Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

EASON v. LINDEN AVIONICS

January 12, 1989

CHRISTOPHER EASON, individually and as Surviving Spouse and as Administrator of the Estate of Susan Eason, Plaintiff
v.
LINDEN AVIONICS, INC., JEN ROB AVIATION, INC., KING RADIO CORPORATION, BENDIX CORPORATION, ALLIED-SIGNAL, INC. and BEECH AIRCRAFT CORPORATION, Defendants



The opinion of the court was delivered by: LECHNER, JR.

 In this diversity action Christopher Eason, in his individual capacity and as administrator of the estate, sues to recover for the wrongful death of his wife Susan. Allan Ramsay and Susan Eason were killed when the small passenger plane they were piloting and co-piloting crashed in Rhode Island. Several defendants allegedly responsible for the design, manufacture, maintenance and ownership of the airplane are joined in this action.

 Defendant Beech Aircraft Corporation ("Beech") moves to dismiss the claim against it for lack of personal jurisdiction and improper venue. In the alternative, Beech requests that the action be transferred to the United States District Court for the District of Kansas. Beech raised an identical jurisdiction motion in the Superior Court of New Jersey, Bergen County where a companion suit was brought by the Estate of Allan Ramsay and is presently pending (the "State Court Action"). The motion in the State Court Action was denied.

 Presented in this motion are four issues: (1) whether the state court ruling denying Beech's jurisdictional motion has preclusive effect in this action; (2) if not, whether Beech has sufficient minimum contacts with the State of New Jersey to render it amenable to personal jurisdiction; (3) whether the District of New Jersey is the proper venue for the claim against Beech; and (4) whether this action should be transferred to the District of Kansas.

 Facts

 On November 27, 1985 pilot Allan Ramsay and co-pilot Susan Eason were killed when their Beechcraft King Air Model C-90 crashed in East Greenwich, Rhode Island while en route from Morristown, New Jersey to Providence, Rhode Island. Alleging responsibility on the part of various defendants, Christopher Eason ("Eason") brought this action based on theories of negligence and strict liability. The State Court Action seeks recovery for the wrongful death of pilot Allan Ramsay. See Letter from Noah H. Kushlefsky to chambers, dated October 6, 1988. The plaintiff in this action and the plaintiff in the State Court Action are represented by the same law firm. Id.

 Beech, a Delaware corporation with its principal place of business in Kansas, allegedly designed and manufactured the Beechcraft airplane. Defendant Jen Rob Aviation, Inc. ("Jen Rob"), a New Jersey corporation operating principally in New Jersey, allegedly owned the airplane at the time of the crash. Defendants King Radio Corporation ("King Radio"), a Kansas corporation, and Bendix Corporation ("Bendix"), a Delaware corporation, allegedly designed various component parts of the airplane. Defendant Linden Avionics, Inc. ("Linden"), a New Jersey corporation, allegedly maintained the airplane on behalf of Jen Rob. Defendant Allied-Signal, Inc. ("Allied-Signal"), having acquired King Radio and Bendix, is named in the action on a theory of corporate successor liability.

 In its motion to dismiss, Beech contends its contacts with New Jersey are insufficient to support either jurisdiction or venue in this district. Beech conducts the bulk of its business outside of New Jersey. Although authorized to do business in Colorado and Alabama, Beech is not so authorized in New Jersey. Affidavit of Richard S. Griffiths ("Griffiths Aff.") para. 2. Beech maintains no manufacturing, sales, warehouse or other facilities in New Jersey. Id. at para. 4. Beech owns no property in New Jersey. Id. It has no officers or employees in New Jersey, nor has it authorized a New Jersey agent to receive service of process. Id. at para. 6.

 The only Beech contacts with New Jersey arise from its use of the New Jersey market for the sale of its airplanes. Beech airplanes are sold by various New Jersey aviation centers. Id. at para. 7. Two wholesalers, one of which is located outside of New Jersey, supply Beech parts within New Jersey. Id. These companies operate as independent distributors. Id. According to Beech, "all sales of aircraft and parts by Beech to these independent distributors are made pursuant to sales purposefully negotiated and completed in Kansas." *fn1" Beech Moving Brief at 4.

 Beech concedes its employees often make trips to New Jersey. "On occasion, Beech employees have assisted independent distributors located within the State of New Jersey and demonstrated Beech products. Such assistance is performed solely at the request of and for the benefit of such independent distributors." Plaintiff's Exhibit 1 at 3, para. 8. Beech also admits to making contracts for "procurement of vendor goods or services [from] a New Jersey retailer." Id. Beech has sold thirty-one airplanes to New Jersey aviation centers within the last five years. Id. Attachment "A." Beech lists over one hundred employee trips to New Jersey in the past five years. Id. Attachment "B." Beech also admits to purchasing goods and services from companies located in New Jersey. Beech Moving Brief at 6.

 With regard to the sale of the airplane flown by Allan Ramsay and Susan Eason, Beech first sold the plane to its subsidiary, Indiana Beechcraft Corporation, located in Indiana, which in turn sold the plane to a subsidiary, Beechcraft East, located in Farmingdale, New York. Beechcraft East then sold the plane to Irwin Feiner of Ocala, Florida, who then resold it to Beechcraft East. Beechcraft East thereafter sold the airplane to Jen Rob in New Jersey.

 In the State Court Action, Judge Arthur Minuskin issued an order denying a Beech motion to dismiss for lack of personal jurisdiction. Letter from Noah H. Kushlefsky to chambers, received October 17, 1988. Judge Minuskin held Beech had sufficient contacts in New Jersey to support personal jurisdiction in New Jersey. Relying on Asahi Metal Ind. v. Superior Ct. of Cal., Solano Cty., 480 U.S. 102, 94 L. Ed. 2d 92, 107 S. Ct. 1026 (1987), Judge Minuskin found that Beech both placed its aircraft products into the stream of commerce and maintained purposeful contact with New Jersey through the sales and marketing activities of its employees.

 Discussion

 A. Issue Preclusion

 Before addressing the substance of the Beech jurisdictional defense, the possible preclusive effect of the prior state court judgment must be examined. *fn2" Congress has provided that "judicial proceedings shall have the same full faith and credit in every court within the United States . . . as they have by law or usage in the courts of [the] State . . . from which they are taken." 28 U.S.C. § 1738. *fn3" Based upon this statutory direction, federal courts are to raise the issue of the preclusive effect of prior state court rulings whenever the courts of the state "from which the judgments emerged would do so." Kelley v. TYK Refractories Co., 860 F.2d 1188, 1193 (3d Cir. 1988) (quoting Allen v. McCurry, 449 U.S. 90, 96, 66 L. Ed. 2d 308, 101 S. Ct. 411 (1980)); see also VanDissel v. Jersey Cent. Power & Light, 194 N.J. Super. 108, 121-122, 476 A.2d 310 (App. Div.), cert. denied, 99 N.J. 186, 491 A.2d 690 (1984). Accordingly, the preclusive effect of the order denying the Beech motion in the State Court Action will be determined with reference to New Jersey law. See Migra v. Warren County School District Board of Ed., 465 U.S. 75, 79 L. Ed. 2d 56, 104 S. Ct. 892 (1984); Towers, Perrin, Forster & Crosby, Inc. v. Brown, 732 F.2d 345 (3d Cir. 1984).

 Res judicata and collateral estoppel are "related but independent concepts." Gregory v. Chehi, 843 F.2d 111, 115 (3d Cir. 1988). These doctrines generally prohibit relitigation of claims and issues decided in a prior proceeding. As summarized by the Supreme Court in Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n. 5, 58 L. Ed. 2d 552, 99 S. Ct. 645 (1979):

 
Under the doctrine of res judicata, a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action. Under the doctrine of collateral estoppel, on the other hand, the second action is upon a different cause of action and the judgment in the prior suit precludes relitigation of issues actually litigated and necessary to the outcome of the first action.

 (citing 1B J. Moore, Moore's Federal Practice para. 0.405(1) at 622-624 (2d ed. 1974)).

 The term res judicata has been given a variety of meanings, some of which incorporate the distinct concept of collateral estoppel. Gregory, 843 F.2d at 115 (citing A. Vestal, Res Judicata/Preclusion, V-13 to 14 (1969)). "To reduce the confusion that resulted from the interchangeable use of these terms, the courts have refined the nomenclature used in the preclusion doctrine." Id. (citing Wade v. City of Pittsburgh, 765 F.2d 405, 408 (3d Cir. 1985)). Following the guidance of the Supreme Court and the Restatement (Second) of Judgments, the terms "claim preclusion" and "issue preclusion" will be used. See Migra, 465 U.S. at 75; Gregory, 843 F.2d at 115-116. The term claim preclusion replaces res judicata; the term issue preclusion replaces collateral estoppel. Gregory, 843 F.2d at 116.

 Eason seeks to estop Beech from raising the specific issue of personal jurisdiction, invoking the doctrine of issue preclusion. Plainfield v. Public Service Electric and Gas Co., 82 N.J. 245, 257, 412 A.2d 759 (1980) ("Collateral estoppel is that branch of the broader law of res judicata which bars relitigation of any issue which was actually determined in a prior action, generally between the same parties, involving a different claim or cause of action.") When a party asserts issue preclusion to block its opponent from raising an issue which has already been litigated, it acts "offensively." Defensive issue preclusion is generally asserted by a defendant to preclude a plaintiff from relitigating identical issues by "merely 'switching adversaries.'" Parklane Hosiery, 439 U.S. at 650.

 The focus of issue preclusion is efficiency. Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 328-329, 28 L. Ed. 2d 788, 91 S. Ct. 1434 (1971). Its purpose is to prevent the relitigation of issues previously resolved, thereby promoting judicial economy. Parklane Hosiery, 439 U.S. at 326. Under New Jersey law, the doctrine of issue preclusion requires a "discretionary weighing of economy against fairness." Kortenhaus v. Eli Lilly & Co., 228 N.J. Super. 162, 165, 549 A.2d 437 (App. Div. 1988). Whether issue preclusion applies depends upon a variety of factors, "all of which are considered because they contribute to the greatest good for the greatest number so long as fairness is not sacrificed on that altar." State v. Gonzalez, 75 N.J. 181, 191, 380 A.2d 1128 (1977) (quoting Continental Can Co. v. Hudson Foam Latex Products, Inc., 129 N.J. Super. 426, 430, 324 A.2d 60 (App. Div. 1974)).

 Among the criteria to be considered before issue preclusion can be invoked are whether:

 
(i) the party to be estopped was a party or in privity with a party in the prior action;
 
(ii) the issue to be estopped is the same as that previously litigated; and
 
(iii) the issue was actually litigated (or finally resolved) and necessary to the prior judgment.

 See Glictronix Corp. v. American Tel. & Tel. Co., 603 F. Supp. 552, 565 (D.N.J. 1984). After addressing these factors, a determination must be made as to whether preclusion would be fair. Did the party to be estopped have incentive to vigorously litigate the first action? If there is more than one judgment involved, are they consistent? Does the second action afford some procedural opportunities unavailable in the first action? And finally, would application of issue preclusion otherwise be unfair to the defendant? Id.

 (1) Privity

 New Jersey has abandoned the requirement of privity and adopted the modern rule of issue preclusion as stated in the Restatement (Second) of Judgments: "A party precluded from relitigating an issue with an opposing party . . . is also precluded from doing so with another person unless the fact that he lacked full and fair opportunity to litigate the issue in the first action or other circumstances justify affording him an opportunity to relitigate the issue." Id. at § 29; see Kortenhaus, 228 N.J. Super. at 165. The requirement of mutuality -- that neither party use a prior ruling as estoppel against the other unless both parties were bound by the ruling -- also has been discarded by federal courts. Parklane Hosiery, 439 U.S. at 649; Blonder-Tongue, 402 U.S. at 313. Accordingly, when assessing the applicability of issue preclusion, the question to be decided is "whether a party has had his day in court on an issue, rather than whether he has had his day in court on that issue against a particular litigant." Gonzalez, 75 N.J. at 189 (quoting McAndrew v. Mularchuk, 38 N.J. 156, 161, 183 A.2d 74 (1962)).

 In this case, Beech is a named defendant in both the State Court Action and this action. Although the plaintiffs are different in each suit, they are each represented by the same law firm, the complaints arise out of a single occurrence and Beech has an equally strong incentive to avoid the jurisdiction of the state and federal courts (and apparently was represented by the same law firm in each action).

 (2) Identity of Issues

 Not only does the cause of action in both lawsuits arise out of a single occurrence, but Beech asserted the identical personal jurisdiction defense in the State Court Action. Beech and Eason (by virtue of Eason's representation by the same law firm which represents Ramsay) had the opportunity to fully litigate this issue in the State Court Action. As Judge Minuskin indicated in his opinion from the bench, both parties presented extensive submissions; the arguments raised were carefully considered. Nothing in the record indicates that the arguments presented in the State Court Action in any way differ from those articulated here.

 (3) Finality

 Beech contends that under New Jersey law an interlocutory order of a state court denying a motion to dismiss for lack of personal jurisdiction is not "final" for the purposes of issue preclusion. Accordingly, Beech argues the application of issue preclusion in this case is not appropriate.

 Beech has presented an array of cases supporting the proposition that a "valid and final judgment" is essential in order to invoke issue preclusion. See McLendon v. Continental Group, Inc., 660 F. Supp. 1553, 1560 (D.N.J. 1987) (one element of issue preclusion is that the issue had been decided by a "valid and final judgment"); State v. Redinger, 64 N.J. 41, 45, 312 A.2d 129 (1973) ("When an issue of ultimate fact has once been determined by a valid and final judgment, the issue cannot again be litigated . . . in any future lawsuit."); Gregory Marketing Corp. v. Wakefern Food Corp., 207 N.J. Super. 607, 621, 504 A.2d 828 (Law Div. 1985) (issue must be determined by a "valid and final judgment"); see also Nanavati v. Burdette Tomlin Memorial Hospital, 857 F.2d 96, 114 n. 17 (3d Cir. 1988) (For purposes of claim preclusion "[a] cause of action once finally determined between parties on the merits by a tribunal having jurisdiction cannot be relitigated by those parties. . . ." (citations omitted)).

 The case law defining the term "finality" for the purposes of preclusion is sparse and, as a result, the precise definition of "finality" in this context remains illusive. Whether a judgment will be considered final for the purposes of issue preclusion turns on "such factors as the nature of the decision (i.e., that it was not avowedly tentative), the adequacy of the hearing, and the opportunity for review." Glictronix, 603 F. Supp. at 573 (quoting Lummus Co. v. Commonwealth Refining Co., 297 F.2d 80, 89 (2d Cir.), cert. denied, 368 U.S. 986, 82 S. Ct. 601, 7 L. Ed. 2d 524 (1981)).

 In this case, there is no indication that Judge Minuskin's order was tentative or subject to further consideration. See 18 C. Wright, A. Miller and E. Cooper, Federal Practice and Procedure § 4427 at 270 (1981) (hereinafter "Federal Practice and Procedure"). Furthermore, Beech does not contest the adequacy of the hearing in state court. Although Beech indicated in oral argument that it would not seek interlocutory appeal of Judge Minuskin's order, it appears the opportunity for ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.