FRANK H. SEAY, District Judge.
Before the Court for its consideration is the Motion To Dismiss For Lack Of Personal Jurisdiction (Dkt. No. 88) filed by Third-Party Defendant, Banyan Air Service, Inc. ("Banyan"). Banyan seeks the dismissal of the third-party claims for negligence and contribution filed against it by Defendants/Third-Party Plaintiffs, Pratt & Whitney Canada Corporation ("Pratt & Whitney") and Hamilton Sundstrand Corporation ("Sundstrand"), and the cross-claims for indemnification and contribution filed against it by Defendant, Covington Aircraft Engines, Inc. ("Covington"). Pratt & Whitney, Sundstrand, and Covington filed responses in opposition Banyan's motion (Dkt. Nos. 101 and 103). On August 12, 2010, the Court heard arguments on Banyan's motion. At the conclusion of the hearing, the Court granted Covington leave to engage in limited jurisdictional discovery on the issue of general personal jurisdiction.
This action arises out of the crash of a Cessna Model 208B aircraft, U.S. Registration No. N954PA (the "Aircraft"), on December 20, 2007, in the ocean waters near the Bahamas. The Aircraft was owned and operated by Plaintiff, Agape Flights, Inc. ("Agape"), a Florida corporation with its principal place of business in Venice, Florida. At the time of the crash, the Aircraft was being powered by a PT6A-114A engine, Serial No. PCE-17014 (the "Engine"), which Agape had rented from Covington pursuant to a November 7, 2007, Engine Rental Agreement. Pratt & Whitney is the manufacturer of the Aircraft's Engine and Sundstrand is the manufacturer of the Fuel Pump, Part No. 025323-150, Serial No. 839 ("Fuel Pump"), which was part of the Aircraft's Engine. In its Amended Complaint, Agape contends the crash and resultant destruction of the Aircraft was caused by the "defective and unserviceable condition of the Engine, including the fuel pump installed in the Engine." Amended Complaint (Dkt. No. 60), ¶ 13. In particular, Agape's investigation has led it to conclude that the crash occurred as a result of an in-flight power loss resulting from the Fuel Pump drive shaft splines being severely worn. Agape seeks to recover from Covington, Pratt & Whitney, Sundstrand, and Kansas Aviation of Independence, LLC ("Kansas Aviation") for the loss of the Aircraft under theories of negligence, strict products liability, breach of contract, and breach of warranties.
Covington, an Oklahoma corporation with its principal place of business in Okmulgee, Oklahoma, operates a business of aircraft maintenance, repair, and overhaul. As part of its operations, Covington provides customers, such as Agape, with rental engines for their aircraft while the customer's primary engine is being serviced by Covington. As noted above, at the time of the crash on December 20, 2007, the Aircraft was being powered by the Engine, which was a rental engine Covington had provided to Agape pursuant to the November 7, 2007, Engine Rental Agreement. Prior to the Engine being placed on the Aircraft, the Engine's Fuel Pump was serviced, at the request of Covington, by Kansas Aviation. Kansas Aviation is in the business of repairing and overhauling engine accessories, including fuel pumps. On or about February 10, 2006, Kansas Aviation overhauled the Fuel Pump for Covington at its Kansas facility and shipped the Fuel Pump back to Covington in Oklahoma.
On March 26, 2007, Covington entered into a Engine Rental Agreement with Capcana S.A./Africair, Inc. ("Capcana") for the rental of the Engine to be used and installed on Capcana's aircraft while Capcana's engine was being overhauled by Covington. At Capcana's direction, the Engine
The additional discovery conducted by Covington was an attempt to determine Banyan's business contacts and connections with Oklahoma. Covington attempted to determine the gross revenues Banyan derived from Oklahoma customers for the period 2005 through 2009. These revenues were generated through purchases by Oklahoma customers on Banyan's interactive website, www.banyanair.com, which contains an online store, Tropic Aero at www.tropicaero.com. The statistical data was broken down by categories: (1) gross revenue and transactions from aircraft/avionics sales to Oklahoma based entities ("Category 1") and (2) gross revenue and transactions from aircraft/avionics sales to Oklahoma based entities, but actually shipped to a state other than the State of Oklahoma ("Category 2").
Banyan's other contacts with the State of Oklahoma as developed by Covington during the course of the additional discovery involve two trips to Oklahoma by Paul Rose ("Rose"), Vice President of Technical Sales and Support for Banyan. In August 2005, Rose visited Spirit Wing Aviation in Guthrie, Oklahoma, to discuss a potential project to re-engine the Lear 20 series Williams FJ-44A light weight Stage III engine. No deal was ever reached on this project. Finally, in October 2005, Rose visited with John Groth ("Groth") of the United States Air Force to discuss contractor logistics support for the RC-26B avionics upgrade program. Rose met with Groth at Tinker Air Force base in Oklahoma where Groth was located from October 28-30, 2005.
The issue raised by Banyan's Motion to Dismiss (Dkt. No. 88) is whether this Court has personal jurisdiction over Banyan, a nonresident third-party defendant. As the parties asserting claims against Banyan, the burden of establishing such jurisdiction rests with Covington, Pratt & Whitney, and Sundstrand. Rambo v. American Southern Ins. Co., 839 F.2d 1415, 1417 (10th Cir.1988). At this preliminary stage of the litigation, however, this burden is not a heavy one. Intercon, Inc. v. Bell Atlantic Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir. 2000). In order to defeat a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction supported by affidavits and other materials, the parties contesting such motion "need only make a prima facie showing of personal jurisdiction." OMI Holdings, Inc. v. Royal Ins. Co. Of Canada, 149 F.3d 1086, 1091 (10th Cir.1998). The Court considers the allegations of the complaint to be true to the extent they are uncontroverted by opposing affidavits. Intercon, 205 F.3d at 1247. Moreover, all factual disputes are to be resolved in favor of the parties bearing the burden of establishing personal jurisdiction. Id. If a prima facie case of personal jurisdiction is established, the opposing party may defeat such showing by presenting "a compelling case demonstrating `that the presence of some other considerations would render jurisdiction unreasonable.'" OMI Holdings, 149 F.3d at 1091 (quoting Burger King v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)).
In a diversity action such as the instant case, the law of the forum determines the existence of personal jurisdiction. Yarbrough v. Elmer Bunker & Assocs., 669 F.2d 614, 616 (10th Cir.1982). Under Oklahoma law a single due process analysis is utilized to determine the extent of personal jurisdiction over a nonresident defendant. Oklahoma's long-arm statute provides that "[a] court of this state may exercise jurisdiction on any basis consistent with the Constitution of this state and
Rambo, 839 F.2d at 1417 (quoting First City Bank, N.A. v. Air Capitol Aircraft Sales, Inc., 820 F.2d 1127, 1130-31 (10th Cir.1987)). The nature of a defendant's contacts must be such that the defendant could reasonably anticipate being haled into court in the forum state. World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. 559.
Two types of personal jurisdiction are recognized—specific and general. Specific jurisdiction involves a two-step analysis. First, it must be determined whether a defendant "has `purposefully directed' his activities at residents of the forum, and the litigation results from alleged injuries that `arise out of or relate to' those activities." Burger King, 471 U.S. at 472, 105 S.Ct. 2174 (1985) (internal quotations omitted); Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1071 (10th Cir.2008) (in tort cases, courts "often ask whether the nonresident defendant `purposefully directed' its activities at the forum state"). If sufficient minimum contacts are present, the second step requires a showing that the exercise of personal jurisdiction over a defendant comports with traditional notions of "fair play and substantial justice." Burger King, 471 U.S. at 476, 105 S.Ct. 2174. General jurisdiction, on the other hand, requires continuous and systematic contacts with the forum. See Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 415-16, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). The minimum contacts analysis for general jurisdiction is more stringent than for specific jurisdiction as the contacts do not derive from the events giving rise to the suit. See Benton v. Cameco Corp., 375 F.3d 1070, 1080 (10th Cir.2004), cert. denied, 544 U.S. 974, 125 S.Ct. 1826, 161 L.Ed.2d 723 (2005).
Pratt & Whitney, Sundstrand, and Covington all contend the exercise of specific personal jurisdiction over Banyan is appropriate. They argue that Banyan's removal and reinstallation of the Fuel Pump and Banyan's replacement of the fuel control unit evidence a purposeful direction of actions to the State of Oklahoma given Banyan's knowledge that the Engine was leased from Covington, an Oklahoma entity, and the fact that Banyan communicated with Covington regarding its work on the Engine on behalf of Capcana. The Court disagrees.
The initial burden for establishing specific personal jurisdiction requires a
Covington also argues it is appropriate to exercise general personal jurisdiction over Banyan. In addition to Banyan's contacts with Covington during the course of Banyan's servicing of the Engine for Capcana, Covington relies on Banyan's history of business dealings with customers located in Oklahoma. Covington contends that as a result of these business dealings Banyan has sold products to Oklahoma customers, billed Oklahoma customers for products sold and services provided, and shipped products to Oklahoma customers. These business dealings involve sales to Oklahoma customers over Banyan's internet sites and two business-related visits to Oklahoma by Banyan's employee, Rose.
In order to assert general personal jurisdiction over Banyan, Covington must establish that Banyan has "continuous and systematic" contacts with Oklahoma. Helicopteros, 466 U.S. at 415, 104 S.Ct. 1868. The Tenth Circuit has relied on certain factors to assist in the determination of whether the general business contacts of a non-resident corporate defendant are sufficient to exercise general personal jurisdiction: whether the defendant is (1) engaged in business in the forum; (2) licensed to do business in the forum; (3) owning, leasing, or controlling property (real or personal) or assets in the forum; (4) maintaining employees, offices, agents, or bank accounts in the forum; (5) present in that shareholders reside in the forum; (6) maintaining phone or fax listings within the forum; (7) advertising or soliciting business in the forum; (8) traveling to the forum by way of salespersons or other employees; (9) paying taxes in the forum; (10) visiting potential customers in the forum; (11) recruiting employees in the forum; and (12) generating a substantial percentage of its national sales through revenue generated from customers of the forum. Soma Medical International v. Standard Chartered Bank, 196 F.3d 1292, 1295 (10th Cir.1999).
Covington's submission of the internet sales data and the visits to Oklahoma by Rose implicates only factors 1, 8, 10, and 12. Covington has not presented any evidence to either implicate the other factors or to rebut the affidavit of Donald A. Campion ("Campion"), President of Banyan, related to Banyan's non-presence in Oklahoma. In his affidavit, Campion asserts Banyan (a) is not, and has never been, registered to do business in Oklahoma; (b) has never had a registered service agent in Oklahoma; (c) has never had an Oklahoma mailing address or telephone listings; (d) has never employed any Oklahoma resident; (e) has never been registered with the Oklahoma Tax Commission; (f) has never maintained an office in Oklahoma; (g) has never paid any taxes to the State of Oklahoma; (h) has never owned or leased real or personal property in Oklahoma; (i) has never before been sued in Oklahoma; (j) has never maintained any company files or records in Oklahoma; and (k) has never held any bank accounts in Oklahoma. Thus, it is evident from Campion's affidavit that Banyan does not have a true, traditional business presence in the State of Oklahoma.
Covington's case for general personal jurisdiction rests primarily on Banyan's internet sites to establish website sales and a significant business presence on the part of Banyan in Oklahoma. This evidence touches on factors 1 and 12 of the Soma analysis (whether Banyan engaged in business in Oklahoma and the percentage of its national sales generated from Oklahoma customers). In this internet age, the existence of an interactive website which allows for the exchange of information and for sales transactions over a virtually unlimited geographical area cannot, by itself, equate with the existence of general personal jurisdiction. Courts have recognized that the "continuous and systematic" requirement for general personal jurisdiction necessitates more than the existence of an interactive website before a nonresident defendant can be subjected to suit in a forum. As aptly noted by the Court in
Id. at 221 (quoting Millennium Enterprises v. Millenium Music, 33 F.Supp.2d 907, 910 (D.Or.1999) (internal citations omitted)). What must be evaluated in the context of an interactive website is "the level of interactivity and commercial nature of the exchange of information that occurs on the Web site." Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119, 1124 (W.D.Pa.1997). As noted by the Court in Zippo, this evaluation "reveals that the likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet." Id.
Consistent with this observation, and in attempt to adhere to the "continuous and systematic" requirement for general personal jurisdiction, the United States District Court for the Northern District of Oklahoma has adopted a standard for evaluating websites. In Smith v. Basin Park Hotel, Inc., 178 F.Supp.2d 1225 (N.D.Okla.2001), the Court held:
Id. at 1235. The evidence submitted by Covington in relation to Banyan's website activity simply does not satisfy this standard. Banyan's internet sales to Oklahoma customers via its two websites amount to only .040658% of the Banyan's total gross revenue for the five-year period of 2005-2009. See Hydro Engineering v. Landa, Inc., 231 F.Supp.2d 1130, 1133-34 (D.Utah 2002) (in finding that the Soma factors did not weigh in favor of exercising general personal jurisdiction, the district court held that a nonresident corporate defendant's sales through a Utah distributor and directly to Utah consumers amounting to 1.85% of defendant's national sales did not constitute a substantial percentage of defendant's national sales). There is also no evidence in the record that Banyan has targeted Oklahoma customers in connection with its products and services offered on its websites. Thus, it is abundantly clear that Covington has failed to establish that Banyan has "actually and deliberately used its website[s] to conduct commercial transactions on a sustained
Finally, Covington's reliance on Rose's two visits to Oklahoma in 2005 (implicating Soma factors 8 and 10) are so isolated and random that they do not lend any support for a finding of "continuous and systematic" contacts by Banyan with Oklahoma. Outside of these two visits over a five-year period, Covington offers nothing to establish that Banyan routinely visits Oklahoma to solicit customers or otherwise avails itself of the benefits of this forum to further its business activities.
In sum, an analysis of the Soma factors points undeniably in one direction—that Banyan does not have the necessary "continuous and systematic" business contacts with Oklahoma to justify the Court's exercise of general personal jurisdiction over it for the claims asserted by Covington.
Based on the foregoing reasons, the Court finds no basis upon which to exercise personal jurisdiction over Banyan with respect to the claims asserted by Pratt & Whitney, Sundstrand, and Covington. Banyan's Motion To Dismiss For Lack Of Personal Jurisdiction (Dkt. No. 88) is therefore granted.