However, it is not for an Appellate Court

to make that inquiry. The question has never been de-

cided by the District Court and, until it has, appellate

review is premature and improper.

II. The decision of the Ninth Circuit was correct.

A. Arizona has personal jurisdiction over LPI, Jensen

and Tomacruz as to Count Two of the Complaint, and per-

sonal jurisdiction over Jensen and Tomacruz as to Count

Three of the Complaint.

The Ninth Circuit opinion reveals a well reasoned

discussion of the specific facts of this case and a proper

application of the prevailing law on personal jurisdiction

to those facts. The decision of the District Court dis-

missing Counts Two and Three of the complaint on per-

sonal jurisdiction grounds was properly reversed.

Petitioner contends that there is some infirmity with

the opinion of the Court of Appeals because it focuses

only on the forum-related contacts of “Learjet Philip-

pines, Inc. (by and through petitioners Jensen and Toma-

cruz) ... Yet it reversed the dismissal of Counts II and

III as to all defendants.” Writ of Certioriari, page 12.

This argument fails to recognize that Counts Two and

Three only involve LPI, Jensen and Tomacruz (Count

Two is against all three of these parties and Count Three

is only against Jensen and Tomacruz).

12

Contrary to Petitioners’ assertion, there was a ple-

thora of evidence regarding the contacts these parties

had with the forum state of Arizona. A number of these

contacts are enumerated in the Court of Appeals deci-

sion. Petitioners’ outline of their contacts with Arizona

contained at pages 12-14 of the writ is misleading and

inaccurate. For example, as to Jensen, Inc., Petitioners

claim that the only evidence of contact was that Jensen,

Inc. purchased spare parts from Gates in Wichita, Kan-

sas and relayed LPI’s mail through its San Francisco

office. However, it is readily apparent from a review

of the facts that Jensen, on behalf of Jensen, Inc., trans-

acted business in the state of Arizona and that Jensen,

Inc. and LPI were used by Jensen interchangeably with

a total disregard of their separate corporate entities. See

Appendix B. Even the District Court, when it dismissed

Counts Two and Three, spent several pages examining

the forum-related conduct of Jensen, Inc. and concluded

that:

“The distributorship agreement was entered into

only after lengthy and thorough negotiation process,

during which Jensen, Inc., through its presiden:, par-

ticipated fully... . Jensen, Inc. aggressively solic-

ited the distributorship contract, conducting a well-

planned and persuasive promotional campaign to

secure the distributorship from GLC. Defendant,

therefore, ‘purposely availed himself of the priv-

ilege of conducting’ its working relationship with

GLC within Arizona, not only in person, but through

the mail, telephone and wire services.” Petitioners’

Appendix No. 5 at pages 8 and 9.

The District Court in that Order also concluded that

“Jensen, Inc. is an active member in the marketing activ-

ity which is the subject matter of the distributorship

Vile alte n

a ak lida Beng

te

13

agreement.” Id. at page 5. Because Petitioners’ descrip-

tion of forum related activities varies widely from the

facts, it is respectfully requested that this Court rely upon

the jurisdictional facts as outlined in the decision of the

Court of Appeals and in the Statement of Facts contained

herein.

Petitioners also contend that jurisdiction over Jensen

and Tomacruz is based upon the conduct of LPI, and

that such exercise is unfair, citing Russ v. Savchuk, 444

U.S. 320, 62 L.Ed.2d 516, 100 S.Ct. 571 (1980) and

Powder Horn Nursery, Inc. v. Soil and Plant Laboratory,

Inc., 20 Ariz.App. 517, 514 P.2d 270 (1973). However,

these cases are inapposite both factually and legally.

Russ v. Savchuk involved an attempt by a party injured

in an automobile accident to obtain jurisdiction over

the tortfeasor, over whom there was otherwise no per-

sonal jurisdiction, by garnishing the tortfeasor’s insur-

ance company, which did business in the forum. Obvi-

ously, that case has no relevance here. In Powder Horn

Nursery, Inc., the plaintiff was seeking to obtain jurisdic-

tion over corporate employees whose only involvement

was in their capacity as employees of the defendant cor-

poration. The Court noted that there was nothing to indi-

cate that the defendant corporate entity was used as a

sham or in any manner which would justify disregarding

its existence. The Court also observed that none of the

individual defendants had conducted activities in Ari-

zona. In the present case, the individuals are being sued

14

for their actions as individuals', allegations have been

made and evidence produced indicating that the cor-

porate entities are a sham, and the individual Petitioners

themselves conducted activities in Arizona. It should be

noted that this Court recently rejected the suggestion

that corporate employees who act in their official capac-

ity are somehow shielded from suit in their individual

capacity. Calder v. Jones, Us. —., WLEae

804, 104 S.Ct. 1482 (1984). The Petitioners are correct

that their contacts with Arizona are not to be judged

according to their employers’ activities there. “On the

other hand, their status as employees does not somehow

insulate them from jurisdiction.” Id. at , 79 L.Ed.2d

at 813, 104 S.Ct. 1482.

! Petitioners seem to suggest that Jensen and Tomacruz wouid

not be subject to personal liability because they can hide behind

the corporate shields of Jensen, Inc. and LPI. There are two

problems with this argument. The first is that there is an allega-

tion that the corporate form should be disregarded and the

corporate veil should be pierced. Secondly, Jensen and Tomacruz

are officers of Learjet Philippines and Jensen is an officer of

Jensen Inc. Corporate officers are individually liable for torts

which they personally commit and they cannot shield themselves

behind the corporation when they are actual participants in the

tort. Solo Cup Company v. Paper Machinery Corp., 359 F.2d 754,

760 (7th Cir. 1966). The principal applies where the conduct

constitutes unauthorized use of tradenames and trademarks;

Mead Johnson & Co. v. Baby’s Formula Service, Inc., 402 F.2d

19, 23 (5th Cir. 1968); Steak & Brew, Inc. v. Makins, 177 U.S.P.Q.

412 (D. Conn. 1963); or abuse of process/false imprisonment/

malicious prosecution. Burke v. Musarra, 46 Misc.2d 933, 261

N.Y.S.2d 314 (1965); Freides v. Sani-Mode Manufacturing Co.,

33 Ill.2d 291, 211 N.E.2d 296 (1965). Thus, Jensen and Toma-

cruz’s wrongful conduct subjects them to personal liability and,

since they personally have sufficient contact with Arizona, per-

sonal jurisdiction.

rie Ai ke REE Nt

Ns seem eiinterensee dn ie oe

15

Petitioners also question the Court of Appeals’ con-

clusion that the dismissed Counts “arise out of” the

distributorship agreement. The Petitioners particularly

impugn such a decision as to Count Two of the com-

plaint (abuse of process). However, the Court of Ap-

peals examined the complaint in the Philippines upon

which the abuse of process count is based and duly noted

that all three counts of that action seek various damages

as a result of Gates’ non-renewal of the Distributorship

Agreement. Clearer evidence that the abuse of process

arose out of the agreement is hard to imagine.

Petitioners final contention of error with regard to

the Ninth Circuit’s decision on personal jurisdiction is

that a recent case, Helicopteros Nacionales, supra, is sup-

portive of a contrary decision. However, by its explicit

terms, the Helicopteros Nacionc'es decision was limited

to the issue of whether general jurisdiction existed over

the Columbian defendant, it being conceded that spe-

cific or limited jurisdiction did not apply. In the case at

hand, the Court of Appeals ruled in Petitioners’ favor on

the issue of general jurisdiction. Thus, Helicopteros Naci-

onales has no application to this case in its current pos-

ture.

In addition to the numerous forum related contacts,

another aspect of this case which makes exercise of jur-

isdiction particularly reasonable, as the Court of Appeals

noted, is the fact that Petitioners would still have to liti-

gate Counts One and Four of the complaint and their

Six Count Counterclaim. With all those issues remain-

ing, the addition of two more counts is not unduly bur-

densome.

It is clear from the foregoing that the Court of Ap-

16

peals decision with regard to personal jurisdiction was

well reasoned and should stand as a legitimate applica-

tion of the specific facts to the applicable law. Review

is inappropriate.

B. The Court of Appeals properly concluded that the

District Court abused its discretion in granting the forum

non conveniens dismissal.

The Court of Appeals properly applied the abuse of

discretion standard in reversing the District Court. In

establishing the abuse of discretion standard, this Court

noted that:

“[W]here the court has considered all relevant pub-

lic and private interest factors, and where its balanc-

ing of these factors is reasonable, its decision de-

serves substantial deference.”

Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257, 70 L.Ed.2d

419, 436, 102 S.Ct. 252 (1981). Thus, a District Court

abuses its discretion, and is subject to reversal, when it

does not consider all the relevant factors and/or where

its balancing of these factors is unreasonable. La Seguri-

dad v. Transyt Line, 707 F.2d 1304, 1308 (11th Cir.

1983). “Empiasis on the District Court's discretion .. .

must not overshadow the central principle of the Gilbert

doctrine that ‘unless the balance is strongly in favor of

the defendant, the plaintiff's choice of forum should

rarely be disturbed.’ ” Manu International, S.A. v. Avon

Products, Inc., 641 F.2d 62, 65 (2nd Cir. 1981) (quoting

Gulf Oil v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 843,

91 L.Ed 1055, 1062 (1947) ).

In analyzing the District Court’s consideration of

the private interest factors, the Court of Appeals ob-

17

served that the District Court totally failed to examine

at least two important factors. First, the District Court

did not recognize or consider in its balancing that Gates

is a United States citizen and a resident of Arizona. The

second relevant private interest factor that the District

Court failed to examine was that the parties were ready

for trial when the Court dismissed the complaint for

forum non conveniens. A prompt trial of the case in

Arizona would have been more “easy,, expeditious and

inexpensive’ than trial in the Philippines.

In addition to not considering at all the two afore-

mentioned factors, the District Court did not properly

consider and weigh the private interest factor of location

of witnesses. Specifically, the District Court mischar-

acterized where the balance of the witnesses were lo-

cated and incorrectly emphasized the number, rather

than the materiality, of the witnesses.’

As to the public interest factors, the Court of Ap-

peals concluded that the District Court failed to consider

one such factor, was mistaken as to another and unrea-

sonably overemphasized a third. Specifically, the District

Court totally failed to weigh Arizona’s interest in having

the controversy resolved at home. The District Court

also mistakenly concluded that both Philippine and Ari-

zona law would apply to the matter, when in fact only

Arizona law would apply. The only remaining Counts

of the complaint involved unauthorized use of trade-

names and trademarks in violation of the Distributorship

? Petitioners have to this day failed to identify a single Philip-

pine witness who they would like to utilize whose testimony

would be unavailable in Tucson, let alone identify the content,

necessity or materiality of that testimony.

18

Agreement. As previously noted, the Distributorship

Agreement specifically provides that it shall be governed

by Arizona law. Indeed, contrary to their assertion in

their petition, Petitioners conceded that Arizona law

would apply to these Counts. This occurred in Petition-

ers Reply Memorandum Regarding the Motion to Dis-

miss for Forum Non Conveniens at page 4, line 6-8: |

“Defendant/Counterclaimants do not disagree that

Arizona law applies to at least one of the ——

claims (the breach of contract).” Appendix C.

The Court of Appeals also concluded that the Dis-

trict Court overemphasized its own crowded docket in

dismissing the action. The Court of Appeals correctly

observed that it is unreasonable and unfair for a court

to subject a United States corporation to the courts of

another country merely because the plaintiffs home

country's courts are congested.

In conclusion, the Court of Appeals held that the

District Court failed to consider relevant private and

public interest factors and unreasonably misconstrued

others. The District Court therefore abused its discre-

tion and the case was properly reversed and remanded

for further proceedings.

CONCLUSION:

The Court of Appeals for the Ninth Circuit authored

a very well reasoned opinion in a case that is peculiarly

fact specific. This case offers no importent matters of

general interest nor any significant legal issues about

which there is a conflict amongst the circuits, nor any

issue which calls for action by the Supreme Court. Con-

trary to the contention of the petitioners, there is no

19

“unanswered question” in Helicopteros Nacionales that

could be resolved by granting certiorari in this case. With

regard to the forum non conveniens inquiry, the Court

of Appeals properly applied an abuse of discretion stan-

dard, as enunciated by this Court for use in these specific

situations, and concluded that such abuse occurred. Since

a defendant has no absolute right to a forum non con-

veniens dismissal, an important right is not being af-

fected. Finally, the ultimate forum, the Federal District

Court in Tucson, Arizona, is a place where both sides can

obtain a just and final result. The Petition for Writ of

Certiorari should be denied.

Dated April 1, 1985.

By lor tetisastenadnasinanai

Michael J. Rusing

William H. Tinney

P.O. Box 871

Tucson, Arizona 85702

Attorneys for Respondents

Of Counsel

Bilby & Shoenhair, P.C.

20

CERTIFICATE OF FILING AND SERVICE

STATE OF ARIZONA

COUNTY OF PIMA

~_" ~~"

*

I, WILLIAM H. TINNEY, one of the attorneys for

Respondents, and a member of the Bar of the Supreme

Court of the United States, hereby certify that on this

Ist day of April, 1985, 40 copies of Respondents’ Brief

in Opposition were mailed, postage prepaid, to the Clerk

of the Supreme Court of the United States, within the

time allowed for filing same.

I also certify that on this lst day of April, 1985, 3

copies of the Respondents’ Brief in Opposition were

mailed, postage prepaid, to Herbert Mallamo and Gary

F. Howard, 4041 North Central Avenue, Suite 2001,

Phoenix, Arizona 85012, attorneys for the Petitioners.

I further certify that all parties required to be served

have been served.

WILLIAM H. TINNEY

SUBSCRIBED AND SWORN to before me this Ist

day of April, 1985 by William H. Tinney.

My Commission Expires:

Notary Public

APPENDIX

INDEX TO APPENDIX

Page

APPENDIX A — Ninth Circuit Opinion .................... la

APPENDIX B — Gates Response to Defendant

James B. Jensen & Co., Inc.'s Motion to

Ne asc hd aie hla ana pansnneansians 24a

APPENDIX C — Petitioners’ Reply Memorandum

WA INT BINION i ssinnsnccensstsicntccsersiccadnsniasensnen 58a

Sd Ate uta ta/ webirs

la

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

GATES LEARJET

CORPORATION and

GATES LEARJET EXPORT

~~ ee ee eee

CORPORATION,

Plaintiffs/ Appellants,

VS.

JAMES B. JENSEN, JR.; No. 83-2643

RICARDO S. TOMACRUZ; ) DC No. CIV 82-139

LEARJET PHILIPPINES, INC., ) OPINION

a corporation; JAMES B. JENSEN )

& CO., INC., a corporation, and _)

HAMIX INTERNATIONAL, )

LTD., a corporation, )

Defendants/Apellees. )

APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF ARIZONA

ALFREDO C. MARQUEZ, DISTRICT JUDGE,

PRESIDING

ARGUED AND SUBMITTED MAY 14, 19384

Before: CHOY, PREGERSON, and REINHARDT,

Circuit Judges.

CHOY, Circuit Judge:

The issues on this appeal are (1) whether the dis-

trict court properly dismissed counts two and three of

appellant's complaint for lack of personal jurisdiction,

and (2) whether the district court’s dismissal of counts

2a

one and four for forum non conveniens was an abuse of

discretion. On both issues, we reverse and remand to the

district court.

I. BACKGROUND

Gates Learjet Corporation and Gates Learjet Export

Corporation (“Gates”) entered into an international dis-

tributorship agreement with Learjet Philippines, Inc.

(“LPI”) in 1978. Gates, principally located in Tucson,

Arizona, manufaciures executive aircraft known as Lear-

jets. LPI is a Philippine corporation. The original agree-

ment was for a period of one year but was renewed for

an additional two years and four months.

James B. Jensen, Jr., a United States citizen with

residence in California and the Philippines, is the presi-

dent of LPI and James B. Jensen & Co. (“Jensen, Inc.”),

a California corporation located in San Francisco. The

negotiations for the international distributorship agree-

ment occurred both in Tucson, when Jensen visited

Gates, and by telephone, correspondence, and telex from

Tucson to Manila and San Francisco. The agreement

provides that it “is an Arizona agreement and that it shall

be governed by the laws of the State of Arizona of the

United States of America in all matters, included but not

limited to, validity, obligation, interpretation, construc-

tion, performance and termination.”

During the time the agreement was in effect, Jensen

and Ricardo S. Tomacruz, the vice-president and general

manager of LPI and a citizen and resident of the Philip-

pines, made several trips to Tucson on behalf of LPI. The

purposes of Jensen’s visits, which numbered at least

seven between February 1978 and September 1981, in-

3a

cluded arrangement of an aircraft sale, meetings with

Gates employees, and attendance at Gates’ international

distributor conference and the delivery of several air-

planes. LPI also entered into several airplane purchase

agreements with Gates in Tucson. Each agreement con-

tained a choice of law provision specifying Arizona and

a choice of forum provision that the “courts of Arizona

shall have exclusive jurisdiction to hear and determine

all claims, disputes, actions, or suits which may arise

hereunder.” In addition, LPI and Jensen, Inc. purchased

over $200,000 in spare parts from Gates.

In 1981, Gates did not renew the international dis-

tributorship agreement with LPI. On February 3, 1982,

Gates filed a four-count complaint in an Arizona state

court against Jensen, Tomacruz, LPI, Jensen, Inc., and

Hamix International Ltd., a Hong Kong corporation

(“defendants”). Count one of the complaint alleges un-

authorized use of Gates’ tradenames and trademarks.

Count two alleges abuse of process arising out of the

seizure by Philippine authorities of a Gates’ aircraft and

the jailing of its pilot. Count three alleges interference

with contractual relations between Gates and customers

in the Philippines. Count four alleges a conspiracy to

make unauthorized use of Gates’ tradename and trade-

mark. The action was removed to a federal district court

for diversity of citizenship.

On September 23, 1982, the United States District

Court for the District of Arizona dismissed counts two

and three for lack of personal jurisdiction as to one of

the defendants, Jensen, Inc. Gates Learjet Corp. v. Jen-

sen, No. CIV 82-139 (D. Ariz. Sept. 23, 1982) (Gates

Learjet I). After this partial dismissal, the defendants

answered the complaint and filed a six-count counter-

4a

claim. The counterclaim alleges improper termination

of the distributorship agreement, unjust enrichment, in-

terference with contractual-relations, and defamation. It

added three parties to the litigation: B. S. Stillwell, Jane

Doe Stillwell, and Stillwell Aviation Australia Party, Ltd.

On May 31, 1983, the district court clarified its earlier

dismissal order and dismissed counts two and three as to

all of the defendants.

On October 5, 1983, after 18 months of trial prepara-

tion, the defendants challenged the convenience of the

forum. The defendants allege that two civil actions pend-

ing in Philippine courts make the same allegations as the

action brought by Gates in Arizona. On November 1,

1983, the district court conditionally dismissed counts

one and four of the complaint under the doctrine of

forum non conveniens. The court dismissed Gates’ com-

plaint on the following conditions: 1) The Philippine

courts accept jurisdiction; 2) the defendants submit to

that jurisdiction; 3) the defendants make their employees

available for process and as witnesses; 4) the defendants

waive any newly arisen statute of limitations defenses;

5) the defendants recognize any Philippine court judg-

ment; and 6) all discovery and products may be used in

any action in the Philippines, subject to objections which

could be made in this court. Gates Leaijet Corp. v. Jen-

sen, No. CIV 82-189, slip op. at 11 (D. Ariz. Nov. 1, 1983)

(Gates Learjet II).

Il. DISCUSSION

A. Personal Jurisdiction

The district court dismissed counts two and three

of Gates’ complaint for lack of personal jurisdiction. As

the party seeking to invoke the jurisdiction of the court,

5a

Gates has the burden of establishing personal jurisdic-

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

Inc., 557 F.2d 1280, 1285 (9th Cir. 1977).' Arizona's

long-arm statute establishes personal jurisdiction over

over nonresidents to the maximum extent permitted by

due process. Houghton v. Piper Aircraft Corp., 112 Ariz.

365, 542 P.2d 24, 26 (1975). Due process requires the

defendants to have certain minimum contacts with the

forum so that 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); Colonial Leasing Co. v. Pugh Brothers Garage,

'Gates contends that the defendants waived any objection to

personal jurisdiction when they invoked the jurisdiction of this

court by asking for affirmative relief in a permissive counter-

claim. The courts are divided on the issue of whether the asser-

tion of a permissive counterclaim should constitute a waiver of

a jurisdictional defense. Compare North Branch Products, Inc. v.

Fisher, 284 F.2d 611, 615 (D.C. Cir. 1960) (waiver) and Merz

v. Hemmerle, 90 F.R.D. 566, 569 (E.D.N.Y. 1981) (waiver) with

Neifeld wv. Steinberg, 488 F.2d 423, 427 (3d Cir. 1971) (no

waiver) and Lomanco, Inc. v. Missouri Pacific Railroad Co.,

566 F.Supp. 846, 851 (E.D. Ark. 1983) (no waiver). See gen-

erally Annot., 17 A.L.R. Fed. 390 (1973). Although this court

has held that the defendant’s assertion of a compulsory counter-

claim “does not constitute a waiver of any jurisdictional defense

he previously or concurrently asserts,” Dragor Shipping Corp. v.

Union Tank Car Co., 378 F.2d 241, 244 (9th Cir. 1967), we have

not decided whether the assertion of a permissive counterclaim

constitutes a waiver.

As to defendant Jensen, Inc., this case is easily resolved

because Jensen, Inc. brought a motion to dismiss for lack of

personal jurisdiction prior to the filing of the answer and counter-

claim. See Neifeld v. Steinberg, 438 F.2d at 428 n.10 (clearly

no waiver when jurisdictional defenses raised by motion prior

to filing of answer).

6a

735 F.2d 380, 383 (9th Cir. 1984). To satisfy this due

process requirement, Gates may prove “general jurisdic-

tion” or “limited jurisdiction.”

1. GENERAL JURISDICTION

A sufficient relationship between the defendants

and Arizona exists to support general jurisdiction if Gates

can demonstrate that the defendants’ activities within

Arizona are “substantial” or “continuous and systematic.”

See Data Disc, Inc. v. Systems Technology Assvciates,

Inc., 557 F.2d at 1287. We review the district court's

holding that Jensen “does not transact business within

Arizona on a continuous or systematic basis, and does

not provide the kind of contacts that wouid sustain exer-

cise of general jurisdiction.” Gates Learjet I, slip op. at 7.

The other defendants, however, did not raise the jurisdic-

tional defense until they filed their answer and counterclaim.

Nevertheless, we hold that the filing of a permissive counter-

claim does not constitute a waiver of a personal jurisdiction de-

fense asserted in the same pleading. Rule 12(b) of the Federal

Rules of Civil Procedure implicitly authorizes a defendant to

join a jurisdictional defense with a counterclaim without waiv-

ing this defense. The rule permits a defendant to raise jurisdic-

tional defenses by motion or by answer. If we were to find a

waiver when a defendauts files a permissive counterclaim in the

same pleading in which he asserts jurisdictional defenses, the

—purposes behind Rule 12(b) — to avoid the delay caused by

successive motions and pleadings and to reverse the prior prac-

tices of asserting jurisdictional defenses by “special appearances”

— would be thwarted. See Neifeld v. Steinberg, 438 F.2d at 429.

Moreover, courts have noted that when the rule makers wanted

to attach “waiver” consequences in certain situations, they did

so explicitly. See Id. at 428 & n.11; Lomanco, Inc. v. Missouri

Pacific Railroad Co., 566 F.Supp. at 850.

Pee Sh eee Len

ttl Cnt sie ae nS det et

Ta

Gates cites five activities to prove that defendants’

contacts with Arizona were “continuous and systematic”

and “substantial”: 1) Jensen solicited the distributorship

agreement in Arizona; 2) the defendants visited Tucson

a number of times; 3) the airplane purchase agreements

between Gates and Jensen contained an Arizona choice

of law and forum provision; 4) the defendants purchased

spare parts from Gates in Tucson; and 5) the defendants

sent many letters and telexes and made numerous tele-

phone calls to Tucson.

We must decide whether these contacts constitute

sufficient activity in Arizona to conclude that the defend-

ants “may in fact be said already to be ‘present’ there.”

Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d

406, 413 (9th Cir. 1977). Moreover, we must focus upon

the “economic reality” of the defendants’ activities rather

than a mechanical checklist. See Thos. P. Gonzales

Corp. v. Consejo Nacional, 614 F.2d 1247, 1254 (9th Cir.

1980) (quoting Foster v. Mooney Aircraft Corp., 68 Cal.

App.3d 887, 137 Cal. Rptr. 694, 697 (1977) ).

We conclude that the “economic reality” here is that

defendants’ activities in Arizona were not “continuous

and systematic’ or “substantial”. Jensen’s solicitation of

the distributorship agreement in Arizona and the defend-

ants’ visits to Tucson do not constitute “conducting busi-

ness’ in Arizona. See Rocke v. Canadian Automobile

Sport Club, 660 F.2d 895, 399 (9th Cir. 1981). Making

telephone calls and sending telexes and letters to Tucson

are not activities which support a finding of general

jurisdiction. See Thos. P. Gonzales Corp. v. Consejo Na-

cional, 614 F.2d at 1254. Furthermore, the choice of

forum provision in the airplane purchase agreement ap-

plies only to disputes arising out of those agreements.

8a

Significantly, the defendants did not establish a regular

place of business in Arizona. See Rocke v. Canadian

Automobile Sport Club, 660 F.2d at 399. These contacts

in their totality do not demonstraie sufficient activity in

Arizona to support general jurisdiction. Defendants’ ac-

tivities in Arizona were more occasional than continu-

ous, and more infrequent than systematic.

2. LIMITED JURISDICTION

If a defendant's activities are not so pervasive to

subject them to general jurisdiction, this court makes the

following evaluation in determining whether there is

limited jurisdiction:

(1) The nonresident defendant must do some act

or consummate some transaction with the forum or

perform some act by which he purposely avails him-

self of the privilege of conducting activities in the

—_ thereby invoking the benefits and protections

of its laws.

(2) The claim must be one which arises out of or

results from the defendant's forum-related activities.

(3) Exercise of jurisdiction must be reasonable.

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

557 F.2d 1280, 1287 (9th Cir. 1977).

Gates clearly satisfies the first prong of this test. Not

only did Jensen solicit the distributorship agreement in

Arizona, but also the agreement specifically provides

that Arizona law governs it. The distributorship agree-

ment,’ therefore, directly ‘nvokes the benefits and protec-

tions of Arizona laws. See O'Hare International Bank v.

Hampton, 437 F.2d 1178, 1177 (7th Cis. 1971); Alchemie

9a

International, Inc. v. Metal World, Inc., 523 F.Supp.

1039, 1054 (D.N.J. 1981). Given these circumstances,

Jensen should have reasonably anticipated “being haled

into court” in Arizona. See World-Wide Volkswagen

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

Prong two of the Data Disc inquiry requires that

each claim “arises out of or results from” the defendants’

forum related activity. 557 F.2d at 1287. The district

court had the most trouble with this part of the test,

stating:

The claims of counts two and three, sounding in tort

law, cannot be said to arise out of the distributor-

ship agreement. These claims result from the con-

duct of defendant outside the state, and are too

attenuated a contact to justify exercise of personal

jurisdiction.

Gates Learjet I, slip op. at 10. After examining the record,

we conclude that the district court erred in finding that

the claims in counts two and three are “too attenuated

a contact” to justify the exercise of personal jurisdiction.

Count two of Gates’ complaint alleges that the de-

fendants filed two civil actions and one criminal com-

plaint in the Philippines which caused the seizure of

one of Gates’ Learjets and the arrest of one of its em-

ployees. Count two alleges further that these actions

were meant to harass, intimidate and threaten Gates and

constitute an abuse of process. At first blush, this count

may appear to be unrelated to the distributorship agree-

ment. An examination of the complaint that the defend-

ants filed in the Philippines on December 1, 1981, how-

ever, dispels any doubt that this count “arises out of” the

distributorship agreement.

10a

The first cause of action in the Philippines complaint

alleges that Gates’ nonrenewal of the distributorship

agreement with the defendants was “clearly contrary to

law, morals, good customs, public policy and public

order.” The second cause of action alleges “moral” and

reputation damages for Gates’ bad faith in refusing to

renew the distributorship agreement. The third cause of

action alleges wanton and fraudulent behavior in refus-

ing to negotiate the renewal of the distributorship agree-

ment. Thus, count two of Gates’ complaint arose out of

the distributorship agreement because its termination

induced defendants’ alleged harassment and intimida-

tion of Gates. Count two was not too attenuated from the

distributorship agreement to support a finding of limited

jurisdiction.

We similarly conclude that count three of Gates’

complaint satisfies the second prong of the Data Disc

test. Count three alleges that the defendants interfered

with Gates’ contractual relations with its customers in

the Philippines. This count also arises out of the distribu-

torship .yreement because its factual basis concerns

whether Jensen improperly used Gates’ tradenames con-

trary to the terms of the distributorship agreement.’

?Gates cites cases that interpret an Arizona attorney's fee

=" statute and hold that tort claims arise ou of a contract if they

could not exist “but for” the contract. See, e.g., Sparks v. Republic

National Life Insurance Co., 132 Ariz. 529, 544, 647 P.2d 1127,

1141 (1982), cert. denied, 459 U.S. 1070 (1982). Although these

cases interpret the “arises out of” language in a manner that sup-

ports Gates’ construction, Gates never demonstrates why this

court, in applying a constitutional due process test, should adopt

an Arizona court's interpretation of an irrelevant state statute.

A

lla

The third and final prong of the Data Disc inquiry

requires a court's exercise of jurisdiction to be reasonable.

557 F.2d at 1287. This court has identified seven factors

as pertinent to the reasonableness inquiry:

(A) the extent of the defendant's purposeful inter-

jection into the forum state; (B) the burden of de-

fending in the forum state; (C) the extent of the

conflict with the sovereignty of the defendant's

state; (D) the forum state's interest in adjudicating

the dispute; (E) the most efficient judicial resolu-

tion of the controversy; (F) the importance of the

forum to the laintiffs interest in convenient and

effective relief; and (G) the existence of an alterna-

tive forum.

Rocke v. Canadian Automobile Sport Club, 660 F.2d

395, 399 (9th Cir. 1981); see Insurance Co. of North

America v. Marina Salina Cruz, 649 F.2d 1266, 1270 (9th

Cir. 1981). “These factors are not mandatory tests, each

of which plaintiff must pass in order for a court properly

to assume jurisdiction. Instead, the factors illuminate the

considerations of fairness and due process set forth in

International Shoe, 326 U.S. at 310.” Hedrick v. Daiko

Shoji Co., Ltd., Osaka, 715 F.2d 1355, 1359 (9th Cir.

1983).

The application of these factors to this case con-

vinces us that it would be reasonable to subject the de-

fendants to the jurisdiction of the Arizona court. We con-

sider each of the factors in turn.

Although not extensive enough to support general

jurisdiction, the contacts of LPI, Jensen, and Tomacruz

with Arizona are sufficient to demonstrate a purposeful

interjection into the forum state. Jensen solicited an inter-

12a

national distributorship agreement in Tucson, which con-

tained a choice of law provision specifying Arizona. Both

Jensen and Tomacruz made several visits to the Gates’

facilities and even accepted delivery of airplanes in Tuc-

son. Moreover, these airplane purchase agreements con-

tained choice of law and forum provisions, both of which

specified Arizona. Thus, the terms of important contracts

between Gates and the defendants demonstrate that the

defendants had notice that they might be brought into

a court in Arizona.

The burden on the defendants of defending in Ari-

zona, as opposed to the Philippines, is potentially sig-

nificant. Litigating abroad imposes significant incon-

veniences upon the party appearing in a foreign country.

Olsen By Sheldon v. Mexico, 729 F.2d 641, 650 (9th Cir.

1984). We nevertheless conclude that the burden on the

defendants would not be substantial here, primarily be-

cause the defendants must litigate in Arizona anyway.

The district court found personal jurisdiction as to counts

one and four. The extra burden of defending counts two

and three in Arizona, particularly in light of their con-

nection to counts one and four, would be minimal.

The reasonableness of jurisdiction depends also in

part upon the seriousness of the potential affront to the

sovereignty of the defendants’ state. A foreign nation

presents a higher sovereignty barrier than that between

two states within our union. Insurance Co. of North

America v. Marina Salina Cruz, 649 F.2d at 1272. Two

of the three defendants named in counts two and three

are residents of the Philippines. The government of the

Philippines clearly has an interest in resolving disputes

that involve its citizens. Nevertheless, we note that this

factor is not dispositive because, if given controlling

18a

weight, it would always prevent suit against a foreign

national in a United States Court.

We examine next Arizona's interest in adjudicating

this dispute. Arizona has a strong interest in ensuring

that its citizens are fully compensated for their injuries,

in part to protect the state's economic resources from

unnecessary expenditures. See Olsen By Sheldon v. Mex-

ico, 729 F.2d at 651.

At the current stage of the litigation, Arizona would

appear to be the more efficient forum to resolve this dis-

pute. Gates alleges, and defendants do not dispute, that

discovery is completed and “this matter could be tried

in a matter of weeks.” In addition, although parts of

counts two and three may require the application of

Philippine law, the proof of both counts may also involve

the application of Arizona law. For example, Gates may

attempt to prove the unreasonableness of defendants’

alleged actions in count two, in part, by demonstrating

that Gates properly terminated the distributorship agree-

ment, which proof would require the application of Ari-

zona law. The district court in Arizona is the more effici-

ent forum to resolve such interpretations of Arizona law.

See Hedrick v. Daiko Shoji Co., Ltd., Osaka, 715 F.2d at

1859; Raffaele v. Compagnie General Maritime, 707 F.2d

395, 399 (9th Cir. 1983); Insurance Co. of North Amer-

ica v. Marina Salina Cruz, 649 F.2d at 1273.°

3 The Philippines, of course, may be the more efficient forum

to apply possible Philippine law questions. Nevertheless, we con-

clude that Arizona is the more efficient forum because the action

is almost ready for trial in Arizona.

l4a

An Arizona court certainly provides Gates with the

most convenient forum for seeking relief. Unlike the

individual plaintiff in Raffaele v. Compagnie Generale

Maritime, 707 F.2d at 399, both parties here invoive

corporate entities apparently with sufficient resources

to defend in either country. We therefore give some, but

not significant, weight to this factor.

The final factor we consider is the availability of an

alternative forum. Gates alleges that it may not receive

a fair trial in the Philippines because of the “well pub-

licized violent upheavals” there. We note that the “appel-

lants must carry the burden of proving the unavailability

of an alternative forum.” Olsen By Sheldon v. Mexico,

729 F.2d at 651. We cannot say that Gates has satisfied

this burden. In light of the other factors, however, this

‘factor is not dispositive.

After considering all the relevant factors, we con-

clude that, on balance, the exercise of limited personal

jurisdiction over the defendants by a federal district court

in Arizona is reasonable. The defendants’ numerous visits

to Tucson and Jensen’s solicitation of the distributorship

agreement there demonstrate a purposeful interjection

into the state of Arizona. Moreover, defending counts

two and three would not burden defendants significantly

because they must litigate counts one and four in Arizona

anyway. We place some, but not substantial, weight on

the convenience to Gates of litigating this dispute in Ari-

zona. Finally, Arizona has an interest in adjucicating this

dispute and, at this stage of the litigation, it is the more

efficient forum.

In weighing these factors, we are not convinced that

adjudication of this dispute in Arizona will affront the

15a

sovereignty of the Philippines. Although the availability

of an alternative forum supports the defendants’ positiou,

the other factors weigh more strongly in Gates’ favor. The

district court in its order did not weigh these factors, nor

did it examine whether the exercise of personal jurisdic-

tion would be reasonable. Under the Data Disc three-

prong inquiry, therefore, the district court erred in dis-

missing counts two and three for lack of personal juris-

diction.

B. Forum Non Conveniens

On November 1, 1983, the district court condition-

ally dismissed Gates’ complaint under the doctrine of

forum non conveniens. Because the district court had

dismissed counts two and three for lack of personal juris-

diction one year earlier, this dismissal pertained only to

counts one and four, which allege unauthorized use of

Gates tradenames and trademarks. The dismissal would

require Gates to pursue relief in the Philippine courts.

Whether an action may be dismissed for forum non

conveniens when jurisdiction is otherwise properly in-

voked is governed by the factors outlined in Gulf Oil

Corp. v. Gilbert, 330 U.S. 501, 508-09 (1947). The Court

divided these factors into “private interest” and “public

interest” factors, each of which must be weighed by the

district court. As this court has noted:

The private interest factors include “the relative ease

of access to sources of proof; availability of com-

pulsory process for attendance of unwilling, and the

cost of obtaining attendance of willing, witnesses;

possibility of view of premises, if view would be

appropriate to the action; and all other practical

problems that make trial of a case easy, expeditious

and inexpensive.” ... The public interest factors in-

16a

clude the administrative difficulties flowing from

court congestion; the local interest in having local-

ized controversies resolved at home; the interest in

having the trial of a diversity case in a forum that

is familiar with the law that must govern the action;

the avoidance of unnecessary problems in conflicts

of law, or in application of foreign law, and the un-

fairness of burdening citizens in an unrelated forum

with jury duty.

Cheng v. Boeing Co., 708 F.2d 1406, 1409-10 (9th Cir.

1983) (citations omitted), cert. denied, 104 S.Ct. 549

(1983).

If a district court properly analyzes and considers all

relevant factors and its balancing of these factors is rea-

sonable, its forum non conveniens dismissal “may be re-

versed only when there has been a clear abuse of discre-

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

(1981). A district court, therefore, abuses its discretion

when it fails to balance the relevant factors. La Seguridad

v. Transytur Line, 707 F.2d 1304, 1308 (11th Cir. 1983).

_ “Emphasis on the district court’s discretion . .. must not

overshadow the central principle of the Gilbert doctrine

that ‘unless the balance is strongly in favor of the de-

fendant, the plaintiff's choice of forum should rarely be

disturbed.’ ” Manu International, S.A. v. Avon Products,

Inc., 641 F.2d 62, 65 (2d Cir. 1981) (quoting Gulf Oil

Co. v. Gilbert, 330 U.S. at 508).

We conclude that the district court did not balance

the important relevant factors. The balance of the public

and private interest factors is not strongly in favor of the

defendants. We therefore hold that the district court’s

dismissal of counts one and four for forum non con-

venier . was an abuse of discretion.

17a

1. PRIVATE INTEREST FACTORS

The district court failed to examine at least two im-

portant and relevant private interest factors.’ First, the

district court did not recognize or consider in its balanc-

ing that Gates is a United States citizen and a resident

of Arizona. A United States citizen has no absolute right

to sue in a United States court. Mizokami Brothers of

Arizona, Inc. v. Baychem Corp., 556 F.2d 975, 977 (9th

Cir. 1977) (per curiam), cert. denied, 434 U.S. 1085

(1978). The Supreme Court, however, as observed “that

a plaintiff's choice of forum is entitled to greater defer-

ence when the plaintiff has chosen the home forum.”

Piper Aircraft Co. v. Reyno, 454 U.S. at 255; see Koster

v. Lumbermens Mutual Co., 330 U.S. 518, 524 (1947);

Paper Operations Consultants International, Ltd. v. SS

Hong Kong Amber, 518 F.2d 667, 672 (9th Cir. 1975).

Greater deference is due because “a real showing of con-

venience by a plaintiff who has sued in his home forum

will normally outweigh the inconvenience the defendant

may have shown.” Piper Aircraft Co. v. Reyno, 454 U:S.

at 255 n.23 (quoting Koster v. Lumbermens Mutual Co.,

830 U.S. at 524).

4 The district court correctly began its analysis with a determi-

nation of whether there exists an alternative forum. See Piper

Aircraft Co. v. Reyno, 454 U.S. at 254 n.22; Cheng v. Boeing Co.,

708 F.2d at 1410; Pain v. United Technologies Corp., 687 F.2d

775, 784 (D.C. Cir. 1980), cert. denied, 454 U.S. 1128 (1981).

The court noted that a defendant’s amenability to process in the

other jurisdiction ordinarily satisfies this requirement. See Gulf

Oil Co. v. Gilbert, 330 U.S. at 506-07. We do not overturn the

district court’s finding of an alternative forum. That an altern-

ative forum exists, however, is not dispositive in the balancing

required in a forum non conveniens analysis.

18a

The second relevant private interest factor the dis-

trict court failed to examine is that the parties were ready

for trial when it dismissed the complaint for forum non

conveniens. The discovery deadline had passed; all docu-

ments needed for trial had been exchanged and/or iden-

tified; and all necessary trial documents were located in

Tucson, Arizona. The central purpose of any forum non

conveniens inquiry is to ensure that the trial is conveni-

ent. Piper Aircraft Co. v. Reyno, 454 U.S. at 256; La

Seguridad v. Transytur Line, 707 F.2d at 1307. That trial

preparation had progressed nearly to the point of trial

certainly was a relevant factor when the district court

considered whether trial of the case in Arizona would

have been more “easy, expeditious and inexpensive” than

trial in the Philippines. See Gulf Oil Corp. v. Gilbert,

330 U.S. at 508. Although no single factor is dispositive,

we conclude that the district court’s failure to weigh

these private interest factors was an abuse of discretion.

We also observe that the private interest factors

mentioned by the district court do not strongly support

the defendants’ position on forum non conveniens. The

district court noted that “the vast majority of the wit-

nesses reside in the Philippines. ...” Gates Learjet II,

slip op. at 9. The defendants, however, admit that the

district court was not absolutely correct. In fact, 23 of

the 44 witnesses, whom the parties designated in response

to interrogatories, reside in the Philippines, which is

hardly a “vast majority.”

Furthermore, the district court improperly focused

on the number of witnesses in each location. Instead, the

court should have examined the materiality and impor-

tance of the anticipated witnesses testimony and then

determined their accessibility and convenience to the

en ee

19a

forum. See La Seguridad v. Transytur Line, 707 F.2d at

1308-09; Thomson & McKinnon v. Minyard, 291 F.Supp.

578, 576 (S.D.N.Y. 1968). We also note that a district

court should keep in mind that “the increased speed and

ease of travel and communication . .. makes, especially

when a key issue is the location of witnesses, no forum

‘as inconvenient [today] as it was in 1947, ” when the

Supreme Court decided Gilbert. Manu International,

S.A. v. Avon Products, Inc., 641 F.2d 62, 65 (2d Cir.

1981). We are not convinced that the court here prop-

erly considered and weighed this private interest factor.

We therefore cannot give much deference to the district

court's consideration of it.

2. PUBLIC INTEREST FACTORS

In its consideration of public interest factors, the

district court concluced that the Philippines “has a sub-

stantial interest in the outcome of the litigation.” It rea-

soned that “most of the operating facts occurred in the

Philippines,” and that “[t]he controversies will require

the application of Arizona law and Philippine law.” Gates

Learjet II, slip op. at 10. Public interest factors properly

considered include “the local interest in having localized

controversies resolved at home,” and “the interest in hav-

°In its discussion of private interest factors, the district court

also noted that “almost all of the acts alleged in the complaints

and counterclaims occurred in the Philippines.” This observa-

tion, however, seems to pertain to the Philippines’ interest in

the action, which is a public interest factor. If the district court

was instead referring to the convenience of obtaining certain

evidence, it failed to explain what evidence was unavailable. As

discussed above, most trial materials were located in Arizona at

the time the district court dismissed counts one and four for

forum non conveniens.

20a

ing the trial of a diversity case in a forum that is familiar

with the law that must govern the action.” Cheng v. Boe-

ing Co., 708 F.2d at 1410.

We nevertheless conclude that th: district court's

consideration of these public interest factors rested on

a mistaken assumption about the applicable law and im-

properly ignored the advantages of an Arizona forum for

the trial. In noting that both Philippine and Arizona law

applied to this matter, the district court apparently con-

considered all four counts of the Gates complaint. The

defendants motion to dismiss for forum non conveniens,

however, could pertain only to counts one and four be-

cause the court had already dismissed counts two and

three for lack of personal jurisdiction.

Counts one and four allege unauthorized use and a

conspiracy to make unauthorized use of Gates’ tradename

and trademark. These counts involve an interpretation

of the international distributorship agreement entered

into between Gates and LPI. Under the heading, “Post-

Termination Actions,’ the distributorship agreement

provides:

The Distributor shall immediately discontinue the

use of any trade names or trademarks referred to in

Article III above and shall make no further use of

the same nor any other name, title, expression or

mark so nearly resembling such trade names or

trademarks as to be deceptive in nature.

The distributorship agreement also specifically provides

that it shall be governed by Arizona law. Thus, counts

one and four apparently are contract actions that require

the application of Arizona law, not Philippine law.‘

¢ Defendants implicity admit this point, conceding that Arizona

law would apply to a contract action.

———————————e

Qla

In addition to making a mistaken assumption about

the applicable law, the district court failed to weigh Ari-

zona’s interests in having the controversy “resolved at

home.” Arizona has a significant interest in interpreting

its own laws. See Cheng v. Boeing Co., 708 F.2d at 1411.

Arizona also has an interest in protecting its companies

from trademark infringement abroad to preserve the

state's economic vitality. Although the situs of the alleged

trademark and tradename infringement was the Philip-

pines, it appears that Philippine law is not applicable. We

therefore conclude that these public interest factors

sheuld not weigh heavily in defendants’ favor. A proper

understanding of the applicable law and the relative

interests, in fact, suggests that Arizona has the more sub-

stantial interest in this litigation.

The district court particularly emphasized one pub-

lic interest factor: the docket congestion of its court. It

stated:

Counsel have indicated that there are hundreds, if

not thousands, of exhibits involved. There will be

many witnesses testifying for both sides. The case

will take weeks to try. The Tucson division of the

District of Arizona is presently operating with two

district judges. Normally there are three judges in

the division. The two judges are handling all of the

criminal calendar. Outside judges have been as-

signed to handle part of the civil calendar and it is

contemplated that more help will be necessary in

the future.

Gates Learjet II, slip op. at 10.

This factor also should not weigh heavily in defend-

ants favor. The real issue is not whether a dismissal will

reduce a court’s congestion but whether a trial may be

22a

speedier in another court because of its less crowded

docket. See Starnes v. McGuire, 512 F.2d 918, 932 (D.C.

Cir. 1974) (en banc); 15 C. Wright, A. Miller & E.

Cooper, Federal Practice & Procedure § 3854 at 289-91

(1976); see also Foster v. Litton Industries, Inc., 431

F.Supp. 86, 88 (S.D.N.Y. 1977 (relative docket condi-

tions accorded some, but not decisive, weight in transfer

motions ). The district court here observed only that its

dockets was congested; it did not determine whether a

trial would be speedier in the Philippines. Even if it

were, however, it is unfair for a court te subject a United

States corporation to the courts of another country merely

because plaintiff's home country courts are congested.

The forum non conveniens doctrine should not be used

as a solution to court congestion; other remedies, such as

placing reasonable limitations on the amount of time

each side may have to present evidence, are more

appropriate.

We hold that the district court failed to consider

relevant private and public interest factors and miscon-

- strued others. The district court therefore abused its

discretion. On balance, we conclude that the relevant

private and public interest factors support the district

court's retention of jurisdiction and the dismissal of de-

fendants forum non conveniens motion.

iil. CONCLUSION

Gates cannot demonstrate that the defendants had

sufficient activity in Arizona to establish general juris-

diction. Under the Data Disc three-prong inquiry into

limited jurisdiction, however, we hold that the district

court erred in dismissing counts two and three for lack

of personal jurisdiction. As to the district court’s dismissal

23a

of counts one and four for forum non conveniens, we find

an abuse of discretion. The district court’s orders are

therefore

REVERSED AND THE CASE IS REMANDED.

24a

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

GATES LEARJET

CORPORATION and

GATES LEARJET EXPORT

CORPORATION,

Plaintiffs,

VS. NO. CIV 82-139-

JAMES B. JENSEN, JR.,; TUC-ACM

RESPONSE TO

DEFENDANT

LEARJET PHILIPPINES, JAMES B.

INC., a corporation; JENSEN & CO.,

JAMES B. JENSEN & CO., INC INC’S MOTION

TO DISMISS

a corporation, and HAMIX

INTERNATIONAL LTD.,

a corporation,

)

)

)

)

)

7

RICARDO S. TOMACRUZ; )

)

)

»)

)

)

)

)

Defendants.

Plaintiffs, pursuant to Rule 12 of the Federal Rules

of Civil Procedure, hereby respond to defendant James

B. Jensen & Co., Inc.’s Motion to Dismiss. This Response

is based on the attached Memorandum of Points and

Authorities.

MEMORANDUM OF POINTS AND AUTHORITIES

Defendant James B. Jensen & Co., Inc. (herein-

after “Jensen, Inc.”) objects to an Arizona Court’s exer-

cise of jurisdiction over it. In doing so, Jensen, Inc. is

indulging in a corporate shell game in an attempt to

confuse the Court and avoid proper exercise of its juris-

diction.

25a

os

An examination of James B. Jensen's Answers to

Interrogation, his Affidavit, and the Affidavit of Larry

McDonough, attached hereto as Exhibit L, show that

Mr. Jensen made numerous trips to Tucson, Arizona

for various reasons, including the negotiation of the

contract which established the relationship between

the parties to this lawsuit. Mr. Jensen claims that all

these visits were on behalf of Learjet Philippines, Inc.,

rather than Jensen, Inc. It can be safely assumed that

if service had been obtained upon Learjet Philippines,

Inc., he would be claiming that all the visits were on

behalf of Jensen, Inc., a claim which would be sup-

ported by the evidence. The spuriousness of Mr. Jensen’s

claim that the early visits were on behalf of an entity

other than Jensen, Inc. is made obvious by the recogni-

tion that Learjet Philippines did not even exist at the

time of the early visits. Furthermore, all correspondence

between the Parties was to and from James B. Jensen,

as President of Jensen, Inc. See correspondence attached

hereto as Exhibits A through F. Many of these letters

refer to trips made by Jensen to Tucson and regard dis-

cussions which occurred at that time.

Finally, Jensen maintains that Learjet Philippines,

Inc. and Jensen, Inc. are separate and distinct companies

and that the latter had no contact with Tucson. How-

ever, an examination of correspondence from Learjet

Philippines, Inc., shows that James B. Jensen, Inc. is

the mailing address of Learjet Philippines, Inc. See

Exhibit H attached hereto. Mr. jensen, as President of

Learjet Philippines, Inc., refers to James B. Jensen & Co.,

Inc. as “our San Francisco office” and “our U.S. Affiliate

company . See Exhibit I attached hereto. A later letter

from Mr. Jensen, as President of Learjet Philippines, Inc.,

26a

again refers to James B. Jensen & Co., Inc. as “our San

Francisco office” and asks that Learjet Philippines’ mail

he sent there. See Exhibit J attached hereto. Finally,

Mr. Jensen, as President of Learjet Philippines, Inc.,

refers to James B. Jensen & Co., Inc. as its “U.S. purchas-

ing arm’. See Exhibit K attached hereto.

Evidently, the filing of this lawsuit has made these

two corporate entities suddenly separate and distinct,

at least in the mind of Mr. Jensen. It is readily apparent,

however, from examination of the attached documents

that:

A. Mr. Jensen, on behalf of Jensen, Inc., trans-

acted business in the State of Arizona; and

B. That Mr. Jensen used Jensen, Inc. and Learjet

Philippines, Inc. interchangeably with total disregard

of separate corporate identities.

Therefore, James B. Jensen, Jr., President of James

‘-B. Jensen & Co., Inc. has been in Arizona on numerous

occasions negotiating contracts with plaintiffs, attend-

ing distributor's conferences put on by plaintiffs, accept-

ing delivery of merchandise from the plaintiffs in per-

formance of contracts, etc. See Affidavits of Lawrence

McDonough and James B. Jensen, James B. Jensen's

Answers to Interrogatories and correspondence attached

hereto. The agreement which underlies the dispute out

of which this action arose was substantially negotiated

in Tucson by Mr. Jensen. See contract attached as Exhibit

A to the Complaint. Indeed, Mr. Jensen, on behalf of

Jensen, Inc., came to Tucson and initiated the relation-

ship with plaintiffs. See letters attached hereto as Ex-

hibits A through G. Such solicitation of a contract or

27a

transaction establishes that a party “purposely availed

itself of the privilege of conducting activities” within a

state. Hanson v. Denckla, 376 U.S. 235, 253, 78 S. Ct.

1228, 1239, 2 L.Ed. 1283 (1958). See also Empire Abra-

sive Equipment Corp. v. H. H. Watson, Inc., 567 F.2d

554, 559 (3rd Cir. 1977); Bernard Brothers, Inc. v. Pride

Manufacturing, Inc., 427 F.2d 297, 391 n.9 (3rd Cir.

1970).

It should also be noted that Article XI in the afore-

mentioned Contract, which is entitled Applicable Law,

states “It is expressly agreed and understood that this

agreement is an Arizona agreement and that it shall be

governed by the laws of the State of Arizona of the

United States of America in all matters, including, but

not limited to, validity, obligation, interpretation, con-

struction, performance and termination.” (emphasis

added ) It is well settled that such choice of law provi-

sions in a contract militate in favor of jurisdiction by the

chosen state. See Southwest Offset, Inc. v. Hudco Pub-

lishing Company, 622 F.2d 149, 152 (5th Cir. 1980) and

Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 498

N.27 (5th Cir. 1974). See Also O'Hara International

Bank v. Hampton, 437 F.2d 1173, 1177 (7th Cir. 1971)

which held:

“The fact that the guarantee was to be construed

according to Illinois law . . . clearly demonstrates

that the defendants ‘invoked the benefits and pro-

tection of the state.’ ”

Similarly, the Court in Alchemie International, Inc. v.

Metalworld, Inc., 523 F.Supp. 1039 (D.N.J. 1981) found

such a choice of law provision to be strong evidence of

the existence of jurisdiction. The Court there stated:

28a

“I judge Metalworld was on such notice here when

it solicited a contract of this size, with an explicit

New Jersey choice of law provision from a known

resident of the state of New Jersey. If it then wished

to ensure that it would not be exposed to litigation

in New Jersey, the choice of forum provision could

have been negotiated; absent such provision, Metal-

world should reasonably have antitipated being

na into court in the state.” Id. at 1054 (D.N.J.

1981).

Jurisdiction was upheld in that case which involved a

defendant with far less contact to the forum than de-

fendant Jensen, Inc. has with Arizona.

CONCLUSION

It is clear from an examination of the record that

jurisdiction over defendant Jensen, Inc. can properly be

exercised in the State of Arizona. Mr. Jensen, as Presi-

dent of Jensen, Inc. came to Arizona and negotiated

contracts and engaged in other business activities. After

Learjet Philippines was incorporated, Jensen, Inc. be-

came a U.S. Affiliate and San Francisco office and con-

tinued with its contact with plaintiffs here in Tucson.

It should be pointed out that in a Motion to Dis-

miss for lack of jurisdiction, the Plaintiff needs only a

prima facie showing of jurisdiction through its affidavits

and supporting material. Such a prima facie showing

suffices, notwithstanding any controverting presentation

by the moving party, to defeat the motion. Visual Sci-

ences, Inc. v. Integrated Communications, Inc., 600 F.2d

56 (Second Cir. 1981); Data Disc, Inc. v. Systems Tech-

nology Associates, 557 F.2d 1280, 1285 (9th Cir. 1977);

United States v. Montreal Trust Company, 358 F.2d 289,

245 (Second Cir. 1966). This has clearly been done. Ac-

29a

cordingly, it is respectfully requested defendant's Motion

to Dismiss For Lack of Jurisdiction be denied.

RESPECTFULLY SUBMITTED this 30th day of

July, 1982.

BILBY, SHOENHAIR, WARNOCK

& DOLPH, P.C.

By WILLIAM H. TINNEY

P. O. Box 871

Tucson, Arizona 85702

Attorneys for Plaintiffs

Copy of the foregoing mailed this

2nd day of August, 1982, to:

Gary F. Howard, Esq.

MOLLOY, JONES, DONAHUE, TRACHTA,

CHILDERS & MALLAMO, P.C.

2200 Arizona Bank Plaza

33 North Stone Avenue

Post Office Box 2268

Tucson, Arizona 85702

Attorneys for Defendants

30a

EXHIBIT A

TELEX RCA TELEPHONE

SAN FRANCISCO 278-259 (415) 956-2055

MANILA 722-2097

James B. Jensen & Co., Inc.

IMPORTERS EXPORTERS

735 MONTGOMERY STREET, SUITE 1626

SAN FRANCISCO, CALIFORNIA 94104

March 1, 1978

Gates Learjet Export Corporation

P. O. Box 11186

Tucson, Arizona 85734

Attention: Mr. Finn Hedlund

Vice President Marketing

Dear Mr. Hedlund:

It was a pleasure meeting you early this week, and

I wish to thank you for having given me the opportunity

to express my desire to actively sell Gates Learjets in the

Philippines.

As I mentioned, we have been active in business

between the United States and the Philippines for the

past 33 years, where we have specialized in supplying

industrial and plant equipment and spare parts involving

the sugar, cement, logging, licht & power, and fertilizer

industries, as well as various other industries.

Because of my personal interest in aviation, we be-

gan an active participation in this industry approximately

four years ago, and within this time, we have developed

a capability for selling aircraft and aircraft spares in the

Philippine market. A particularly good relati hip I

Sla

have had within this period has been with Mr. Landis

Carr and AiResearch Aviation, with whose cooperative

effort we have sold three Merlins, one F-27F Executive,

and one Turbo Commander aircraft. We have also sold

various other aircraft, including a new Cessna Golden

Eagle, and now, one of your Gates Learjet products.

We have a Philippine associate company, Aviation

Specialist, Inc., which I personally own, which is com-

pletely staffed and operates localling in the Philippines,

dealing exclusively in aircraft sales and aircraft parts.

We have been successful in developing aircraft

spares sales also, as a result of presently being the only

operation in the Philippines with offices at the airport

hangar area, as well as having offices in San Francisco

with personnel knowledgeable about spares sources,

thereby permitting us to service AOG requirements

better and faster than aryone else in the Philippines.

We will have access to Learjet 36A, Serial No. 36,

as well as the crew and mechanics of that aircraft who

are considered as the cream of the crop in the General

Aviation field in the Philippines. I also have on my staff

as consultant, Capt. Ricardo Tomacruz, formerly a Vice

President and Chief Pilot of the companies of General

Hans Menzi. He has recently left those companies and

is presently associated with me. Your Mr. James Bir

knows Capt. Tomacruz and is familiar with his qualifi-

cations and competence with the Gates Learjet aircraft.

We are certain we can maximize sales of your air-

craft in the Philippines, as we have strong personal con-

tacts with the pilots’ groups as well as the heads of

industry and government, who are the potential buyers

of the aircraft.

32a

Our present forecast is a sale of four Gates Learjet

aircraft in a 24-month period. Furthermore, I have form-

ulated plans related to the sale to the Philippine govern-

ment, and the success of this program would have highly

productive results. This potential sale is in addition to

the four units I have forecast for sale to business and

industry.

We are most anixous to get underway with a sales

program, needing only word from you that we can

actively sell your products in the Philippine market.

We thank you for your past cooperation, and we

look forward to future dealings with your company.

Yours very truly,

James B. Jensen & Co., Inc.

By JAMES JENSEN, JR.

President

33a .

EXHIBIT B

Gates Learjet Export Corporation

p.o. box 11186 tucson, arizona 85734 (602) 294-4422 telex 666408

6 March 1978

Ref.: L-820-03-78-376

Mr. James B. Jensen, Jr.

President

James B. Jensen & Co., Inc.

235 Montgomery Street, Suite 1626

San Francisco, California 94104

Dear Mr. Jensen:

I want to take this opportunity to thank you for the val-

uable help you gave us recently on the sale of Learjet

36A-36.

It was a pleasure for all of us to have you here in Tucson

last week, and to discuss with you how possibly our fu-

ture business may be conducted in the Philippines.

I have read, with interest, your description of your busi-

nesses in the Philippines and California, and your ex-

perience and involvement in various areas of the aviation

industry. Your access to 36A-36, as well as to its pilots

and mechanics, constitutes an important ingredient of a

future Learjet distributorship.

I agree with you that if we go after new business in a

more constructive manner, and challenge Beechcraft

_ domination in the Philippines, we can accomplish much

more than has been accomplished in the past.

34a

A decision relating to the appointment of a distributor

in the Philippines will be made shortly. I promise to be

in touch with you.

Sincerely,

FINN HEDLUND

FIH/de

ce: J. E. Bir

S. W. Blankenship

R. E. Cloughley

J. M. Traisnel

35a

EXHIBIT C

TELEX RCA TELEPHONE

SAN FRANCISCO 276-259 (415) 956-2055

MANILA 722-2087

James B. Jensen & Co., Inc.

IMPORTERS EXPORTERS

735 MONTGOMERY STREET, SUITE 1626

SAN FRANCISCO, CALIFORNIA 94104

March 20, 1978

Gates Learjet Export Corporation

P.O. Box 11186

Tucson, Arizona 85734

Attention: Mr. Finn Hedlund

Vice President Marketing

Dear Mr. Hedlund:

Regarding your request for a Philippine reference

who could attest to our integrity and capability, I will

request Mr. Roberto T. Villanueva, Chairman of the

largest Philippine construction company, A.G.&P., At-

lantic Gulf & Pacific Co. to send you a communication.

He is also the chairman of PDCP, Private Development

Corporation of the Philippines, a large development

bank as well as of BISCOM, Binalbagan-Isabela Sugar

Co., the largest sugar mill in the Far East.

We have known and been associated with Mr.

Villanueva for more than thirty years.

Mr. Villanueva is a fine gentlemen of international

stature who in his ‘ravels has no problems securing ap-

pointments to meet with such people as David Rocke-

feller at Chase Manhattan, Agnelli of Fiat, etc. In the

86a

Philippines, he is well respected as an industrialist,

banker, and economist.

For your information, I sold his sugar mill BISCOM

a new Cessna 421-B Golden Eagle in 1976. This aircraft

is shared by his group of companies and with their ex-

panding construction contracts in Saudi Arabia and the

recent forming of their new company A.G.&P. Saudi, I

have them as a candidate for a Learjet in 1979. Further-

more their chief pilot was hired through my recommen-

dation and enhances my position by having loyal sup-

port from the owners as well as the pilot.

I contacted Mr. Villanueva’s office today and un-

derstand that he is on a short trip but expected to return

sometime next week. He will send you a communication

as soon as he returns.

I am enclosing a brochure of A.G.&P. as well as a

recent annual report.

I can secure other references if necessary, such as

‘Mr. Emilio Abello, Chairman of Manila Electric Com-

pany, the largest Philippine corporation in equity. He

is also Chairman of P.C.I.B., Philippine Commercial and

Industrial Bank, a very large Philippine private com-

mercial bank. Your firm may also contact him directly.

I have prepared my list of prospective Learjet clients

and will provide you complete details when appropriate

including when sales to them can be contemplated. I

will furnish you details on their activities and provide

you their annual report if available. In almost all cases

I have personal contacts with their principal officers as

well as their pilots.

37a

We are ready for an all-out effort to sell and pro-

mote Learjets in the Philippines and need only word

from your company to proceed with my plans. Learjet

36-A S/N 36 will be arriving in Manila this Thursday

and will be of great help in my promotions.

We thank you for your past cooperation and we

look forward to future business with your company.

Yours very truly,

JAMEs B. JENSEN & Co., INc.

JAMES JENSEN, JR.

President

JyJRilja

Encl. as stated

88a

EXHIBIT D

TELE¥Y RCA TELEPHONE

SAN FRANCISCO 278-259 (415) 956-2055

MANILA 722-2097

James B. JENsEN & Co., INc.

IMPORTERS EXPORTERS

735 MONTGOMERY STREET, SUITE 1626

SAN FRANCISCO, CALIFORNIA 94104

May 4, 1978

Mr. Finn Hedlund

Gates Learjet Export Corporation

P.O. Box 11186

Tucson, Arizona 85734

Dear Mr. Hedlund:

Enclosed please find International Distributor

Agreement duly signed, prospect review as well as other

data which you might find of interest.

A spec sheet with prices was given to me by the

chief pilot and head of the aviation department of Ayala

Corporation. This relates to the Citation II which Heli-

Orient has earmarked for their purchase. I have at-

tempted to halt this transaction and have them consider

a Learjet and I have the cooperation of the chief pilot

as well as the corporate finance man but they also tell

me that they are uncertain as to how deeply their presi-

dent has made a verbal commitment. Apparently no ef-

fort had been made by the former Learjet distributor

and I am a bit late but doing my utmost to salvage the

situation. This would normally have a fairly easy sale

as the president of Ayala Corporation, Mr. Enrique Zobel

de Ayala is a proficient pilot.

39a

Re Marinduque Mining, you will find enclosed a

newspaper clipping showing their poor corporate per-

formance for the past two years. Although we know the

chief pilot, we have not been able to contact him as lie

is out of the country. An executive secretary has told us

confidentially that management people have been avoid-

ing meeting with the Cessna people although she men-

tions that some deposit has been made. We will revert

to this shortly but it seems that this company will be out

of the picture related to purchasing an aircraft for a

while.

We are actively promoting the sale of Learjets and

we expect to be able to show some accomplishments in

the very near future.

Sincerely,

JIM JENSEN

JJJR/lja

Encl.

40a

EXHIBIT E

TELEX RCA TELEPHONE

SAN FRANCISCO 278-259 (415) 956-2055

MANILA 722-2097

James B. JENSEN & Co., Inc.

IMPORTERS EXPORTERS

735 MONTGOMERY STREET, SUITE 1626

SAN FRANCISCO, CALIFORNIA 94104

May 19, 1978

Mr. Finn Hedlund

Gates Learjet Export Corporation

P.O. Box 11186

Tucson, Arizona 85734

Dear Mr. Hedlund:

You will find enclosed a copy of list of corporations

as well as chief executives or aviation department heads

who we feel should be sent a copy of Contrails. We have

sent a copy of this list to Mr. Dave Wodraska.

Also enclosed is a copy of letter sent me by Ricardo

Tomacruz regarding follow up on prospective Learjet

customers. We will continue to explore how to discour-

age Col. Zobel from continuing with taking delivery on

the Citation II and hope that there might be a long delay

in meeting deliveries which would enable him to back

out from his commitment. To my knowledge, no money

has yet changed hands.

We will continue to provide you with up to date

information and we hope that we will have news of a

better nature in the very near future.

Sincerely,

JAMES JENSEN, JR.

JJJR/lia

P.S. I am returning the blue copy of the International Distrib-

tor Agreement with my initials affixed per your request. Many

thanks.

4la

EXHIBIT F

TELEX RCA TELEPHONE

SAN FRANCISCO 278-259 (415) 956-2055

MANILA 722-2097

James B. JENsEN & Co., INc.

IMPORTERS EXPORTERS

735 MONTGOMERY STREET, SUITE 1626

SAN FRANCISCO, CALIFORNIA 94104

May 22, 1978

Mr. Finn Hedlund

Gates Learjet Export Corporation

P.O. Box 11186

Tucson, Arizona 85734

Dear Mr. Hedlund:

You will find enclosed our confidential list of pro-

spective Learjet clients in the Philippines. Some on this

list are prospects with a potential for making an immedi-

ate purchase whereas others are potential buyers within

two or three years. In other words, this list covers pro-

spective purchasers for the coming three to five years;

there should be very few companies or individuals com-

ing up in the near future who could be added to this

list.

Our marketing program is geared to interesting

these companies or individuals into purchasing a Learjet

as management tools or for whatever purpose it might

suit them.

As the interest in their possibly purchasing a Lear-

jet increases, we will keep you informed so that we can

maximize our efforts towards an eventual sale.

42a

We trust that this list will provide you with an

accurate evaluation of the potential of the Philippine

market. Bear in mind, however, that the continued

growth of the local economy is essential towards the

success of marketing the Learjets in, the Philippines and

we do hope that we will be blessed with those neces-

sary ingredients.

We thank you for your past cooperation and your

faith in us, and we look forward to many years of fruit-

ful cooperation.

Sincerely,

JAMES JENSEN, JR.

JJJR/lja

43a

EXHIBIT G

TELEX RCA TELEPHONE

SAN FRANCISCO 278-259 (415) 956-2055

MANILA 722-2097

James B. Jensen & Co., Inc.

IMPORTERS EXPORTERS

735 MONTGOMERY STREET, SUITE 1626

SAN FRANCISCO, CALIFORNIA 94104

May 25, 1978

Mr. Stanley W. Blankenship

Gates Learjet Corporation

Mid-Continent Airport

P. O. Box 1280

Wichita, Kansas 67201

Dear Stanley:

Enclosed you will find copies of the pictures I took

of your Learjet stand during your recent visit to Manila.

I am also enclosing a copy of a recent letter I sent

Mr. Finn Hedlund regarding the status of the Philippine

market as well as a list of prospective clients with whom

we have or will be exerting sales efforts.

We enjoyed working together with you and I per-

sonally value the fact that I found a friend in the Learjet

family.

Sincerely,

JAMES JENSEN, JR.

44a

EXHIBIT H

LEARJET / PHILIPPINES, INC.

prescon strata 100 bldg., suite 10h, emerald ave., pasig,

metro manila, Philippines

tel. 693-4259 or 693-4260 °* telex (RCA) 722-2097

16 December 1980

MR. PHIL LOVETT

Senior Vice-Pres., Marketing

Gates Learjet Export Corporation

P. O. Box 1186

Tucson, Arizona 85734

Dear Mr. Lovett:

We are in receipt of your letter of December 1,

1980, and noted your request extending the 1980 Inter-

national Distributors Agreement with GLEC from its

current expiration date until April 30, 1980.

Mr. James Jensen, Jr., is presently on a South East

Asian tour and will be proceeding from Hong Kong to

San Francisco for the christmas holidays to visit his

mother. Upon his return we shall transmit our formal

conformity with his signature, as stated in your letter.

May we reiterate our standing request to expedite

mail to us that “All correspondence and brochures should

be marked — HOLD FOR THE POUCH TO THE

PHILIPPINES — and be sent to the following address:

45a

LEARJET PHILIPPINES, INC.

c/o James B. Jensen & Co., Inc.

235 Montgomery St., Suite 1626

San Francisco, California 94104

Very truly yours,

LEARJET PHILIPPINES, INC.

RICARDO S. TOMACRUZ

Vice Pres. & Gen. Manager

RST/ngm

NCC hangar, manila domestic airport, manila, philippines

tel. 828-31-32

46a

EXHIBIT I

LEARJET / PHILIPPINES, INC.

prescon strata 100 bidg., suite 10h, emerald ave., pasig,

metro manila, Philippines

tel. 693-4259 or 693-4260 * telex (RCA) 722-2007

12 October 1978

Mr. D. B. Norton, Vice President, Product Support

Gates Learjet Corporation

P. O. Box 7707

Wichita, Kansas 67277

Dear Mr. Norton:

I have been informed by our San Francisco office

of JAMES B. JENSEN & CO., INC., that your office has

not yet established a discount policy for our firm.

I wish to request that your firm grant Learjet Philip-

pines, Inc. and our U.S. affiliate company James B. Jen-

sen & Co., Inc. the customary discounts you normally

extend to your international distributors.

You will find enclosed xerox copy of GLEC info-

gram Ref.: BA-78-78 dated 23 August 1978 referring to

GLEC list of distributors as well as copy of page 6 of that

Infogram referring to our being the distributor for che

Philippines.

You will also find enclosed xerox copy of a request

for bids from James B. Jensen & Co., Inc., ref. ASI-137-9

requesting for a price and delivery on a fuel control

computer.

Please advse if we would be entitled to a discount on

47a

the purchase of this item; also please advise your general

discount schedule on proprietary and non-proprietary

items.

Thank you for your attention to this request.

Yours very truly,

LEARJET PHILIPPINES, INC.

JAMES JENSEN, JR.

President

JJJR/ngm

encl.

NCC hangar, manila domestic airport, manila, philippines

tel. 83-31-32

48a

EXHIBIT J

LEARJET / PHILIPPINES, INC.

prescon strata 100 bidg., suite 10h, emerald ave., pasig,

tel. 693-4259 or 693-4260 * telex (RCA) 722-2097

11 February 1981

Mr. Lawrence McDonough

Gates Learjet Export Corporation

P. O. Box 11186

Tucson, Arizona 85734

Dear Larry:

_ We confirm our telex of February 4, 1981 as follows:

“Your letter November 25, 1980 only received now.

We assure you we would not involve ourselves in

the Hedlund controversy or ble court case be-

tween Gates Learjet H . As your distribu-

tor we value not only the good relationship we have

built but also our dedicated loyalty to the company.

Our letter to Lovett a mere statement of some griev-

ance, definitely not directed against Gates Learjet. |

Past performance will attest we have always exerted .

utmost efforts as distributor. We are committed to

<o the best interest of Gates Learjet. Letter |

0 :

Permit us to elaborate on the transaction of the 35A-

338 which is the crux of our letter to Mr. Lovett.

gr re.

Our 35A-338 slot was made possible thru the kind

assistance of Mr. Hedlund when he visited us in Manila

last August 1979 while still connected with GLEC. We do

not deny that in our dealings with Mr. Hedlund he has

49a

become not only a business associate due to his position

at GLEC but also a personal friend. A copy of our letter

to Mr. Lovett was given him against this background and

there was never the intention of the same being used as

a basis for any action against Gates Learjet.

NCC hangar, manila domestic airport, manila, philippines

tel. 83-31-32

50a

LEARJET / PHILIPPINES, INC.

prescon strata 100 bldg., suite 10h, emerald ave., pasig,

metro manila, Philippines

tel. 693-4259 or 693-4260 ° telex (RCA) 722-2097

Mr. Lawrence McDonough

Gates Learjet Export Corp.

Page2.... (

Except for the unpleasant incident concerning the

338 delivery which we have considered as an isolated

case, we as distributor, have nothing but high praise and

regard in our dealings with Gates Learjet. This attitude

has never been altered. As your distributor, we pledge

to Gates Learjet our loyalty, and will continue to do so,

in order to promote our mutual interests, well-aware that

our previous efforts have been accorded due recognition,

having been cited for outstanding achievement in the

last Distributors conference in September 1980.

We regret the 338 incident which continues to

plague us. Our client who purchased the aircraft has

complained to us in strong terms that they have to date

not been able to place the aircraft in service due to regis-

tration problems still unresr* ved to their satisfaction.

We hope to settle this issue, as the owner is our most

valued client.

We are hopeful that with this communication, all

matters shall have been duly clarified.

May we kindly reiterate our-previous request that

mail for Learjet Philippines be sent to our San Francisco

office, to wit:

5la

LEARJET PHILIPPINES, INC.

c/o James B. Jensen & Co., Inc.

Hearst Building Suite 422

Corner Market St. & Third St.

San Francisco, California 94103

HOLD FOR POUCH TO MANILA, PHILIPPINES

Very truly yours,

LEARJET PHILIPPINES, INC.

JAMES JENSEN, JR.

Pres.dent

JJJR/ngm

cc: Mr. Phil Lovett

NCC hangar, manila domestic airport, manila, philippines

tel. 83-31-32

52a

EXHIBIT K

LEARJET / PHILIPPINES, INC.

prescon strata 100 bldg., suite 10h, emerald ave., pasig,

metro manila, Philippines

tel. 693-4259 or 693-4260 ° telex (RCA) 722-2097

September 28, 1981

Mr. John Benson

Vice-President, International Marketing

Gates Learjet Export Corporation

P. O. Box 11186

Tucson, Arizona 85734

Dear Mr. Benson:

Thank you for your kind courtesies extended me in my

trip to Tucson last September 21, 1981.

With regard to our discussion with you and Mr. Fahey

relative to the Philippine territory, as well as the written

check list given to me, enumerating distributor qualifica-

tion requirements, we wish to assert added data in line

with your requirements and for which we feel qualify

us. We furthermore assert our desire to continuously up-

grade our organization as well as our facilities, not only

to render a more than adequate support for the present

fleet, but also to prepare us for dynamic activity into the

next decade.

As to our marketing activities, we make continuous ef-

forts through personal contacts and brochures to keep

both corporate heads as well as present pilots of turbo-

prop aircraft informed of the capabilities and cost effec-

tiveness of Learjet aircraft. On the pilot level, we involve

53a

ourselves in the training flights of present Learjets, such

as operations into a short, high altitude airport for pur-

poses of constant development of pilot proficiency. On

such training flights, we often times invite particular

turboprop pilots to be on board as a means of creating

insider support from among the professional pilot group.

Our Mr. Tomacruz constantly arranges for these types

of activities which contribute to pilot proficiency for

present Learjet pilots and knowledge of product to the

turboprop pilots who will perhaps be the next group of

corporate Learjet pilots.

Besides our corporate offices at the Strata 100 Building

in the Ortigas Commercial Center, we have facilities at

NCC hangar at the Manila Domestic Airport area where

we also base our two full-time mechanics, one of whom

has a substantial experience in Learjet aircraft and pos-

sesses both a Philippine CAA license as well as an Ameri-

can FAA license as per enclosed bio-data.

In the field of spares support, Learjet Philippines as well

as its U. S. purchasing arm, James B. Jensen & Co., Inc.,

purchased directly from Gates Learjet Corporation

spares in the amount of U. S. dollars $75,544.68 in 1980

and $131,141.61 to date in 1981, all for its account in

support of the Philippine fleet.

We have submitted the mechanics of the Forward Order

Program to our Philippine attorneys for comment as to

compliance with the laws of the Republic of the Philip-

pines as regards to foreign exchange, and we will revert

as soon as they answer.

We welcome Mr. Michael Fahey to visit with us for

constructive talks on his next trip to our part of the world,

54a

and we look forward to a strengthening of ties to the

benefit of our respective companies.

Yours very truly,

LEARJET PHILIPPINES, INC.

By JAMES JENSEN, JR.

President

JJJr/\ja

ce: Mr. B.S. Stillwell, General Manager

Encl. as stated

NCC hangar, manila domestic airport, manila, philippines

tel. 83-31-32

55a

EXHIBIT L

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

GATES LEARJET

CORPORATION and

GATES LEARJET EXPORT

CORPORATION

)

)

)

) NO. CIV 82-139-

Plaintiffs, ) TUC-ACM

VS. ) AFFIDAVIT

JAMES B. JENSEN, JR.; ) INSUPPORT OF

RICARDO TOMACRUZ; ) PLAINTIFFS’

2

)

4

=

)

)

)

LEARJET PHILIPPINES, INC., ) RESPONSE Ny

a coporation; MOTION TO

JAMES B. JENSEN & CO., INC DISMISS

a corporation;

HAMIX INTERNATIONAL

LTD., a corporation

Defendants.

LAWRENCE MCDONOUGH, of lawful age and

being first duly sworn upon his oath, states:

I am the Secretary and General Counsel of Gates

Learjet Corporation and I am thereby authorized to

make this Affidavit on behalf of Gates Learjet Corpora-

tion.

I am personally familiar with JAMES B. JENSEN,

JR. and I know of my own personal knowledge that MR.

JENSEN has visited Gates Learjet’s marketing facilities

and manufacturing plant located on the Tucson Inter-

national Airport in Tucson, Arizona, on many occasions

for the purposes of transacting business with Gates Lear-

jet Corporation within the state of Arizona.

56a

In the spring months of 1978, MR. JAMES B. JEN-

SEN, JR. conducted negotiations with various Gates

Learjet personnel at the Gates Learjet marketing head-

quarters at 6868 South Plumer in Tucson, Arizona, in

order to obtain Gates Learjet’s appointment of MR.

JENSEN and his Philippine corporation, LEARJET

PHILIPPINES, INC., as Gates Learjet’s distributor for

the country of the Republic of the Philippines. There-

after, MR. JAMES B. JENSEN, JR. attended and par-

ticipated in Gates Learjet Corporation’s annual distribu-

tor conferences held at the Westward Look Resort in

Tucson, Arizona, in September of 1978, September of

1979, and September of 1980. During such conference

meetings, MR. JENSEN took part in discussions involv-

ing Gates Learjet Corporation personnel and personnel

from various other Gates Learjet Corporation’s distribu-

tors worldwide about Gates Learjet’s products, methods

of business, and methods of distribution of its product.

MR. JENSEN also attended and took part in various

social functions surrounding those distributor con-

ferences.

On various occasions during 1978, 1979 and 1980,

MR. JAMES B. JENSEN, JR. visited various Gates Lear-

jet Corporation personnel at Gates Learjet Corporation's

marketing headquarters and the manufacturing plants

located on the Tucson International Airport at Tucson,

Arizona, for the purpose of negotiating the purchase of

Learjet aircraft, for the purpose of accepting delivery of

such aircraft, and for the purpose of negotiating terms

and conditions under which he would continue to serve

as a Gates Learjet Corporation international distributor.

57a

FURTHER affiant saith not.

LAWRENCE MCDONOUGH

SUBSCRIBED AND SWORN to before me

this 16th day of April, 1982.

DIANE SLAUGHTER

Notary Public

My Commisson expires: July 12, 1985

58a

APPENDIX C

Gary F. Howard

MOLLOY, JONES, DONAHUE, TRACHTA,

CHILDERS & MALLAMO, P.C.

2200 Arizona Bank Plaza

33 North Stone Avenue

Post Office Box 2268

Tucson, Arizona 85702-2268

Telephone: (602) 622-3531

Attorneys for Defendants/Counterclaimants

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

GATES LEARJET

CORPORATION and

GATES LEARJET EXPORT

CORPORATION,

Plaintiffs, ) NO. CIV 82-139

vs. TUC-ACM

JAMES B. JENSEN. JR.; et al., ) REPLY

Defendants. MEMORANDUM

JAMES JENSEN, JR.; et al., RE MOTION TO

: ISMISS

Counterclaimants,

vs.

GATES LEARJET

CORPORATION; et al.,

Counterdefendants.

i

COME NOW Defendants/Counterclaimants, and

for their Reply Memorandum regarding the Motion to

Dismiss, submit the following:

59a

MEMORANDUM OF POINTS AND AUTHORITIES

As was said in the original Motion to Dismiss,

Counterclaimants cannot force Counterdefendants to

agree to litigate the Philippine-related claims in the

Philippines. The Court may, on its own motion, be able

to do that. But for purposes of this Memorandum, we

will only discuss the Plaintiffs’ claims against the De-

fendants. When the Court looks at the location of the

witnesses on those claims, the issue of what law will be

applied and the basic question of where those claims

can most fairly and expediently be litigated, it would

be unfair to suggest that the trial take place anywhere

but the Philippines.

Before getting to those issues, though, Defendants

would like to address the question of the current political

situation in the Philippines. The dismissal contemplated

by Defendants (and based on this Court's citation of

Cheng v. Boeing, the Court 1s thinking along these lines

as well) is a conditional dismissal. If the system of civil

law in the Philippines deteriorates to the point that a

trial cannot be had, then this Court can once again take

jurisdiction of the claims Defendants do not, by making

the suggestion, waive their objections to the exercise of

this Court’s jurisdiction over their persons. Defendants

only mean that since the dismissal would be conditional,

if Plaintiffs are dissatisfied with the progress they are

making toward getting the case to trial in the Philippines,

they can ask this Court to set aside the dismissal. That

does not mean that this Court will somehow acquire

jurisdiction over the persons of the Defendants that it

did not otherwise have. The exercise of jurisdiction over

the Defendants will still be governed by the principles of

International Shoe Co. v. State of Washington, 326 U.S.

310, 66 S.C. 154, 90 L. Ed. 95 (1945)

60a

Plaintiffs stated in paragraphs I, II and III of their

Opposition that Plaintiffs are residents of Arizona and

their choice of forum is Tucson, Arizona; that Plaintiffs

are doing business in Arizona, and that Arizona law

applies.

Plaintiffs are foreign corporations authorized to do

business in Arizona. However, Defendants/Counter-

claimants contend that as part of the daily business

activity of Plaintiffs, Plaintiffs by their own choosing

enter into contratcual agreements with various countries

throughout the world in order to promote and sell their

product — Learjets. As part of that promotion, Plaintiffs

enlist the assistance internationally by way of distribu-

torship agreements. These contractual agreements are

known as “International Distributor Agreements”.

Attached hereto as Exhibit “A” is a copy of a letter

dated December 10, 1979, to James Jensen, Jr., forward-

ing for review and execution of the 1980 International

Distributor \Agreement, which was executed in the

Philippines ky Mr. Jensen, forwarded to GLC/GLEC

and copy retirned by mail to Mr. Jensen, as shown in

the attached letter dated March 25, 1980 (see attached

Exhibit “B”). *

Defendants/Cotaterclaimants do not disagree that

Arizona laws spl mat least one of the Plaintiffs’

claims (the breach of contract ). But Defendants suggest

that Arizona law can be amiel in the Philippines, just

as easily, as Philippine law as to Plaintiffs’ other claims

(e.g. interference with contractual-relations) can be

applied here. The law does not support Plaintiffs’ argu-

ment on “choice of law.” In Piper Aircraft Company v.

Reyno, 454 U.S. 235, 102 S. Ct. 252, 70 L. Edx2d ag £

ee

6la

(1981), the Supreme Court found that even though

Scottish law may apply and may even have been less

favorable to plaintiff, the District Court did not err in

dismissing the matter under the doctrine of forum non

conveniens.

A trial in Tucson would not be convenient for

Defendants. Defendants/Counterclaimants have com-

municated with their counsel primarily through a telex

service and/or long distance phone calls. Numerous

affidavits have been secured through the Embassy of

the Philippines and filed with this Court. In addition,

Defendants/Counterclaimants have secured counsel in

the Philippines in order to depose Messrs. Franco, Polo-

tan, Rivera and Marcelo, all at considerable expense.

Plaintiffs have inundated Defendants/Counter-

claimants with discovery motions and various pleadings,

and when it became difficult to obtain the information

requested, Plaintiffs would file then another motion to

compel and/or ask for sanctions, knowing that counsel

for Defendants/Counterclaimants would have a diffi-

cult time in securing documentation, etc. While all docu-

mentation was readily accessible to GLC/GLEC, the

problem for Defendants/Counterclaimants’ counsel com-

municating in excess of some 6,000 miles became quite

a task for Defendants/Counterclaimants counsel. Upon

receipt of documentation, if any questions were to be

asked, it would have to be done either by long distance

call and/or telex service. Information, witnesses and veri-

fication through the Embassy was not easily accessible

for Defendants/Counterclaimants’ counsel.

Some of the private interests factors in determining

whether or not a case should be dismissed on grounds

62a

of forum non conveniens include relative ease of access

to sources of proof, availability of compulsory process

for attendance of unwilling and the costs of obtaining

attendance of willing witnesses, Cheng v. Boeing Co.,

708 F.2d 1406, 1410 (9th Cir. 1983).

The greater bulk of witnesses and exhibits are not

located in the United States. All alleged acts actually

occurred in the Philippines, with the exception of Count

V of Defendants/Counterclaimants’ Counterclaim. In

their opposition, Plaintiffs set forth a “Witness List’;

however, Defendants/Counterclaimants ask that the

Court look to the Plaintiffs claims against the Defend-

ants and where all the witnesses on those claims are

located. Plaintiffs have omitted a number of witnesses

listed in their answers to non-uniform interrogatories,

to-wit:

1. General Ferdinande Marcos, Presidential Pal-

ace, Philippines, who will testify as to the reputation

and standing of LPI and its principals.

2. Mrs. Monlopaz, Manila, Philippines, will testify

as custodian of records for LPI and related matters.

3. Ruben Roya, employee of LPI, will testify as to

work he did, pay he received, expenses incurred and

related matters.

4. Mr. Justimanio, employee of LPI will testify as

to work he did, pay he received, expenses incurred and

related matters.

5. Renairio Paras, employee of LPI, will testify

as to work he did, pay he received, expenses incurred

and related matters.

63a

6. Rolando Alipio, employee of LPI, will testify

as to work he did, pay he received, expenses incurred

and related matters.

7. Benedicto Corpus, employee of LPI, will testify

as to work he did, pay he received, expenses incurred

and related matters.

8. General Menzi, Manila, Philippines, will testify

as to the intereference of the sale of a Learjet (See

attached Exhibits “C” through “H”. )

All alleged acts of trademark enfringement and

interference of contractual relations occurred in the

Philippines, and most all witnesses that will testify to

the alleged enfringement and interference are in the

Philippines, and most all witnesses that will testify to

Counterclaimants interrogatories dated March 11, 1983,

Plaintiffs stated in their response to Interrogatory No. 3,

attached hereto as Exhibit “H”, that Jensen, Tomacruz

and LPI continued to use the tradename Learjet. Plain-

tiffs went on to further state “from their present infor-

mation”, which can only mean they had to depend on

Philippine sources for this information, and not from

any information received in the United States. If a con-

spiracy even existed, it existed in the Philippines and

any alleged interference with Plaintiffs’ contractual re-

lationship is going to be tried under Philippine law.

As a further reason opposing dismissal, Plaintiffs

attempt to try and use their own wrongdoing with the

legal authorities in the Philippines to their advantage.

If one travels to a foreign country and breaks that coun-

try's law, one must expect to bear the consequences of

that country’s jurisdiction. It is reasonable to assume

64a

that, if Plaintiffs go into the Philippines or any other

country and obey its laws, they will be treated as any

other citizen of that country. Plaintiffs’ raising of this

issue is without merit in that that incident has nothing

whatsoever to do with the issues before this Court and

those claims were dismissed by this Court.

Plaintiffs refer to a waste of litigation resources.

Plaintiffs remarks are without justification. Since (a)

all but one of the witnesses on Plaintiffs’ Complaint are

really located in the Philippines, (b) the alleged acts

occurred in the Philippines, (c) Plaintiffs, as part of

their daily business, chose to promote their product —

Learjets — internationally, it is not unreasonable to have

the triai of their claims take place in the Philippines.

Plaintiffs also allege that at the very least one of

their attorneys would have to go to the Philippines for

an extended period of time and, further, that all exhibits

are contained in Tucson, Arizona, and Kansas. This

hardly seems accurate since GLC/GLEC already have

counsel in the Philippines who were present during the

Franco, Rivera, Polotan and Marcelo depositions. All

documentation provided by Defendants/Counterclaim-

ants were derived from the files of Defendants/Counter-

claimants located in the Philippines. Even as early as

December 16, 1981 (two months prior to Plaintiffs filing

this lawsuit), Plaintiffs were informed by Rolando Mos-

cardon via telex that:

“.. . I strongly recommend that lawyers with real

clout be hired to work with, if not take over from

Celso [GLC’s then counsel in the Philippines].

While everyone feels you will eventually win both

65a

cases, delays that other side seems easily able to

obtain from the court would cause you more dam-

age.

Apparently even Moscardon, (who claims he was not

appointed the Learjet distributor until October 1982,

yet acted under an implied agreement,) felt Plaintiffs

would win in the Philippines if lawyers with “real clout”

were hired (see attached Exhibit “I’).

Defendants/Counterclaimants have never agreed

and do not now agree that this Court has jurisdiction

over their person to hear Plaintiffs’ claims against them.

Therefore, if.this Court were to grant this Motion to

Dismiss on the grounds of forum non conveniens, the

Plaintiffs would not really be losing that much. It is not

at all clear that Plaintiffs will be able to convince the

Court that the evidence at trial supports the exercise

of jurisdiction over the person of even LPI, but there is

certainly only the flimsiest evidence, if any, to support

the exercise of jurisdiction over the persons of Messrs.

Tomacruz and Jensen and Hamix International, Ltd. So,

dismissal on the grounds of forum non conveniens may

really be nothing more than bowing to the inevitable.

SUMMARY

The Plaintiffs’ Complaint against Defendants should,

by every test applicable, be tried in the Philippines. If

it is Plaintiffs’ wish that the Counterclaims all be tried

in Arizona without the unnecessary delay and confusion

caused by being intermingled with Plaintiffs’ Complaints,

then Plaintiffs may be entitled to have the Counter-

claims tried here. That is more an issue between Plain-

tiffs and the Court. Counterclaimants really have no

66a

right to insist that Counterdefendants submit themselves

to the jurisdiction of the courts of the Philippines.

Respectfully submitted this 14th day of October,

1983.

MOLLOY, JONES, DONAHUE,

TRACHTA, CHILDERS &

MALLAMO, P.C.

By GARY F. HOWARD

Attorneys for

Defendants/Counterclaimants

COPY of the foregoing Reply Memorandum re

Motion to Dismiss mailed/delivered this

14th day of October, 1983, to:

William H. Tinney, Esq.

BILBY, SHOENHAIR, WARNOCK

& DOLPH, P.C.

Post Office Box 871

Tucson, Arizona 85702

Attorneys for Plaintiffs/C ounterdefendants

Gates Learjet Corporation and

Gates Learjet Export Corporation

67a

EXHIBIT A

Gates Learjet Export Corporation

p.o. box 11186 tucson, arizona 85734 (602) 294-4422 telex 666408

Mr. James Jensen, Jr., President

LEARJET PHILIPPINES, INC.

Prescon Strata 100 Building, Suite 10-H

Emerald Avenue, Pasig

Metro Manila, Philippines

Dear Mr. Jensen:

I am pleased to forward for your review and execution

the International Distributor Agreement for 1980.

In the Agreement, please do not overlook Article IV,

Ownership and Management, which must be filled in.

As you know, the “Amendment to the International Dis-

_tributor Agreement” deals with the rules that apply in

the event a new aircraft is resold within the six (6)

month period following its delivery by Gates Learjet

Corporation or Gates Learjet Export Corporation. If the

Amendment is not returned to us with an indication of

either acceptance or rejection, it will be deemed to have

been rejected. In other words, you will not get the bene-

fits of this amendment unless you write in “Accepted”

and sign it.

As for the Distributor Business Plan for 1980, please

provide as many details as possible to enable us to

properly understand your plans for 1980 in the territory

for which you are responsible.

Attachments “A” and “B” set the quota and the minimum

number of sales personnel deemed necessary for your

68a

territory. Please note that for 1980 the quota includes

the 50 Series aircraft.

Please return original and copy of the Distributor Agree-

ment, properly signed, as well as the applicable attach-

ments so that I may sign and return your copy to you.

We are looking forward to working with you and trust

1980 will be a successful year for your company and ours.

Sincerely,

FIH:cl

Enclosures:

International Distributor Agreement — Original and Copy

Amendment to International Agreement — Original and Copy

Distributor Business Plan -— Original and Copy

Attachment “A” and “B” — Original and Copy

69a

EXHIBIT B

Gates Learjet Export Corporation

p.o. box 11186 tucson, arizona 85734 (602) 294-4422 telex 666408

EXHIBIT 6

March 25, 1980

Mr. James Jensen, Jr.

Learjet Philippines, Inc.

235 Montgomery Street, Suite 1626

San Francisco, CA 94104

Dear Mr .Jensen:

We are pleased to return your executed copy of the

International Distributor’s Agreement for 1980.

We are looking forward to working with you and trust

that 1980 will continue to be a successful year for your

company and ours.

Sincerely yours,

J. M. Traisnel

Manager Administration

International Marketing

njp

Enclosure

70a

EXHIBIT C

g. Ruben Roya, employee of Learjet Philippines.

Will testify as to work he did, pay he received, expenses

incurred, and related matters.

h. Colonel Mendaro, employee of Learjet Philip-

pines. Will testify as to work he did, pay he received,

expenses incurred, and related matters.

i. Mr. Justimanio, employee of Learjet Philippines.

Will testify as to work he did, pay he received, expenses

incurred, and related matters.

j. Renairio Paras, employee of Learjet Philippines.

Will testify as to work he did, pay he received, expenses

incurred, and related matters.

k. Rolando Alipio, employee of Learjet Philip-

pines. Will testify as to work he did, pay he received,

expenses incurred, and related matters.

]. Benedicto Corpus, employee of Learjet Philip-

pines. Will testify as to work he did, pay he received,

expenses incurred, and related matters.

m. David Crompton, principal of Stillwell Avia-

tion. Will testify as to Stillwell Aviation’s after sale sup-

port facilities, lack of involvement of B. S. Stillwell and

Stillwell Aviation lack of jurisdiction over Stillwell Avia-

tion, and related matters.

n. Tinsay, General Manager of Judatin Training.

Will testify as to reputation of Learjet Philippines and

its principals, and related matters.

Dated this 24th day of May, 1983.

Exhibit C Plaintiffs Supplement Answers to Defend-

ants 1st Set of Interrogatories dated Mar. 24, 1983.

Tla

EXHIBIT D

Plaintiffs, pursuant to Rule 26 of the Federal Rules

of Civil Procedure, hereby supplement its answers to

Defendants Non-Uniform Interrogatories (1st Set) as

follows:

The address of all Gates Wichita employees hereto-

fore identified is Post Office Box 7707, Wichita, Kansas

67277, 8220 West Harry, Wichita, Kansas 67209. Any of

these witnesses will be made available to Defendants for

the purposes of deposition without the necessity of sub-

poena upon reasonable notice to Plaintiffs’ counsel.

The addresses of all the Philippine witnesses are in

Defendants’ possession and most of them are subject to

a Court Order requiring Defendants to disclose them to

Plaintiffs. If this is not the case, Plaintiffs will be happy

to attempt to determine the address of any witnesses

which does not fall within that category.

Michael Fahey, John Benson, and Marge Taylor

are Gates employees located at 6868 South Plumer in

Tucson, Arizona. Larry McDonough and Bib Stillwell

are Gates employees located at 7777 Old Nogales High-

way, Tucson, Arizona.

Mike Menardo is an ex-Gates employee currently

living at 2601 Ashe, Apartment 501, Bakersfield, Cali-

fornia 93309.

Lewis Jones is an ex-Gates employee currently

located at Cooper Laboratories, Inc., Corporate Flights

Operation Department, 222 East Carillo, Suite 300,

Santa Barbara, California 93401. ,

72a

R. E. Claughley is an independent consultant who

can be reached at Combs-Gates Denver, Stapleton Inter-

national Airport, Denver, Colorado 80207.

Exhibit D Plaintiffs Supplemental Answers to De-

fendants Ist Set of Interrogatories dated 6/21/83.

73a

EXHIBIT E

Plaintiffs, pursuant to Rule 26 of the Federal! Rules

of Civil Procedure, hereby supplement its answers to

Defendants Non-Uniform Interrogatories (1st Set) as

follows:

2. a. General Ferdinand Marcos, Presidential Pal-

ace, Manila, Philippines. Will testify as to the reputation

and standing of Learjet Philippines and its principals,

and related matters.

b. George Kriss, Gates Learjet Tucson. Kriss is

the pilot who flew from San Francisco to Honolulu in

a 55 series Gates Learjet. He will testify as to the long

range capabilities of these planes, and related matters.

c. James S. Mederios, Gates Learjet Tucson —

Senior Vice President in charge of product support

service. Will testify as to after sale plane support require-

ments for Gates Learjets, and related matters.

d. Ray Pahls, Gates Learjet Tucson — Manager of

service facilities. Will testify as to after sale claim sup-

port requirements for Learjets, and related matters.

e. Rolando Moscardon, Manila, Philippines, Lear-

jet Philippines’ successor (Western Pacific Aviation Cor-

poration ). Will testify as to Philippine market for busi-

ness jets, after sale support policy of Gates Learjet Ex-

port Corporation, reputation of Learjet Philippines and

its principals, Learjet Philippines intereference with sale

of Learjets, and related matters.

f. Mrs. Monlopaz, Manila, Philippines. Will testify

as custodian of records for Learjet Philippines, Inc. and

related matters.

Exhibt E (2 pages) Plaintiffs Supplement Answers

to Defendants Interrogatories (Ist Set).

74a

g. Ruben Roya, employee of Learjet Philippines.

Will testify as to work he did, pay he received, expenses

incurred, and related matters.

h. Colonel Mendaro, employee of Learjet Philip-

pines. Will testify as to work he did, pay he received,

expenses incurred, and related matters.

i. Mr. Justimanio, employee of Learjet Philippines.

Will testify as to work he did, pay he received, expenses

incurred, and related matters.

j. Renairio Paras, employee of Learjet Philippines.

Will testify as to work he did, pay he received, expenses

incurred, and related matters.

k. Rolando Alipio, employee of Learjet Philip-

pines.. Will testify as to work he did, pay he received,

expenses incurred, and related matters.

1. Benedicto Corpus, employee of Learjet Philip-

pines. Will testify as to work he did, pay he received,

expenses incurred, and related matters.

m. David Crompton, principal of Stillwell Avia-

tion. Will testify as to Stillwell Aviation’s after sale sup-

port facilities, lack of involvement of B. S. Stillwell and

Stillwell Aviation, lack of jurisdiction over Stillwell Avia-

tion, and related matters.

n. Tinsay, General Manager of Judatin Training.

Will testify as to reputation of Learjet Philippines and its

principals, and related matters.

Dated this 24th day of May, 1983.

Exhibit ___._ (2 pages) Plaintiffs Supplemental

Answers to Defendants Interrogatories (1st Set)

2.

75a

EXHIBIT F

Identify (ref to introductory definitions for in-

formation you must supply to identify a person ) all other

witnesses, who, it is contemplated, may or will be called

upon to testify in this action.

—

wm 2S

— ht

ao - Ow

rr ST PCP FP FP F

Michael Fahey.

Lewis Jones.

Mike Menardo.

Larry McDonough.

Bib Stillwell.

John Benson.

Finn Hedlund.

Ricardo Tomacruz.

James B. Jensen, Jr.

Defendants Philippine attorneys.

Quasha/Marcos ( plaintiffs’ Philippine

attorneys ).

De las Alas.

Antonio O’'Campo, Financial Center Manila.

Such other witnesses as a continuing

investigation will disclose.

(a) The general subject upon which each such

person will testify; Witnesses numbered 1, 4, 10 and 13

will testify as to corporate damage, and the attachment

of the airplane in the Philippines. Witnesses numbered

5 and 6 will testify as to telephone conversations with

De las Alas and Quasha regarding the attachment in the

Philippines and as to corporate damage. They will also

76a

testify as to distributorship agreements, company policy

as to same, and other topics involving plaintiff's corpor-

ate matters. Witnesses numbered 2 and 3 will testify as

the attachment of the plane in the Philippines and as to

corporate damage. Witness number 7 will testify as to

topics unknown at this time. Witnesses number 8, 9 and

11 will testify as to their role in the Philippine attach-

ment and judicial proceeding, as well as the trademark

enfringement, breach of contract and abuse of contract

counts of this Complaint. Witnesses number 12 and 14

will testify as to corporate damage. Witnesses number 1,

4, and 10 will testify as to Gates Learjet distributorship

agreements, corporate policy as to same, and general

corporate matters.

(b) State the relationship, if any, of each witness

to you; Witnesses numbered 1, 2, 3, 4, 5, and 6 are em-

ployees of plaintiff. Witness number 7 is an ex-employee

of plaintiff. Witnesses number 8, 9 and 10 are ex-distrib-

utors of plaintiffs. Witness number 9 is a special sales

agent for plaintiffs. Witnesses number 12 and 18 are

Philippine counsel.

EXHIBIT F

77a

EXHIBIT G

Plaintiffs, pursuant to Rule 26 of the Federal Rules

of Civil Procedure, hereby supplement its answers to

Defendants Non-Uniform Interrogatories (1st Set) as

follows:

2. General Hanz Menzi; Bill Vardaman (Gates-

Wichita); and Ambassador Roberto S. Benedicto.

4. (d) Mockups and/or models of Gates Learjet

Model 55, 55 ER, 55LR, 55 XLR and 56.

BILBY, SHOENHAIR, WARNOCK

& DOLPH, P.C.

By MICHAEL J. RUSING

P. O. Box 871

Tucson, Arizona 85702

Attorneys for Plaintiffs

Copy of the foregoing mailed

this 25th day of April, 1983,

to:

Gary F. Howard, Esq.

MOLLOY, JONES, DONAHUE, TRACHTA,

CHILDERS & MALLAMO, P.C.

P. O. Box 2268

Tucson, Arizona 85702

Attorneys for Defendants

Exhibit G Plaintiffs Supplemental Answers dated

April 25, 1983, to Defendants Interrogatories (1st Set).

~~

78a

EXHIBIT H

(b) Identify all documents referring or relating.to

and/or constituting said facts.

Purchase agreement for Hamix.

3. State all facts which form the basis of the alle-

gation in paragraph 17 of your Complaint that “[t]he

defendants ‘Jensen’, “Tomacruz, “Lear Phil’, ‘Jensen,

Inc.’, and ‘Hamix’ conspired to make unauthorized use

of the trade mark and name of the plaintiff, the use of

which tends to delude and confuse the public into be-

lieving that the defendants’ business is in some way

connected with the business of the plaintiff.” As to such

conspiracy, include in your answer, in addition to all

other facts, at least the following details:

Jensen, Tomacruz, and Learjet Philippines con-

tinued to use the name Learjet in litigation, letterhead,

and office identification. From present information, it

appears that Jensen, Tomacruz, and Learjet Philippines

are the co-conspirators.

(a) When the conspiracy was formed;

EXHIBIT H Plaintiffs Answers to Defendants In-

terrogatories dated March 11, 1983.

79a

EXHIBIT I

(APPROXIMATE REPRODUCTION )

LEAR MKTG TUC

ATTN: M. FAHEY

AA — AS STATED ON THE PHONE ANS. BENEDIC-

FD ccctetctremccs AIA PRACTICALLY

ALL ISSUES INCLUDING PRICE

EXCEPT THAT HE IS UNCONVINCED ON

CAPA - OF GLEC TO UICK L

ON SERVICE SUPPORT.

RECOMMEND GLEC MAKING FIRM COM-

MITMENTS ALONG FF. IDEAS THAT WILL

GO WITH DISTRIBUTOR’S OWN COMMIT-

MENTS:

(NOTE: RSB HAS BEEN DISAPPOINTED

WITH SERVICE SUPPORT FOR ANY OF THE

ACFT HE OWNS WHICH INCLUDES KING

AIRS, MERLI___ BELL AND EN ISLANDER

ALSO SEES ABSENCE OF IN-COUNTRY LEAR

SUPPORT. )

1, GLEC TO COMMIT TO SEND ONE EN-

GINEER UPON DELIVERY OF RSB

LEAR FOR PERIOD OF 3 MONTHS TO

ASSIST SETTING UP OF SERVICE CEN-

TER FOR LEARS AND FURTHER TRAIN

DISTRIBUTOR’S MECHANICS

WM GLEC TO HAVE SERVICE REP VISIT

MANILA AT LEAST ONE A YEAR OR

A WEEK OR TWO FOR SERVICE DE-

VELOPMENT.

80a

3. IT WITH TRADERS ROYAL

BANK FOR DISTRIBUTOR’S ACCOUNT

AN AMOUNT OF NOT LESS THAN 50,000

US D AS INITIAL REVOLVING FUND

FOR LC TO COVER URGENT OR AOS

ORDERS FOR PARTS NOT IN DISTRIB-

UTORS STOCK. (I HAVE APPLIED

WITH CB FOR THIS REVOLVING LC

WITH LIMIT OF USD 50,000 PER

MONTH FOR KUSH ORDERS. OFFI-

CIALLY THIS DEPOSIT SHALL BE RE-

PLENISHED BY DISTRIBUTOR FROM

SALES INCOME. PRIVATELY THIS A-

MOUNT MAY BE PROVIDED BY MY

PARTY.

4. GLEC TO COMMIT TO DELIVER WITH-

IN X HOURS FROM RECEIPT ALL UR-

GENT ORDERS (WITH EXCEPTIONS)

PROVIDED RP IMPORT REGULATIONS

ARE SATISFIED BY BUYER OR DIS-

TRIBUTOR.

5. GLEC SHALL SEE TO IT THAT DIS-

TRIBUTOR PARTS STOCKING AND

OTHER SERVICE SUPPORT OBLIGA-

TIONS ARE DULY COMPLIED.

6. ASSURANCE THAT ASSOCIATED SERV-

ICE CENTERS SUCH AS STILWELL IN

AUSTRALIA AND GARROX Q/PRO.4)

TO LEND SUPPORT AND COOPERA-

TION TO THE RP ORGANIZATION.

BB —SUGGEST THAT COMMITMENTS BE SUP-

PORTED WITH BOARD APPROVAL.

8la

CC — SUGGEST PETTY CASH FUND FOR COURT

CASES BE DEPOSITED TEMPORARILY THRU

CITIBANK ACCOUNT NO. 00670677 CITI-

BANK N.A. MAKATI, M.M. OR YOU UTILIZE

FACILITIES OF INA MANILA OFFICE FOR

DISBURSEMENT CONTROL AND ACCOUNT-

ING UPON UR RETURN. MEANWHILE AM

SETTLING ACCOUNTS TO DATE FOR CUS-

TOMS GUARDING ETC.

DD —NOW THAT SUSPICION THAT INFLUEN-

TIAL PEOPLE ARE BEHIND JENSEN/TOMA-

CRUZ IS VALID I STRONGLY RECOMMEND

THAT LAWYERS WITH REAL CLOUT BE

HIRED TO WORK WITH, IF NOT TAKE OVER

FROM, CELSO. WHILE EVERYONE FEELS

YOU WILL EVENTUALLY WIN BOTH CASES,

DELAYS THAT OTHER SIDE SEEMS EASILY

ABLE TO OBTAIN FROM THE COURT

COULD CAUSE YOU MORE DAMAGE. THIS

SITUATION CAN BE NEUTRALIZED BY AN-

OTHER HIGH LEVEL POLITICALLY STRONG

LAW FIRM. WILL SEND IN NAMES WHEN

NEEDED.

R.P. MOSCAR

EXHIBIT I