Harrington et al v. Delta Airlines, Inc. et alMEMORANDUM in Support re MOTION to Dismiss for Lack of JurisdictionD. Mass.September 23, 2005UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS CRAIG BUCK, KENNETH MICCICHE, VALERIE L. PAWSON, CAROLINE MARSHALL-SMITH, WANDA MILLS; JEFF GOLUMBUK, ANESIA KALAITZIDIS, ATHANASE KARAGIORGOS; AND JENNIFER TSOUVRAKAS, on behalf of themselves and others, Plaintiffs, v. ALASKA AIRLINES, AMERICAN AIRLINES, CONTINENTAL AIRLINES, DELTA AIR LINES, INC., NORTHWEST AIRLINES, SOUTHWEST AIRLINES CO., d/b/a SOUTHWEST AIRLINES, CHINA EASTERN AIRLINES CORP. LTD, CHINA SOUTHERN AIRLINES CO. LTD., AER LINGUS LIMITED, ALITALIA-LINEE AEREE ITALINE S.P.A., D/B/A ALITALIA AIRLINES, BRITISH AIRWAYS, PLC, D/B/A BRITISH AIRWAYS, DEUTSCHE LUFTHANSA, A.G., D/B/A LUFTHANSA AIRLINES, OLYMPIC AIRWAYS- SERVICES, SA, D/B/A OLYMPIC AIRWAYS, AIR TRANSPORT ASSOCIATION OF AMERICA, INC., AIRLINES REPORTING CORP., AND THE FEDERAL AVIATION ADMINISTRATION Defendants. : : : : : : : : : : : : : : : : 04 12558 NMG CHINA EASTERN’S MEMORANDUM IN SUPPORT OF ITS MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION --------------------------------------------------------------------x PRELIMINARY STATEMENT Defendant China Eastern Airlines Company Limited (hereinafter “CHINA EASTERN”), by and through its attorneys Campbell, Campbell Edwar s & Conroy and Condon & Forsyth LLP, respectfully submits this Motion and Memorandum of Points and Authorities in support of Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 1 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 1 of 14 2 its motion to dismiss the lawsuit against it for lack of personal jurisdiction pursuant to Fed. R. Civ. Proc. 12(b)(2). FACTS RELEVANT TO JURISDICTION The only plaintiff making an allegation against China Eastern is Jeff Golumbuk. See Original Compl., ¶ 5. Jeff Golumbuk resides in San Diego, California. See Am. Compl., ¶ 18. Jeff Golumbuk alleges that he purchased a nonrefundable ticket on a China Eastern flight in September 2002. See Original Compl., ¶ 5. He alleges that he paid “one r more of domestic or foreign taxes, fees, or charges.” See Am. Compl., ¶ 59. He alleges that he did not use the ticket and that China Eastern failed to refund whatever “domestic or foreign taxes, fees, or charges” he paid in connection with the ticket. See Am. Compl., ¶ 61-2. He further alleges that he suffered monetary damages because the taxes, fees and charges were not refunded to him. See Am. Compl. ¶¶ 82,84,88,91,96, and 104. The only flight purchased by Mr. Golumbuk for travel on China Eastern in September 2002 was from Los Angeles to Beijing, China. SeeAff. of Qian Qiao Yi ¶ 20. The flight was purchased from Holt Travel & Tours which is located in California. See Aff. of Qian Qiao Yi ¶ 21. Holt Travel collected the taxes. Mr. Golumbuk does not allege that he suffered any injury in Massachusetts or that the monetary damages he suffered relate to any contact of China Eastern with Massachusetts. China Eastern is a corporation organized under the laws of China with its principal place of business located in Shanghai, China. SeeAm. Compl. ¶ 32. China Eastern is an airline engaged in international transportation and domestic air transportation within China. See Aff. of Qian Qiao Yi ¶ 4. China Eastern operates no flights to Massachusetts and has never operated flights to Massachusetts. China Eastern has no offices or permanent employees in Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 2 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 2 of 14 3 Massachusetts. China Eastern has no bank accounts in Massachusetts. China Eastern does not advertise in Massachusetts through local newspapers, magazines, radio or television. China Eastern has never owned, rented or leased any property of any kind in Massachusetts. See Aff. of Qian Qiao Yi ¶¶ 5-9, 12. China Eastern does not purchase aircraft or aircraft parts from entities in Massachusetts. China Eastern is not registered to do business in Massachusetts. See Am. Compl., ¶ 32. China Eastern has never had a registered agent in Massachusetts. China Eastern has never had a telephone number, post office box or mail drop in Massachusetts. See Aff. of Qian Qiao Yi ¶¶ 15-17. China Eastern’s only contacts with Massachusetts are vi its website which is accessible worldwide, including Massachusetts, and a contract with a Massachusetts travel agent. SeeAff. of Qian Qiao Yi ¶¶ 18-19. China Eastern has no record of any internet sales to residents of Massachusetts. See Aff. of Qian Qiao Yi ¶ 18. ARGUMENT Standard of Review When a court’s jurisdiction is contested, the plaintiff bears the burden of proving that jurisdiction lies in the forum state. Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995). The plaintiff must make a prima facie showing of personal jurisdiction by demonstrating the existence of every fact required to satisfy both the forum’s long-arm statute and the Due Process Clause of the Constitution. Richards v. Tsunami Softgoods, Inc., 239 F. Supp. 2d 80, 81 (D. Me. 2003). The plaintiff must cite to specific evidenc in the record, and the court must accept the proffered facts as true and view them in the light most favorable to plaintiff. Id. The Court must also consider any uncontested facts put forward by the defendant. Id. Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 3 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 3 of 14 4 Personal Jurisdiction cannot be Maintained over China Eastern under the Massachusetts Long Arm Statute and the United States Constitution Two requirements must be met before a federal court can exercise personal jurisdiction over a defendant. First, a statute must potentially confer a basis for jurisdiction over the defendant, and second, the exercise of jurisdiction must comport with due process. Omni Capital Int’l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987). Federal Rule of Civil Procedure 4(k)(1) establishes a federal court’s territorial limits of effective service. It provides: Service of a summons or filing a waiver of service is ffective to establish jurisdiction over the person of a defendant: (A) who could be subjected to the jurisdiction of a court of general jurisdiction in the state in which the district court is located. Fed. R. Civ. Proc. 4(k)(1)(A).1 Federal courts look to the long-arm statute of the state in which they sit to provide authority for service of process on and jurisdiction over the defendant. See United States v. Swiss Amer. Bank, Ltd., 191 F.3d 30, 37 (1st Cir. 1999). The Massachusetts Long-Arm Statute, Mass. Gen. Laws ch. 223A, § 3, does not provide a basis for jurisdiction over China Eastern.2 Massachusetts Long-Arm Statute The Massachusetts Long-Arm Statute provides eight separate grounds for the exercise of personal jurisdiction by Massachusetts courts, § 3(a)-(h).3 None of those grounds are applicable 1 Only 4(k)(1)(A) is relevant to this case. 2 In cases of specific jurisdiction, the Massachusetts Long-Arm Statute has been interpreted to allow jurisdiction up to the constitutional limit. However, on its face, the statute is more restrictive in regard to general jurisdiction. Therefore, an analysis of the Massachusetts Long- Arm Statute is necessary here. 3 The relevant sections of the Massachusetts Long Arm Statute are: § 3. Personal Jurisdiction Based Upon Acts or Conduct Within Commonwealth. Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 4 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 4 of 14 5 here. Subsection (a) provides jurisdiction if the cause of action arises from the defendant’s transacting any business in Massachusetts. However, it is inapplicable because Mr. Golumbuk’s claim does not arise out of or relate to the transaction of business in Massachusetts by China Eastern, nor does he even allege that it does. To “arise from” a defendant’s transacting business in Massachusetts, a plaintiff’s cause of action must show that but for the defendant’s contacts with Massachusetts, the injury would not have occurred. See Sheridan v. Ascutney Mountain Resort Servs., 925 F. Supp. 872, 877 (D. Mass. 1996) (following the “but for” rule to determine if a cause of action arises from the transaction of business in the forum by the defendant). Mr. Golumbuk’s alleged injury is monetary, that is, the failure to receive a refund of fees and taxes he allegedly paid. SeeAm. Compl. ¶¶ 82,84,88,91,96, and 104. China Eastern’s only contacts with Massachusetts are via its website which is accessible worldwide, including Mass chusetts, and a contract with a Massachusetts travel agent. See Aff. of Qian Qiao Yi, ¶¶ 18-19. However, Mr. Golumbuk (a California resident who purchased his ticket from a California Travel & Tours company) does not allege that he purchased the ticket (1) over th internet while in Massachusetts, or (2) through a Massachusetts travel agent. Thus, Mr. Golumbuk’s injury would have occurred whether or not A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's (a) transacting any business in this commonwealth; (b) contracting to supply services or things in this commonwealth; (c) causing tortious injury by an act or omission in this commonwealth; (d) causing tortious injury in this commonwealth by an act or omission outside this commonwealth if he regularly does or solicits busine s, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this commonwealth; Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 5 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 5 of 14 6 China Eastern had any of the abovementioned contacts with Massachusetts. Mr. Golumbuk’s claim does not arise from China Eastern’s transaction of business in Massachusetts and subsection (a) does not apply. Subsection (b) does not apply because Mr. Golumbuk’s claim does not involve contracting “to supply services or things” in Massachusetts, but rather a contract for transportation between Los Angeles, California and China. Subsection (c) does not apply because the alleged injury suffered by Mr. Golumbuk is not alleged to have been caused by any act of China Eastern in Massachusetts. Subsections (e)-(h), which cover interests in real property, insurance, and domestic relations issues respectively, do not apply in this case. Subsection (d) provides jurisdiction over acts committed outside of Massachusetts if the cause of action arises from the defendant’s causing tortious injury in Massachusetts if the defendant “regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this commonwealth.”4 See also United States v. Swiss Amer. Bank, Ltd., 191 F.3d at 37. Mr. Golumbuk has not alleged that China Eastern caused a tortious injury in Massachusetts and he cannot. The only alleged injury which Mr. Golumbuk suffered was the loss of funds (the amounts he paid for taxes, user fees and foreign taxes) which he alleges were not properly refunded to him. Because Mr. Golumbuk is a resident of California, this injury would have occurred there and not in Massachusetts. Therefore, subsection (d) does not provide a basis for 4 This is similar to the federal concept of “general jurisdiction” which allows jurisdiction over parties even when the cause of action does not relate to the defendant’s contacts with the forum state if the defendant maintains continuous, substantial and systematic contacts with the forum state. However, subsection (d) is more restrictive because it requires that the defendant cause tortious injury in Massachusetts whereas the federal rule does not require that the injury take place in the forum state. Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 6 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 6 of 14 7 personal jurisdiction. Because the Massachusetts Long-Arm Statute does not provide a basis for jurisdiction over China Eastern, this Court cannot exercise personal jurisdiction over China Eastern. Constitutional Analysis Even if there were a statute which potentially conferred personal jurisdiction by authorizing service of process, the exercise of personal jurisdiction in this case would not comport with due process. If service is authorized, a istrict court may exercise authority over a defendant by virtue of either general or special jurisdiction. Northern Laminate Sales, Inc. v. Davis, 403 F.3d 14 (1st Cir. 2005). Specific jurisdiction requires that the case relate sufficiently to or arise from contacts between the defendant and he forum. Id. General jurisdiction may be exercised even if the cause of action is unrelated to the defendant’s contacts with the forum, but only if the defendant maintains a continuous and systematic linkage with the forum state. Id. In this case, there is no connection between the cause of action and defendant’s contacts with Massachusetts nor has plaintiff alleged such a onnection. Plaintiff is a California resident who alleges that he was injured in regard to a flight between Los Angeles and Beijing, China and a ticket which he purchased from Holt Travel and Tours which is located in California. His claim does not arise from or relate to any contacts which China Eastern may have with Massachusetts. Therefore, specific jurisdiction is ot applicable and plaintiff must establish the existence of facts which give rise to general jurisdiction. China Eastern does not have continuous, systematic or substantial contacts with Massachusetts. China Eastern is a corporation organized under the laws of China with its principal place of business located at Shanghai, China. See Am. Compl. ¶ 32. China Eastern is an airline engaged in international transportation and domestic air transportation within China. Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 7 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 7 of 14 8 See Aff. of Qian Qiao Yi ¶ 4. China Eastern operates no flights to Massachusetts, and has never operated flights to Massachusetts. China Eastern has no permanent employees, offices or bank accounts in Massachusetts. China Eastern does not advertise in Massachusetts through local newspapers, magazines, radio or television and doesn t specifically direct any advertising towards Massachusetts. China Eastern does not condut any charter flights or tours originating or ending in Massachusetts. China Eastern has never owned, rented or leased any property of any kind in Massachusetts. It has no personal property there. See Aff. of Qian Qiao Yi ¶¶ 5-12. China Eastern does not purchase aircraft or aircraft parts from entities in Massachusetts. China Eastern is not registered to do business in Massachu etts. China Eastern has never had a registered agent in Massachusetts. China Eastern has never had a post office box, telephone number or mail drop in Massachusetts. SeeAff. of Qian Qiao Yi ¶¶ 13-17. China Eastern’s only contacts with Massachusetts are vi its website which is accessible worldwide, and a contract with one Massachusetts travel agent who began selling tickets on China Eastern flights this year.. See Aff. of Qian Qiao Yi ¶ 18-19. The credit card purchase function of China Eastern’s website has generally not been operational, and China Eastern has no record of any internet sales to residents of Massachusetts. See Aff. of Qian Qiao Yi ¶ 18. General jurisdiction cannot be founded solely on the existence of a defendant’s internet website. See Dagesse v. Plant Hotel N.V., 113 F. Supp. 2d 211, 221 (D.N.H. 2000) (noting a consensus on this point). Otherwise any entity anywhere with a website would be subject to the jurisdiction of any court in the United States. In Dagesse, the court found that a proper analysis of the jurisdictional effects of an internet website must focus on whether the defendant has actually and deliberately used its website to conduct commercial transactions or other activities with residents of the forum. Id. at 223. The court noted that other courts considered the most Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 8 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 8 of 14 9 valuable evidence to be the amount of sales generated in the state by or through the interactive website. Id. at 222-23 (citing Coastal Video Communications Corp. v. Staywell Corp., 59 F. Supp. 2d 562, 572 (E.D. Va. 1999). Other courts have approved this approach. See Lakin v. Prudential Securities, Inc., 348 F.3d 704, 712 (8th Cir. 2003) (finding that the presence of an interactive website is not sufficient, and that the court must also examine the quantity of contacts that the defendant has entered into through its website with citizens of the forum state); Hockerson-Halberstadt, Inc. v. Propet USA, Inc., 62 Fed. Appx. 322, (Fed. Cir. 2003) (focusing on the quantity of internet sales by the defendant and finding $32,000 worth of internet sale over a three year period to be insufficient to establish general jurisdiction); J-L Chieftan, Inc. v. Jackson-Lloyd Ins. Agency, 351 F. Supp. 2d 587, 593-4 (E.D. Tx 2004) (stating it is not enough to find that an interactive website has the potential to reach a significant percentage of the for ign state’s population…instead, for the contact to be continuous and systematic there must be proof that the website is actually reaching a portion of the state’s population). Therefore, the touchstone of internet jurisdiction, in the general jurisdiction context, is the quantity of actual transactions between the defndant and residents of the forum state through the defendant’s website. In this case, China Eastern has no internet sales to residents of Massachusetts, and therefore, the existence of its website is an insufficient basis to confer general jurisdiction over China Eastern. China Eastern has one contract with a Massachusetts travel agent which has made de ticket sales (starting in 2005) of approximately 352 tickets (for $320,595.99) to residents of Massachusetts on behalf of China Eastern, accounting for a small percentage of China Eastern’s overall revenue. With respect to a claim of general ju isdiction, the First Circuit has noted that Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 9 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 9 of 14 10 the standard for evaluating the question whether contacts by a defendant with the forum state satisfy the constitutional test for general personal jurisdiction is "considerably more stringent" than the standard applied to claims of specific personal jurisdiction. Noonan v. Winston Co., 135 F.3d 85, 93 (1st Cir. 1998) (quoting Glater v. Eli Lilly & Co., 744 F.2d 213, 216 (1st Cir. 1984)). In Noonan, the First Circuit determined that taking approximately $585,000 in orders from customers in Massachusetts was insufficient to support general jurisdiction over the defendant. Noonan at 87, 92-93. Likewise, in Pearl Investments, LLC v. Standard I/O, Inc. v. Daudelin, 224 F. Supp. 2d 277 (D. Me. 2002), the district court held that sales over an approximately 2 ½ year period of $172,000 were insufficient to allow it to exercise personal jurisdiction over the defendant. Id. at 282. Levin v. Harned, 304 F. Supp. 2d 136 (D. Mass. 2002),5 involved several defendants, all of whom the court found to lack continuous and systematic contacts with Massachusetts despite the fact that one, defendant Newel, had $666,565 in sales to Massachusetts residents over a roughly five year period and who advertised in national publications that reached Massachusetts. The United States Supreme Court determined in Helicopteros v. Hall, 466 U.S. 408 (1984), that the defendant did not have continuous and systematic contacts with the State of Texas, despite the fact that the defendant engaged in business within the forum. The defendant’s chief executive officer had traveled to Houston in order to negotiate the contract for his company’s transportation services. Id. at 410. The defendant had purchased eighty percent (80%) of its fleet of helicopters, as well as spare parts and accessories costing more than $4,000,000 from a Texas company. Id. at 411. The defendant had sent prospective pilots to 5 The magistrate’s recommendation in regard to defendant Newel was adopted by the District Court. See Levin v. Harned, 304 F. Supp. 2d 136, No. 01-11354-PBS, 2003 U.S. Dist LEXIS 24295 (D. Mass. September 11, 2002) Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 10 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 10 of 14 11 Texas for training and to ferry aircraft to South America. Id. The defendant sent management and maintenance personnel to Texas for training. Id The defendant had received over $5,000,000 in payments drawn from a Texas bank. Id. In spite of this activity engaged in by the defendant within the State of Texas, the Supreme Court f und that these were not the sort of continuous and systematic contacts for a defendant to be present within the jurisdiction. Helicopteros, 466 U.S. at 416. China Eastern’s sales are not as significant as the contacts of the defendant in Helicopteros and are not as substantial as the amount of sales in Noonan where general jurisdiction was denied. Based on the controlling and persuasive precedent described above, China Eastern’s contacts with Massachusetts are insufficient to allow this Court to exercise general jurisdiction over it. CONCLUSION The Plaintiff did not suffer an injury in Massachusett , his cause of action does not arise out of China Eastern’s contacts with Massachusetts essential for a finding of specific jurisdiction and China Eastern has insufficient contacts with the State of Massachusetts for this court to exercise general personal jurisdiction over it in this action. As a matter of law, therefore, jurisdiction cannot be maintained under either the Massachusetts Long-Arm Statute or the U.S Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 11 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 11 of 14 12 Constitution and the lawsuit must be dismissed. Dated: September 21, 2005 By: /s/ Kathleen M. Guilfoyle Kathleen M. Guilfoyle (BBO#546512) CAMPBELL CAMPBELL EDWARDS & CONROY P.C. One Constitution Plaza Boston, Massachusetts 02129 (617) 241-3000 -and- CONDON & FORSYTH LLP Thomas J. Whalen, Esq. CONDON & FORSYTH LLP 1016 Sixteenth Street, NW Washington, DC 20036 (202) 289-0500 Attorneys for Defendant CHINA EASTERN AIRLINES COMPANY LTD Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 12 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 12 of 14 13 To: Evans J. Carter, Esq. HARGARVES, KARB, WILCOX & GALVANI, LLP 550 Cochituate Road - P.O. Box 966 Framingham, MA 01701-0966 (508) 620-0140 Attorneys for Plaintiffs Matthew A. Porter, Esq. Michael S. Shin, Esq. DECHERT LLP John Hancock Tower 200 Clarendon Street 27th Floor Boston, MA 02116 (617) 728-7100 Attorneys for Defendants Delta Air Lines, Inc., American Airlines, Inc., Northwest Airlines, Inc., Alaska Airlines, Inc. Continental Airlines, Inc., Southwest Airlines Co., and Air Transport Association of America, Inc. Thomas J. Whalen, Esq. CONDON & FORSYTH LLP 1016 Sixteenth Street, NW Washington, DC 20036 (202) 289-0500 Attorneys for Defendants China Eastern Airlines Corporation Limited, China Southern Airlines Corporation Limited and Swiss International Airlines, LTD., d/b/a SwissAir Daniel M. Esrick, Esq. WILMER CUTLER PICKERING HALE AND DORR LLP 60 State Street Boston, MA 02109 (617) 526-6529 Attorneys for Defendant Deutsche Lufthansa, AG d/b/a Lufthansa Airlines; British Airways, PLC Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 13 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 13 of 14 14 Kevin C. Cain, Esq. PEABODY & ARNOLD LLP 30 Rowes Wharf Boston, MA 02110 (617) 951-2045 Attorneys for Defendants Alitalia-Linee Aeree Italiane S.p.A., d/b/a Alitalia Airlines Michael Lawrence Cornell, Esq. NIXON PEABODY LLP 100 Summer Street Boston, MA 02110 (617) 345-1043 Attorneys for Defendant Alaska Airlines Eugene Massamillo, Esq. Peter W. Beadle, Esq. Thomas Carulli, Esq. BIEDERMANN, HOENIG, MASSAMILLO & RUFF 90 Park Avenue New York, New York 10000 Attorneys for Defendant Alitalia-Linee Aeree Italiane S.p.A. d/b/a Alitalia Airlines Airlines Reporting Corp. Defendant Pro Se Arlington, Virginia /s/ Kathleen M. Guilfoyle Kathleen M. Guilfoyle Case 1:04-cv-12558-NMG Document 80-2 Filed 09/21/2005 Page 14 of 14 Case 1:04-cv-12558-NMG Document 81 Filed 09/23/2005 Page 14 of 14
