A Texas appellate court held that a product line successor's in-state presence was insufficient for specific personal jurisdiction where the product at issue was designed and manufactured by its Canadian affiliate and the successor's in-state presence did not relate sufficiently to the allegedly failed product. Burton v. Honeywell International Inc., 2020 Tex. App. LEXIS 8600 (Tex. App. Oct. 30, 2020). The case arises out of the 2017 crash of a twin engine Piper aircraft in Texas that killed the Texas pilot and his Texas passenger. Plaintiffs alleged that the crash was caused by a defectively designed and manufactured DPF2 fuel control unit (FCU).
The FCU in the accident aircraft was designed and manufactured in Canada in 1980 by Aviation Electric Limited, a Canadian corporation. Subsequent thereto and until approximately 2005, Honeywell Limited/ Limitée (a successor Canadian corporation) manufactured the FCUs in Indiana. In 2005, Honeywell Aerospace took over the FCU product line. Pratt & Whitney purchases 99% of all FCUs made by Honeywell Aerospace, for use exclusively with the PT-6 engine. A mechanic in Texas can purchase an FCU from Honeywell Aerospace through its distribution center in Florida, or from one of its licensed repair centers, although there have not been any in Texas since 2014.
Honeywell Aerospace maintains offices in Texas and employs sixty-nine people in Texas; however, none of those employees are involved with production of the FCUs, nor are they associated with Honeywell Limited/Limitée. Honeywell Aerospace is an unincorporated division of Honeywell International. Honeywell International is a Delaware corporation with its principal place of business in New Jersey until 2019, when it was moved to North Carolina.
Plaintiffs sued Honeywell International and Honeywell Limited/Limitée on negligence and strict product liability claims. Although they did not name Honeywell Aerospace as a defendant, they argued that its activities and presence in Texas should be imputed to Honeywell International. The sole issue on appeal was whether the Texas Court had specific personal jurisdiction over these two named defendants.
Texas Courts may exercise personal jurisdiction over a nonresident defendant where it is authorized by the Texas long-arm statute and doing so is consistent with federal and state due process considerations. The Texas long-arm statute permits the Court to exercise personal jurisdiction over a nonresident who commits a tort "in whole or in part" in Texas. In order to comport with due process for specific personal jurisdiction, the nonresident defendant must have contact with Texas that results from his own efforts to seek a benefit, advantage or profit from that contact, i.e., "purposeful availment," and the lawsuit must relate to that contact.
Because the FCU in the accident aircraft was manufactured in Canada by a Canadian corporation, sold to Pratt & Whitney and installed on a PT-6 engine in Canada, which then was sold to Piper Aircraft Corporation, which installed it in an aircraft in Florida or Pennsylvania and sold to its first owner in California, and it was overhauled in West Virginia and reinstalled on the accident engine in Kentucky, the Texas Court of Appeals found there was no basis upon which to exercise specific personal jurisdiction over Honeywell Limited/ Limitée in Texas. The Court agreed to impute Honeywell Aerospace's Texas presence and activities to Honeywell International, and found those contacts constituted purposeful availment. However, that purposeful availment was insufficient because it did not relate to the actual FCU in the accident aircraft. The Court of Appeals explained, "For specific jurisdiction purposes, purposeful availment has no jurisdictional relevance unless the defendant's liability arises out of or relates to the forum contacts." Accordingly, the Court affirmed the dismissals of Honeywell International and Honeywell Limited/Limitée. Burton v. Honeywell International Inc., No. 12-20-00108-CV, 2020 Tex. App. LEXIS 8600 (Tex. App. Oct. 30, 2020).
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