Old Republic Insurance Co. v. Continental Motors, Inc. , 877 F.3d 895 ( 2017 )

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS December 15, 2017
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
OLD REPUBLIC INSURANCE
COMPANY,
Plaintiff - Appellant,
No. 16-1408
v.
CONTINENTAL MOTORS, INC.,
Defendant - Appellee.
_________________________________
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:16-CV-00046-JLK)
_________________________________
Michael L. Poindexter, The Law Offices of Michael L. Poindexter, Golden, Colorado, for
Plaintiff-Appellant.
Norman E. Waldrop, Jr., Armbrecht Jackson LLP, Mobile, Alabama (Sherri R. Ginger
and Benjamin Y. Ford, Armbrecht Jackson LLP, Mobile, Alabama; and Theresa R.
Warden and Jennifer L. Parker, Wheeler Trigg O’Donnell, Denver, Colorado, on the
brief), for Defendant-Appellee.
_________________________________
Before MATHESON, McKAY, and McHUGH, Circuit Judges.
_________________________________
MATHESON, Circuit Judge.
_________________________________
This appeal addresses whether the federal district court in Colorado may exercise
specific personal jurisdiction over out-of-state defendant Continental Motors, Inc., a
manufacturer of airplane engines, based upon its contacts with Colorado through its
website. Continental Motors’ website allows airplane repair businesses known as fixed-
base operators (“FBOs”) to obtain unlimited access to its online service manuals in
exchange for an annual fee. Arapahoe Aero, a Colorado-based FBO participating in the
program, accessed and consulted the manuals in servicing an airplane that contained
engine components manufactured by Continental Motors. The airplane later crashed in
Idaho on a flight from Colorado.
After the crash, Old Republic Insurance Company, the airplane’s insurer, paid the
owner for the property loss and filed a subrogation action against Continental Motors in
Colorado federal district court, seeking reimbursement. Old Republic alleged that
Continental Motors’ online service manuals and bulletins contained defective
information, thereby causing the crash. Continental Motors moved to dismiss the lawsuit
for lack of personal jurisdiction, arguing that it did not purposely direct its activities at
Colorado. In response, Old Republic contended that Continental Motors had targeted its
website and online manuals toward Colorado residents, thereby subjecting itself to
personal jurisdiction as to claims arising out of these contacts. Old Republic conceded
that Continental Motors did not maintain sufficient contacts with Colorado to support
jurisdiction for all purposes. The district court granted the motion to dismiss, ruling that
it did not have specific jurisdiction over Continental Motors.
On appeal, Old Republic maintains that Continental Motors is subject to specific
personal jurisdiction in the State of Colorado for purposes of this case. It bases its
jurisdictional argument entirely on Continental Motors’ contacts with Colorado through
2
its website and online manuals. Exercising jurisdiction under 28 U.S.C. § 1291, we
affirm.
I. BACKGROUND
A. Factual History
The following facts, except where otherwise indicated, are drawn from the
operative complaint and the written materials that Old Republic submitted to the district
court in support of the court’s jurisdiction over Continental Motors. See Wenz v. Memery
Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995) (on motion to dismiss for lack of personal
jurisdiction, “[t]he allegations in the complaint must be taken as true to the extent they
are uncontroverted by the defendant’s affidavits” (quotations omitted)); OMI Holdings,
Inc. v. Royal Ins. Co. of Can., 149 F.3d 1086, 1091 (10th Cir. 1998) (a plaintiff may
satisfy its prima facie burden by submitting an “affidavit or other written materials
[containing] facts that if true would support jurisdiction over the defendant”).
1. The Parties
Plaintiff-Appellant Old Republic is an insurance company incorporated in
Pennsylvania, with its principal place of business in Illinois. Defendant-Appellee
Continental Motors is an aircraft engine and parts manufacturer incorporated in
Delaware, with its principal place of business in Alabama. Arapahoe Aero, a Colorado
corporation and FBO,1 is not a party to this case. Arapahoe Aero operates a repair
1
An FBO is a commercial business that operates at an airport and provides
aeronautical services, including aircraft maintenance, to the public. See Aplt. Br. at vi.
3
station, certified by the Federal Aviation Administration (“FAA”), out of the Centennial
Airport in Englewood, Colorado.
2. The Aircraft Accident
On January 9, 2014, an airplane insured by Old Republic (the “Aircraft”) crashed
in Idaho on a flight from Colorado. The Aircraft’s engine contained magnetos2
manufactured by Continental Motors and serviced by Arapahoe Aero in reliance on one
of Continental Motors’ online manuals and two bulletins. Because the service manual
and bulletins allegedly provided inadequate instructions, Arapahoe Aero failed to
properly inspect and replace the magnetos’ nylon distributor gears when it serviced the
Aircraft in September of 2009 and again in December of 2013. The gears later failed
during the Aircraft’s flight on January 9, 2014, resulting in the crash.
When the Aircraft crashed, it belonged to Nylund Imports, Inc. (“Nylund”), a
Colorado corporation. Nylund kept the Aircraft at the Centennial Airport in Englewood,
Colorado. After the crash, Old Republic paid Nylund a $329,500 settlement for the value
of the Aircraft3 and also incurred other expenses in mitigating damages. In exchange for
this payment, Nylund assigned its rights and interest in the Aircraft, including claims for
property damage, to Old Republic.
2
Magnetos are “engine-driven electrical generator[s] adapted to produce impulses
of high voltage for spark plugs that are used in the ignition systems of spark-ignition
aircraft piston engines.” Aplt. Br. at vi. In other words, they power the aircraft engine’s
spark plugs, which ignite the engine fuel.
3
Due to damage resulting from the crash, the anticipated cost to repair the Aircraft
exceeded its value.
4
3. Continental Motors’ FBO Services and Rewards Program
Continental Motors offers the FBO Services and Rewards Program (the “FBO
Program”), which it advertises on its website’s FBO Program webpage. In the five-year
period preceding the crash, 20 FBOs from Colorado—including Arapahoe Aero—
participated in the FBO Program. Arapahoe Aero first enrolled in 1996.
Membership in the FBO Program, which in 1996 cost about $1,000 annually, now
costs about $240 annually.4 In addition to paying the fee, participating members of the
FBO Program must agree to a set of terms and conditions imposed by Continental Motors
(“FBO T&C”). The FBO T&C provides, among other things, that members must
complete an online profile, which involves submitting their addresses. The FBO T&C
also provides that Continental Motors “reserves the right to make changes or terminate
[the FBO Program] at any time.” App., Vol. I at 63.
At all relevant times, the FBO Program provided member FBOs with complete
access to Continental Motors’ online service manuals, some of which were also made
available for free to the public.5 Over time, Continental Motors has made more of its
online service manuals free to the public. When Arapahoe Aero serviced the Aircraft in
4
The record does not reveal the exact annual fee charged at the times when
Arapahoe Aero serviced the Aircraft in 2009 and 2013, but we infer from the fee’s
apparent reduction over time that it was somewhere between $240 and $1,000, likely
closer to the $240 end.
5
FAA regulations require certified aircraft engine manufacturers, such as
Continental Motors, to “furnish at least one set of complete [service manuals] to the
owner of each [engine] upon its delivery” and to make the manuals “available to any
other person required . . . to comply with [mandatory airworthiness standards],” such as
Arapahoe Aero. 14 C.F.R. § 21.50(b).
5
September of 2009, online access to the particular manual it referenced (the “Manual”)
was still restricted to members of the FBO Program.6 By the time Arapahoe Aero
serviced the Aircraft in December of 2013, however, anyone could access the Manual
online for free.7 In contrast to its service manuals, Continental Motors’ online service
bulletins—including the ones relied on by Arapahoe Aero in servicing the Aircraft—were
freely accessible to the public at all relevant times.
Besides unrestricted access to online service manuals, participating FBOs received
additional benefits from enrolling in the FBO Program. First, Continental Motors listed
participating FBOs on its FBO Locator webpage. App., Vol. I at 58 (“As a member your
shop will be listed in the query locator on our website. Your customers will have the
ability to search for FBO’s . . . by Country, State, and City bringing more customers to
your business.”).8 Second, Continental Motors allowed participating FBOs to send two
representatives to a week-long training school at the Continental Motors factory in
Mobile, Alabama. Id. Third, Continental Motors rewarded a participating FBO $500 for
every one of its engines it installs. Id. Fourth, Continental Motors provided participating
6
Carmen Woodham, Continental Motors’ Controller, explained at her July 21,
2016 deposition that—at all relevant times—anyone could pay for individual online
access to any of the restricted manuals without subscribing to the FBO Program. She did
not specify how much this individual access generally cost.
7
This fact, which Old Republic does not dispute, is taken from Ms. Woodham’s
affidavit dated September 12, 2016.
8
The record contains a screenshot of Continental Motors’ FBO Locator webpage
listing Arapahoe Aero and 19 other Colorado FBOs. App., Vol. I at 61. The screenshot
does not indicate the date on which this webpage was accessed.
6
FBOs with dedicated customer support. Id. (“Highly-trained technical staff located in our
Global Customer Support Center are available to help you learn the system and will assist
you with your service and maintenance needs as well. It’s like having your own
dedicated technical service representative at your facility.”).
B. Procedural History
Old Republic brought a subrogation action against Continental Motors in the U.S.
District Court for the District of Colorado. Old Republic’s amended complaint—the
operative one here—sought damages for one claim of strict liability in tort based on the
Aircraft’s magnetos’ allegedly defective design, manufacture, and instructions.
Continental Motors moved to dismiss under Federal Rule of Civil Procedure
12(b)(2) for lack of personal jurisdiction. Following a period of jurisdictional discovery,
but without conducting an evidentiary hearing, the district court granted the motion to
dismiss. It held that Old Republic failed to show that Continental Motors purposely
directed its “website or electronic information” specifically at the forum state of
Colorado. Old Republic Ins. Co. v. Cont’l Motors, Inc., 207 F. Supp. 3d 1213, 1215 (D.
Colo. 2016). Apart from the website and online service manuals and bulletins, the court
did not credit any other contacts between Continental Motors and Colorado alleged by
Old Republic. Id. at 1215-16.
Old Republic filed a timely notice of appeal.
II. DISCUSSION
We first discuss our standard of review and the constitutional requirements for
exercising specific personal jurisdiction over an out-of-state defendant. We then analyze
7
whether Old Republic has made a prima facie showing that these requirements have been
met as to Continental Motors. We begin and end our jurisdictional analysis at the first
step—whether Continental Motors purposefully directed its activities at Colorado. To
answer this question, we consider the contacts alleged by Old Republic under their
appropriate legal frameworks, as presented below. Comparing our case to other specific
jurisdiction cases involving similar contacts, we conclude that the record does not contain
evidence sufficient to establish jurisdiction here. We therefore affirm because Old
Republic has not met its burden.
A. Standard of Review
“We review de novo the district court’s dismissal for lack of personal
jurisdiction.” Soma Med. Int’l v. Standard Chartered Bank, 196 F.3d 1292, 1295 (10th
Cir. 1999). “When, as in this case, a district court grants a motion to dismiss for lack of
personal jurisdiction without conducting an evidentiary hearing, the plaintiff need only
make a prima facie showing of personal jurisdiction to defeat the motion.” Id.
(quotations omitted).9 “We resolve all factual disputes in favor of the plaintiff in
determining whether plaintiff has made a prima facie showing.” Benton v. Cameco
Corp., 375 F.3d 1070, 1074 (10th Cir. 2004) (quotations omitted).
9
The district court in Soma Medical likewise ruled on the defendant’s motion after
a period of limited jurisdictional discovery. 196 F.3d at 1295; see also In re Magnetic
Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir. 2003) (“Where plaintiff has
engaged in jurisdictional discovery, but no evidentiary hearing was conducted, the
plaintiff’s prima facie showing . . . must include an averment of facts that . . . would
suffice to establish jurisdiction over the defendant [if credited].” (quotations omitted)).
8
B. Legal Background
“The Due Process Clause of the Fourteenth Amendment constrains a State’s
authority to bind a nonresident defendant to a judgment of its courts.” Walden v. Fiore,
134 S. Ct. 1115, 1121 (2014). The law of the forum state and constitutional due process
limitations govern personal jurisdiction in federal court. Intercon, Inc. v. Bell Atl.
Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir. 2000); see Fed. R. Civ. P.
4(k)(1)(A). Colorado’s long-arm statute, Colo. Rev. Stat. § 13-1-124, extends
jurisdiction to the Constitution’s full extent. Benton, 375 F.3d at 1075; Mr. Steak, Inc. v.
District Court, 574 P.2d 95, 96 (Colo. 1978) (en banc). The personal jurisdiction
analysis here is thus a single due process inquiry. See Benton, 375 F.3d at 1075.
Due process requires both that the defendant “purposefully established minimum
contacts within the forum State” and that the “assertion of personal jurisdiction would
comport with ‘fair play and substantial justice.’” Burger King Corp. v. Rudzewicz, 471
U.S. 462, 476 (1985) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 320 (1945)).
Depending on their relationship to the plaintiff’s cause of action, an out-of-state
defendant’s contacts with the forum state may give rise to either general (all-purpose)
jurisdiction or specific (case-linked) jurisdiction. See Intercon, 205 F.3d at 1247; see
also Daimler AG v. Bauman, 134 S. Ct. 746, 754 (2014).
1. General Jurisdiction
General personal jurisdiction means that a court may exercise jurisdiction over an
out-of-state party for all purposes. See Daimler, 134 S. Ct. at 754. “A court may assert
general jurisdiction over foreign . . . corporations to hear any and all claims against them
9
when their affiliations with the State are so ‘continuous and systematic’ as to render them
essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v.
Brown, 564 U.S. 915, 919 (2011) (quoting Int’l Shoe, 326 U.S. at 317). “Because general
jurisdiction is not related to the events giving rise to the suit, courts impose a more
stringent minimum contacts test, requiring the plaintiff to demonstrate the defendant’s
continuous and systematic general business contacts.” Benton, 375 F.3d at 1080
(quotations omitted). Old Republic does not contend that Continental Motors’ Colorado
contacts satisfy the general jurisdiction standard, so only specific jurisdiction is at issue in
this appeal.
2. Specific Jurisdiction
Specific jurisdiction means that a court may exercise jurisdiction over an out-of-
state party only if the cause of action relates to the party’s contacts with the forum state.
See Daimler, 134 S. Ct. at 754. Even though a defendant’s forum state contacts may not
support general jurisdiction, they may still meet the less stringent standard for specific
jurisdiction if sufficiently related to the cause of action. See id. Specific jurisdiction
calls for a two-step inquiry: (a) whether the plaintiff has shown that the defendant has
minimum contacts with the forum state; and, if so, (b) whether the defendant has
presented a “compelling case that the presence of some other considerations would render
jurisdiction unreasonable.” Burger King, 471 U.S. at 476-77; Shrader v. Biddinger, 633
F.3d 1235, 1239-40 (10th Cir. 2011) (quotations omitted).
10
a. Minimum contacts
The minimum contacts test for specific jurisdiction encompasses two distinct
requirements: (i) that the defendant must have “purposefully directed its activities at
residents of the forum state,” and (ii) that “the plaintiff’s injuries must arise out of [the]
defendant’s forum-related activities.” Shrader, 633 F.3d at 1239 (quotations omitted);
see also Burger King, 471 U.S. at 475.10
i. “Purposeful direction” requirement11
The purposeful direction requirement “ensures that a defendant will not be haled
into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts, . . . or of
the unilateral activity of another party or a third person.” Burger King, 471 U.S. at 475
10
Because we hold that Old Republic has failed to make a prima facie showing of
purposeful direction, we do not reach the other elements of the specific jurisdiction
analysis. Accordingly, this section provides background primarily on the purposeful
direction requirement.
11
We usually use the term “purposeful direction” in the tort context and
“purposeful availment” in the contract context. See Dudnikov v. Chalk & Vermilion Fine
Arts, Inc., 514 F.3d 1063, 1077 (10th Cir. 2008). Here, Old Republic brings a strict
liability claim in tort, so we use the term “purposeful direction” throughout this opinion.
Even though it brings a tort claim, Old Republic relies on minimum contacts for
jurisdiction that concern contractual understandings between Continental Motors and
Colorado FBOs. In our analysis, we draw from cases that involve contractual minimum
contacts and that use the term “purposeful availment” because contract claims were
alleged.
In any event, the terms “purposeful direction” and “purposeful availment” denote
the same requirement. See id.at 1071 (explaining that although the purposeful direction
requirement “can appear in different guises” in the tort and contract contexts, these guises
have the “shared aim . . . [of] ensur[ing] that an out-of-state defendant is not bound to
appear to account for merely random, fortuitous, or attenuated contacts with the forum
state” (quotations omitted)); see also J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S.
873, 886 (2011) (using “purposefully directed” and “purposefully availed”
interchangeably).
11
(quotations omitted). Mere foreseeability of causing injury in another state is insufficient
to establish purposeful direction. See id. at 474. But “where the defendant deliberately
has engaged in significant activities within a State, . . . he manifestly has availed himself
of the privilege of conducting business there.” Id. at 475-76 (citations and quotations
omitted). Accordingly, “[i]t is presumptively not unreasonable to require him to submit
to the burdens of litigation in that forum.” Id. at 476.
This appeal implicates three frameworks for determining whether an out-of-state
defendant’s activities satisfy the purposeful direction requirement: (1) continuing
relationships with forum state residents (“continuing relationships”); (2) deliberate
exploitation of the forum state market (“market exploitation”); and (3) harmful effects in
the forum state (“harmful effects”). In cases involving contractual contacts between the
defendant and forum state residents, the purposeful direction analysis often employs the
first framework. See id. at 472-73. The Supreme Court articulated the latter two
frameworks in specific jurisdiction cases involving out-of-state media defendants’
national distribution of their printed material: Keeton v. Hustler Magazine, Inc., 465 U.S.
770 (1984) (market exploitation) and Calder v. Jones, 465 U.S. 783 (1984) (harmful
effects). The lower courts have since extended these latter frameworks to specific
jurisdiction cases involving internet content.
1) Continuing relationships with forum state residents
The typical purposeful direction analysis looks to the out-of-state defendant’s
“continuing relationships and obligations with citizens of [the forum state].” Burger
King, 471 U.S. at 473 (quotations omitted). The Supreme Court “ha[s] upheld the
12
assertion of jurisdiction over defendants who have purposefully ‘reached out beyond’
their State and into another by, for example, entering a contractual relationship that
‘envisioned continuing and wide-reaching contacts’ in the forum State.” Walden, 134 S.
Ct. at 1122 (2014) (brackets omitted) (quoting Burger King, 471 U.S. at 473).
“[A] defendant’s relationship with a plaintiff or third party, standing alone, is an
insufficient basis for jurisdiction.” Id. at 1123. Instead, we must evaluate the parties’
“prior negotiations and contemplated future consequences, along with the terms of the
contract and the parties’ actual course of dealing . . . in determining whether the
defendant purposefully established minimum contacts within the forum.” Burger King,
471 U.S. at 479. An out-of-state defendant’s solicitations of or direct communications
with forum state residents also provide “some evidence” suggesting purposeful direction.
Pro Axess, Inc. v. Orlux Distribution, Inc., 428 F.3d 1270, 1277 (10th Cir. 2005)
(quotations omitted).
2) Deliberate exploitation of the forum state market
An out-of-state defendant’s “continuous[] and deliberate[] exploit[ation] [of] the
[forum state] market” may also satisfy the purposeful direction requirement. Keeton, 465
U.S. at 781. In Keeton, the Supreme Court found purposeful direction based on an out-
of-state magazine publisher’s “regular monthly sales of thousands of magazines” in New
Hampshire, the forum state. Id. at 774. The Court reasoned that such regular sales
“cannot by any stretch of the imagination be characterized as random, isolated, or
fortuitous.” Id. It held that “[w]here . . . [the defendant] has continuously and
deliberately exploited the New Hampshire market, it must reasonably anticipate being
13
haled into court there in a libel action based on the contents of its magazine.” Id. at
781.12
Some circuit courts have applied the Keeton analysis in cases where the out-of-
state defendant’s only contacts with the forum state occurred over the internet or through
the media. For example, uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d 421 (7th Cir.
2010), concerned an out-of-state defendant that operated a domain name registration site.
The Seventh Circuit found purposeful direction because the defendant had “thoroughly,
deliberately, and successfully exploited the [forum state] market.” Id. at 427. The court
noted that “[forum state] consumers . . . ha[d] flocked to [the defendant] by the hundreds
of thousands and . . . sent many millions of dollars to the company each year.” Id. It also
relied on the defendant’s “extensive national advertising,” including “many television
advertisements on national networks . . . [and] extensive venue advertising and celebrity
and sports sponsorships.” Id. The court cited Keeton for the principle that “a typical
business that operates on a national scale with [the defendant’s] sales . . . [,] customer
base . . . , and . . . blanket of advertising in [the forum state] would unquestionably be
12
The Court in Keeton suggested that the defendant’s sales in the forum state
could support only specific jurisdiction, not general jurisdiction. Id. at 779-80 (“[The
defendant’s] activities in the forum may not be so substantial as to support jurisdiction
over a cause of action unrelated to those activities. But [the defendant] is carrying on a
part of its general business in New Hampshire, and that is sufficient to support
jurisdiction when the cause of action arises out of the very activity being conducted, in
part, in New Hampshire.” (emphasis added) (footnote and quotations omitted)). The
Court did not elaborate on what it means for a cause of action to “arise out of” the
defendant’s forum state activities. See id.
14
subject to [specific] personal jurisdiction there for claims arising from its business
activities that reach into the state.” Id. at 429.13
In contrast, the Seventh Circuit—again applying the Keeton analysis—declined to
find purposeful direction by an out-of-state defendant that operated an online
matchmaking service. See be2 LLC v. Ivanov, 642 F.3d 555, 558-59 (7th Cir. 2011). The
court held that the plaintiff had failed to show deliberate exploitation of the forum state
market. Id. at 559. The record “show[ed] that just 20 persons who listed [forum state]
addresses had at some point created free dating profiles on [the defendant’s website].”
Id. The court commented that, as far as it could tell from the record, “the 20 [forum state
residents] who created free profiles [on the defendant’s website] may have done so
unilaterally by stumbling across the website and clicking a button that automatically
published their dating preferences online.” Id.
3) Harmful effects in the forum state
Purposeful direction may also be established—even in the absence of continuing
relationships or market exploitation—when an out-of-state defendant’s intentional
conduct targets and has substantial harmful effects in the forum state. See Calder, 465
U.S. at 790-91. In Calder, the plaintiff, a California resident, brought a libel suit in a
California court against a reporter and an editor from Florida. Id. at 789. California was
13
GoDaddy went further than Keeton in that it considered not only the defendant’s
forum state sales of the relevant product but also its national advertising. The Seventh
Circuit reasoned that these broad contacts supported specific jurisdiction because the
plaintiff’s claim arose “directly out of [the defendant’s domain name registration
services] bought by customers it has solicited in [the forum state] and many other states.”
Id. at 432.
15
also “the focal point both of the story and of the harm suffered.” Id. at 789. The
Supreme Court held “that jurisdiction over [the defendants] in California is proper
because of their intentional conduct in Florida calculated to cause injury to [the plaintiff]
in California.” Id. at 791.14
In Walden, the Court clarified its holding in Calder, emphasizing that “the plaintiff
cannot be the only link between the defendant and the forum.” 134 S. Ct. at 1122. 15 It
noted that the defendants’ “ample” forum contacts in Calder also included the following:
“The defendants relied on phone calls to [forum state sources] for the information in their
article; they wrote the story about the plaintiff’s activities in [the forum state]; they
caused reputational injury in [the forum state] by writing an allegedly libelous article that
was widely circulated in the State; and the ‘brunt’ of that injury was suffered by the
plaintiff in that State.” Id. at 1123 (quoting Calder, 465 U.S. at 789). The Court also
suggested that the defendants’ connection to the forum state in Calder “was largely a
function of the nature of the libel tort.” Id. at 1124. “However scandalous a newspaper
article might be, it can lead to a loss of reputation only if communicated to (and read and
14
In Calder, the Court could not rely on the market exploitation basis for personal
jurisdiction because, unlike in Keeton, the plaintiff sued the reporter and the editor who
worked on the allegedly defamatory article rather than their corporate employer. 465
U.S. at 790 (“[Defendants] are correct that their contacts with [the forum state] are not to
be judged according to their employer’s activities there.”). The Court therefore relied
instead on the article’s harmful effects to establish personal jurisdiction over the
defendants. Id.
15
In Walden, the plaintiffs brought a Bivens civil rights action against an out-of-
state police officer (working as a deputized federal Drug Enforcement Administration
agent) for out-of-state conduct that allegedly violated the forum state plaintiffs’ Fourth
Amendment rights. Id.
16
understood by) third persons. . . . Indeed, because publication to third persons is a
necessary element of libel . . . the defendants’ intentional tort actually occurred in [the
forum state].” Id. (citations omitted).
This court has summarized the Calder effects test to require three elements: “(a)
an intentional action . . . , that was (b) expressly aimed at the forum state . . . , with (c)
knowledge that the brunt of the injury would be felt in the forum state.” Dudnikov v.
Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1072 (10th Cir. 2008). In Dudnikov,
the plaintiffs, online auctioneers, sought a declaratory judgment that their auction did not
infringe copyrights belonging to the out-of-state defendants. Id. at 1077. The defendants
had sent a notice of claimed infringement to the online auction website (which was
operated by a third party), with the specific intention of terminating the plaintiffs’
auction. Id. at 1078. The record established that the defendants had known that the
plaintiffs’ business was based in the forum state. Id. at 1077. Applying Calder, we
found purposeful direction because the defendants had intentionally caused harm to the
plaintiffs’ business in the forum state. Id. at 1077-78. 16
Some courts have applied derivatives of the Calder effects test in determining
whether a defendant’s internet activities that cause harmful effects in the forum state may
support personal jurisdiction. Such cases usually involve claims like defamation and
16
After Dudnikov, the Supreme Court reemphasized the importance of the
defendant’s intentional contacts with the forum state, “not just to a plaintiff who lived
there.” Walden, 134 S. Ct. at 1122.
17
trademark infringement, which are generally considered intentional torts.17 In Shrader,
we cited with approval this kind of “Calder-derived analysis for specific jurisdiction in
the internet context.” See 633 F.3d at 1241.18 We noted that “it is necessary to adapt the
analysis of personal jurisdiction to this unique circumstance by placing emphasis on the
internet user or site intentionally directing his/her/its activity or operation at the forum
state rather than just having the activity or operation accessible there.” Id. at 1240.
Accordingly, “[t]he maintenance of a web site does not in and of itself subject the owner
or operator to personal jurisdiction, even for actions relating to the site, simply because it
can be accessed by residents of the forum state.” Id. at 1241. Instead, we “look to
indications that a defendant deliberately directed its message at an audience in the forum
state and intended harm to the plaintiff occurring primarily or particularly in the forum
state.” Id.
ii. “Arising out of” requirement
Step two of the minimum contacts test requires us to determine whether the
plaintiff’s injuries “arise out of” the defendant’s forum-related activities. See id. at 1239.
17
See, e.g., Clemens v. McNamee, 615 F.3d 374, 379 (5th Cir. 2010) (emphasizing
“Calder’s requirement that the forum be the focal point of the story” in evaluating
“personal jurisdiction against the defaming defendant” (quotations omitted)); Licciardello
v. Lovelady, 544 F.3d 1280, 1288 (11th Cir. 2008) (holding that the plaintiff’s trademark
infringement allegations “satisf[ied] the Calder effects test for personal jurisdiction—the
commission of an intentional tort, expressly aimed at a specific individual in the forum
whose effects were suffered in the forum”).
18
In endorsing this approach, we declined to take a definitive position on the
sliding-scale test proposed in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119
(W.D. Pa. 1997) (proposing a sliding scale based on a website’s relative interactivity).
18
“In order for a court to exercise specific jurisdiction over a claim, there must be an
‘affiliation between the forum and the underlying controversy, principally, an activity or
an occurrence that takes place in the forum State.’” Bristol-Myers Squibb Co. v. Super.
Ct. of Cal., 137 S. Ct. 1773, 1781 (2017) (alterations omitted) (quoting Goodyear, 564
U.S. at 919). “When there is no such connection, specific jurisdiction is lacking
regardless of the extent of a defendant’s unconnected activities in the State.” Id.; see also
Goodyear, 564 U.S. at 930 n.6 (“[E]ven regularly occurring sales of a product in a State
do not justify the exercise of jurisdiction over a claim unrelated to those sales.”).
b. Fair play and substantial justice (reasonableness)
Even if a plaintiff has met its burden of establishing minimum contacts, “[w]e
must still inquire whether the exercise of personal jurisdiction would offend traditional
notions of fair play and substantial justice.” Shrader, 633 F.3d at 1240 (quotations
omitted); see also Int’l Shoe, 326 U.S. at 316. “In doing so, we are cognizant of the fact
that, with minimum contacts established, it is incumbent on defendants to present a
compelling case that the presence of some other considerations would render jurisdiction
unreasonable.” Dudnikov, 514 F.3d at 1080 (quotations omitted).
We determine whether jurisdiction is reasonable by considering the following
factors: “(1) the burden on the defendant, (2) the forum state's interest in resolving the
dispute, (3) the plaintiff’s interest in receiving convenient and effective relief, (4) the
interstate judicial system's interest in obtaining the most efficient resolution of
controversies, and (5) the shared interest of the several states in furthering fundamental
social policies.” Pro Axess, 428 F.3d at 1279-80 (quotations omitted).
19
C. Analysis
We affirm the district court’s grant of Continental Motors’ motion to dismiss. As
discussed above, specific personal jurisdiction requires (1) minimum contacts to show
that (a) the defendant purposefully directed its activities at the forum state, and (b) the
plaintiff’s cause of action arose out of those activities;19 and (2) the exercise of
jurisdiction would be reasonable and fair. We resolve this case on the purposeful
direction requirement alone. We analyze Continental Motors’ Colorado contacts under
the three purposeful direction frameworks implicated by the arguments on appeal: (1)
continuing relationships; (2) market exploitation; and (3) harmful effects. On appeal, the
only contacts Old Republic relies on for specific personal jurisdiction are those relating to
Continental Motors’ website, its online service manuals, and Arapahoe Aero’s ongoing
participation in the FBO Program.20
19
The purposeful direction and “arising out of” requirements together comprise
the minimum contacts analysis. See Shrader, 633 F.3d at 1239. Courts do not always
address these requirements separately or in the same sequential order. See, e.g., Monge v.
RG Petro-Mach. (Grp.) Co., 701 F.3d 598, 617 (10th Cir. 2012) (“For specific
jurisdiction, [the plaintiff’s] injuries must arise out of or relate to activities that [the
defendant] purposefully directed at residents of the forum.”); see also 4A C. Wright & A.
Miller, Federal Practice and Procedure: Civil § 1069 (4th ed., April 2017 update) (listing
the “arising out of” requirement first and the purposeful direction requirement second).
20
In the district court, Old Republic also alleged the following contacts: (1)
Continental Motors’ distribution contract with a Colorado distributor of aircraft parts and
attendant sales of $481,230 in the five-year period leading up to the Aircraft accident; (2)
its sales of $2,891,663 directly to Colorado customers in the same period; (3) its
acceptance of warranty claims from Colorado customers in the same period; (4) its
mailings of promotional materials to Colorado customers from 2012 to 2013; and (5) its
enrollment of 19 other Colorado FBOs in the FBO Program in the five-year period
leading up to the Aircraft accident.
20
We conclude that Old Republic has not made a prima facie showing based on
these contacts under any of the relevant purposeful direction frameworks.21 Although
Old Republic points to some continuing relationship contacts, we reject specific
jurisdiction here based on comparing this case with other relevant precedent. Because we
hold that Old Republic has failed to carry its burden to show purposeful direction, we do
not reach the “arising out of” and reasonableness components of the specific jurisdiction
analysis.
1. Continuing relationships
Old Republic contends that jurisdiction is proper based on the binding agreement
and continuing relationship resulting from Arapahoe Aero’s enrollment in Continental
Motors’ FBO Program. But Old Republic has failed to show purposeful direction under
the continuing relationships framework.
We do not consider contacts (1)-(4) because Old Republic does not argue them on
appeal. As to contact (5), even assuming—without deciding—that Continental Motors’
relationships with the 19 other FBOs are relevant to the specific (as opposed to general)
jurisdiction analysis, we conclude, as explained below, that they do not establish
purposeful direction.
21
Old Republic does not base its jurisdictional argument on Continental Motors’
sales of the allegedly defective magnetos. Aplt. Br. at 11 (“The product here is not
primarily the magnetos sold with the airplane, but the service manuals . . . that control
how the magnetos are to be inspected and maintained.”). We therefore have no occasion
to consider whether specific jurisdiction might be proper under the stream-of-commerce
theory. See generally J. McIntyre Machinery, 564 U.S. 873; Asahi Metal Indus. Co. v.
Super. Ct. of Cal., 480 U.S. 102 (1987). The stream-of-commerce theory typically
governs cases in which the defendant sells a defective product to a third party who takes
the product into the forum state. See Asahi, 480 U.S. at 109-112. Absent the magnetos,
the facts of the present case take us outside the stream-of-commerce theory because
Continental Motors engaged in direct sales of the FBO Program to Colorado customers.
21
The bare fact that Continental Motors entered into a legal relationship with
Arapahoe Aero, a Colorado entity, cannot establish sufficient contacts to satisfy the
purposeful direction requirement. See Burger King, 471 U.S. at 478 (“If the question is
whether an individual’s contract with an out-of-state party alone can automatically
establish sufficient minimum contacts in the other party’s home forum, we believe the
answer clearly is that it cannot.”).22 We must instead determine whether Continental
Motors “reach[ed] out beyond one state and create[d] continuing relationships and
obligations with” Arapahoe Aero. See id. at 473 (quotations omitted). In making this
determination, we must evaluate (a) the parties’ “prior negotiations,” (b) their
“contemplated future consequences,” (c) “the terms of the[ir] contract,” and (d) “the
parties’ actual course of dealing.” Id. at 479. The record before us shows that the parties
contemplated some potentially ongoing consequences of Arapahoe Aero’s participation
in the FBO program. But the absence of prior negotiations, long-term contractual
commitments, or any significant course of dealing distinguish this case from previous
cases finding purposeful direction under the continuing relationships framework.
a. Prior negotiations
Old Republic has not alleged any facts suggesting that Continental Motors and
Arapahoe Aero communicated before Arapahoe Aero’s enrollment in the FBO Program
in 1996. It alleges only that Arapahoe Aero “agreed to [Continental Motors’] terms and
22
Continental Motors disputes Old Republic’s characterization of the FBO
Program as a contract or binding agreement. Taking the undisputed facts pled by Old
Republic as true and viewing them in the light most favorable to it, we agree that
Arapahoe Aero’s participation in the FBO Program established a contract.
22
conditions and paid . . . a monetary fee for the privilege” of participating in the FBO
Program. App., Vol. I at 48-49. These allegations provide no indication that Continental
Motors engaged in prior negotiations with Arapahoe Aero.
b. Contemplated future consequences
Old Republic alleged that, as a consequence of Arapahoe Aero’s participation in
the FBO Program, Continental Motors “lists Arapahoe Aero [on] its [FBO Locator
webpage], and grants Arapahoe Aero electronic access to . . . maintenance, service and
support, and overall manuals over the internet.” Id. at 43. Additional future
consequences supported by the record include: (1) Arapahoe Aero’s right to send two
representatives to a week-long training at the Continental Motors factory in Mobile,
Alabama; (2) a reward of $500 for every Continental Motors engine Arapahoe Aero
installed; and (3) access to dedicated customer support. Id. at 58. Because Continental
Motors advertised these benefits on its website, the parties appeared to contemplate them
as potential future consequences of Arapahoe Aero’s participation in the FBO Program.
The FBO Locator webpage and Arapahoe Aero’s one-time opportunity to send
representatives to attend a training in Alabama do not show that the parties “envisioned
continuing and wide-reaching contacts” between Continental Motors and Colorado. See
Burger King, 471 U.S. at 480. The rewards system and the dedicated customer support
provide stronger support because they create the possibility of repeated communications
between Continental Motors and Arapahoe Aero. Even though Old Republic makes no
specific allegations that Arapahoe Aero ever took advantage of these benefits, the option
to do so presumably remained open at all relevant times. Indeed, the FBO Program
23
webpage likens the availability of Continental Motors’ “[h]ighly-trained technical staff”
to “having your own dedicated technical service representative at your facility.” App.,
Vol. I at 58.
c. Terms of the contract
The FBO T&C provides little indication that Continental Motors “reach[ed] out
beyond one state and create[d] continuing relationships and obligations with” Arapahoe
Aero. See Burger King, 471 U.S. at 473 (quotations omitted). Burger King provides an
instructive contrast. In Burger King, the out-of-state defendant had negotiated and
entered into a “carefully structured 20-year [franchise agreement] that envisioned
continuing and wide-reaching contacts with [the franchisor] in [the forum state.]” Id. at
480. The agreement’s provisions included that: (1) forum state law governed the
franchise relationship, (2) the defendant franchisee paid an initial $40,000 franchise fee
and committed to paying monthly fees to the franchisor’s headquarters in the forum state,
(3) the defendant agreed to abide by the franchisor’s “exacting regulation of virtually
every conceivable aspect of [the defendant’s] operations,” and (4) the franchisor worked
directly with the defendant in attempting to resolve major problems. Id. at 465-66.
Based on these provisions, especially the defendant’s “acceptance of the long-term and
exacting regulation of his business from [the franchisor’s forum state] headquarters,” the
Supreme Court found purposeful direction on the defendant’s part. Id. at 480-81.
24
In contrast, Arapahoe Aero’s annual payments of the FBO Program fee created at
most one-year agreements with minimal obligations.23 In exchange for an FBO’s one-
time credit card payment, the FBO T&C seemingly obligates Continental Motors to
“initiate a FBO Reward payment” upon verifying that a participating FBO installed one
of its engines. App., Vol. I at 63. But it also states that Continental Motors “reserves the
right to make changes or terminate this program at any time.” Id. Besides the rewards
program, the FBO T&C contains no mention of the other benefits advertised on the FBO
Program webpage. Nor does it contain any choice-of-law provision. The FBO T&C,
unlike the franchise agreement in Burger King, contemplates only short-term and
minimal obligations.
d. Actual course of dealing
Old Republic also fails to demonstrate an actual course of dealing between
Continental Motors and Arapahoe Aero—such as solicitations or direct
communications—that suggests purposeful direction. See Pro Axess, Inc., 428 F.3d at
1277. In contrast, the plaintiffs in Pro Axess made such a demonstration. In Pro Axess,
the out-of-state defendant, a sunglasses distributor, had contracted with the plaintiff, a
forum state business, for the plaintiff’s services in arranging for the manufacture and
delivery of 28,000 frames. Id. at 1275. We found purposeful direction based on two
factors. First, the defendant had sought to manufacture low-cost frames in Asia and
“specifically sought out” the plaintiff for its “long-standing business relationships with
23
Old Republic does not tell us, and the record does not indicate, whether the
agreement renews automatically upon expiration.
25
many manufacturers” there. Id. at 1277. “While not conclusive, this solicitation is itself
some evidence suggesting purposeful availment.” Id. (quotations omitted). Second, the
defendant and its subsidiary—which had conducted previous business dealings with the
plaintiff—also “exchanged various direct communications with” the plaintiff. Id. These
communications included “numerous faxes, letters, and phone calls with [the plaintiff]
about the order itself and the potential for modifications to the order.” Id. at 1278.
“Although phone calls and letters are not necessarily sufficient in themselves to establish
minimum contacts, such materials provide additional evidence that [the defendant]
pursued a continuing business relationship with a [forum state] corporation.” Id. at 1277-
78 (citation and quotations omitted).
In contrast, Old Republic does not allege that Continental Motors specifically
sought out Arapahoe Aero’s business or engaged in any direct communications with it.
Continental Motors may have sought FBO Program subscriptions through its webpage,
which describes the program’s benefits and encourages FBOs to join. But this webpage
shows only that Continental Motors sought the business of any FBO in the world, unlike
in Pro Axess, where the defendant “specifically solicited the contract at issue in this
case.” Id. at 1277 n.3. Nor does Old Republic allege any direct communications
between Arapahoe Aero and Continental Motors relating to the FBO Program. The
record—in particularly the FBO T&C —allows us to infer that at least one email
communication must have occurred. App., Vol. I at 62 (“Once your membership is
approved, you will receive notification via email asking you to activate your account.”).
But beyond this initial confirmation email, no other direct communications between
26
Arapahoe Aero and Continental Motors apparently took place. The fact that Continental
Motors did not seek out Arapahoe Aero’s business and the dearth of direct
communications between the parties distinguish this case from Pro Axess.
e. Comparison with other cases
We next compare this case with this court’s relevant precedents on purposeful
direction and continuing relationships. As discussed above, we credit Old Republic’s
evidence as tending to show that Continental Motors and Arapahoe Aero contemplated
some ongoing future consequences to their relationship. In particular, Continental
Motors’ online assurances of dedicated customer service for FBOs suggest that it
envisioned potential future exchanges with Arapahoe Aero, a Colorado business. But
Old Republic has not alleged that any such exchanges actually took place. Nor has it
demonstrated any prior negotiations, contract terms, or course of dealing between
Continental Motors and Arapahoe Aero suggesting a continuing relationship.
In Soma Medical, this court held that an international banking institution that had
wrongfully disbursed funds from the forum state plaintiff’s international account did not
purposefully direct its activities at the forum state. 196 F.3d at 1294-95. In doing so, we
“examine[d] the quantity and quality of [the defendant’s] contacts with [the forum state],
including ‘prior negotiations and contemplated future consequences, along with the terms
of the contract and the parties’ actual course of dealing.’” Id. at 1298 (quoting Burger
King, 471 U.S. at 479). Ignoring contacts “unrelated to” the plaintiff’s claims, we
considered the defendant’s following contacts with the forum state: (1) mailing a
signature card to the plaintiff in the forum state; (2) sending two letters to the plaintiff’s
27
forum state location soliciting signature verification; (3) initiating 14 other written
communications with the plaintiff concerning its account; (4) creating an account number
for the plaintiff, which acknowledged its forum state address; and (5) creating internal
records of the plaintiff’s account activities. See id. We found these contacts alone
insufficient to show purposeful direction for two reasons: (1) based on the record, the
plaintiff failed to show that the defendant solicited the plaintiff’s business, and (2) the
limited number of communications concerning the account did not suffice. Id. at 1299.
In contrast to Soma Medical, we found purposeful direction in Benton based on the
out-of-state defendant’s joint venture to conduct uranium transactions with the plaintiff, a
forum state resident. 375 F.3d at 1073. Noting at the outset that this was a “very close
case,” we determined that these contacts sufficed to establish purposeful direction. Id. at
1076-78.24 We found that “[t]he ‘prior negotiations’ and the ‘contemplated future
consequences’ of the [agreement] centered around the continuing relationship between
[the defendant] and [the plaintiff]” for two reasons. Id. at 1077. First, under the
agreement, “the business end of the transactions—the brokering of the deals, the
coordination of the parties, the exchange of money and information between the parties,
and the decision-making behind the joint venture—would take place . . . partially in [the
forum state].” Id. Second, “[a]lthough phone calls and letters are not necessarily
sufficient in themselves to establish minimum contacts, the correspondence exchanged
24
Although the defendant’s contacts satisfied the minimum contacts test (which
includes the purposeful direction requirement), we nevertheless held that specific
jurisdiction was improper based on the fair play and substantial justice (or
reasonableness) prong of the due process analysis. Benton, 196 F.3d at 1081.
28
between [the parties] during the negotiation of the [agreement][25] provides additional
evidence that [the defendant] pursued a business relationship with a [forum state]
business.” Id. (citation and quotations omitted).26
Here, Old Republic has shown some—but not enough—contacts to establish
purposeful direction under the continuing relationships framework. It has shown
recurring contacts between Continental Motors and Arapahoe Aero—annual payments
for FBO Program membership—over the course of 20 years. And based on its website,
Continental Motors contemplated some future contacts—such as providing dedicated
customer support—with participating FBOs like Arapahoe Aero. That said, the FBO
T&C created at most one-year agreements, with minimal obligations, each time
Continental Motors accepted Arapahoe Aero’s payments. Old Republic also has not
shown that Continental Motors specifically sought out Arapahoe Aero or negotiated an
agreement with it. And it has pointed to only minimal direct communications between
Continental Motors and Arapahoe Aero.
25
This correspondence included sending several employees to the plaintiff’s office
in the forum state to conduct due diligence review. Benton, 196 F.3d at 1077.
26
See also Marcus Food Co. v. DiPanfilo, 671 F.3d 1159, 1163 (10th Cir. 2011)
(finding purposeful direction based on the defendant’s 10-year agency relationship with
the forum state plaintiff, under which the defendant (1) communicated with the plaintiff’s
staff in the forum state on at least a monthly basis, (2) submitted expenses reimbursement
requests to the plaintiff’s forum state office, and (3) personally came to the forum state at
least twice as a result of the agency relationship); AST Sports Sci., Inc. v. CLF
Distribution Ltd., 514 F.3d 1054, 1059-60 (10th Cir. 2008) (finding purposeful direction
when the defendant (1) distributed the forum state plaintiff’s products for seven years
under an agreement the defendant had solicited, (2) placed orders with the plaintiff by
phone fax, or email, and (3) received product shipments from the forum state).
29
Overall, the record makes this case more like Soma Medical than like Burger
King, Pro Axess, or Benton.27 The record here falls short of the circumstances suggesting
purposeful direction in the latter cases. It fails to show that Continental Motors
specifically sought to do business, negotiated a contract envisioning significant and long-
term obligations, or conducted frequent and regular communications with Arapahoe
Aero. Old Republic therefore has not sufficiently established purposeful direction based
on Continental Motors’ continuing relationship with Colorado-based Arapahoe Aero.28
2. Market Exploitation
Old Republic contends that “Continental Motors clearly availed itself of the
Colorado market . . . and cannot complain about being held to answer in Colorado for
defective and unreasonably dangerous manuals it distributed [t]here.”29 Aplt. Reply Br.
27
In reaching this determination, we do not rely on Continental Motors’ attempts
to characterize Arapahoe Aero’s enrollment in the FBO Program and its access to the
online manuals as a “unilateral” and “automatic” process. See Aplee. Br. at 17-19. The
record contradicts this characterization. See, e.g., App, Vol. I at 62 (provision in the FBO
T&C stating that Continental Motors “will review [an FBO’s] submitted profile and
determine qualifications and eligibility for the program” before approving membership).
To the extent the evidence presents a factual ambiguity, we resolve it in favor of Old
Republic. See Benton, 375 F.3d at 1074.
28
Even if we considered the 19 Colorado FBOs besides Arapahoe Aero—
assuming that Continental Motors’ contacts with them satisfy the “arising out of” element
of the minimum contacts analysis—our conclusion would not change. The record
contains no information on Continental Motors’ contacts with the other FBOs beyond
what we have already determined fails to show purposeful direction.
29
Again, although its complaint also alleged defective magnetos, Old Republic has
waived any jurisdictional argument based on Continental Motors’ sales of magnetos to
Colorado customers. See Aplt. Br. at 11.
30
at 2. But Old Republic has failed to show purposeful direction based on Continental
Motors’ website and its sales of membership in the FBO Program to Colorado customers.
Continuous and deliberate exploitation of the forum state market can satisfy the
minimum contacts standard for specific jurisdiction over an out-of-state defendant in a
suit arising from its related sales there. See Keeton, 465 U.S. at 781. Factors suggesting
purposeful direction based on forum state market exploitation include: (a) high sales
volume and large customer base and revenues, and (b) extensive nationwide advertising
or ads targeting the forum state. See id. (sales); GoDaddy, 623 F.3d at 427 (sales,
revenues, customer base, and nationwide advertising); Advanced Tactical Ordnance Sys.,
LLC v. Real Action Paintball, Inc., 751 F.3d 796, 803 (7th Cir. 2014) (suggesting that
jurisdiction may have been proper if “there were evidence that a defendant in some way
targeted residents of a specific state, perhaps through geographically-restricted online
ads”). Old Republic has not shown sufficiently extensive Colorado sales, revenues, or
advertising relating to the FBO Program to support jurisdiction over Continental Motors
under the Keeton market exploitation framework.
a. Sales volume, customer base, and revenues
“Substantial” and “regular” sales in the forum state can constitute deliberate
exploitation of its market. See Keeton, 465 U.S. at 774, 781. Old Republic alleged that
“[d]uring the 5 years preceding the crash at issue, [Continental Motors] entered into
agreements with Arapahoe Aero and 19 other Colorado-based FBO’s, whereby Arapahoe
Aero (and other Colorado FBO’s) paid [Continental Motors] subscription fees to gain
24/7 access to [its online service manuals].” App., Vol. I at 44. Membership in the FBO
31
Program costs about $240 annually, though in 1996 it cost about $1,000.30 The FBO
Program’s annual membership of 20 paying Colorado FBOs pales in comparison to the
regular and substantial magazine sales made in the forum state by the out-of-state
publisher in Keeton. See 465. U.S. at 772 (defendant sold “10 to 15,000 copies of [its]
magazine in [the forum state] each month”). 31 Nor do Continental Motors’ FBO
Program customer base and revenues come near to the defendant’s in GoDaddy. See 623
F.3d at 432-33 (defendant sold to “hundreds of thousands of customers in the [forum]
state” and earned “millions of dollars in revenue from the state each year”). 32
b. Advertising efforts
Old Republic also contends that Continental Motors deliberately exploited the
Colorado market because it engaged in a nationwide marketing effort to all FBOs
throughout the country. Aplt. Reply Br. at 2-3. In GoDaddy, as Old Republic points out,
30
Continental Motors argues that, by the time Arapahoe Aero inspected the
Aircraft in December of 2013, all the manuals Arapahoe Aero allegedly consulted were
available for free online. This argument speaks to whether Old Republic’s claim “arises
under” Continental Motors’ sales of FBO Program membership in Colorado. Because we
hold that Old Republic’s personal jurisdiction argument fails under the first step of the
minimum contacts analysis—purposeful direction—we need not reach step two—
whether Old Republic’s claim arises out of the minimum contacts.
31
The record also suggests that Continental Motors may have made individual
sales of its online manuals outside of the FBO Program, but Old Republic does not make
any allegations relating to such sales.
32
Old Republic argues that the low volume of sales and number of customers
should be taken in context, because “[t]here are not millions of FBO’s in Colorado, nor
are there millions of airplane owners.” Aplt. Reply Br. at 6. Although we agree and do
consider the context, we nevertheless cannot conclude that Continental Motors
deliberately exploited the Colorado market, looking solely at the sales of FBO Program
memberships—as opposed to its broader sales of its products, which are not at issue here.
32
the Seventh Circuit found purposeful direction as to an out-of-state defendant that
operated a domain name registration website, in part based on its extensive “national
advertising campaign” on behalf of its site. 623 F.3d at 429; see Aplt. Reply Br. at 3.
The defendant’s advertising campaign included “many television advertisements on
national networks . . . [and] extensive venue advertising and celebrity and sports
sponsorships.” GoDaddy, 623 F.3d at 427.
Continental Motors’ marketing efforts on behalf of its FBO Program bear little
resemblance to the defendant’s sustained national advertising campaign in GoDaddy.
The record contains no evidence that Continental Motors launched national television
commercials, placed physical advertisements in Colorado venues, or obtained celebrity
sponsorships for the FBO Program. Indeed, the record evinces only one marketing
platform—Continental Motors’ FBO Program webpage.33 Nor does Old Republic alert
us to any FBO Program marketing targeted at Colorado, such as geographically-restricted
online ads. See Advanced Tactical Ordnance, 751 F.3d at 803 (suggesting that
geographically-restricted ads may provide some evidence of purposeful direction).
****
Contrary to Old Republic’s assertions, therefore, Continental Motors’ FBO
Program sales, revenues, customer base, and marketing efforts more closely resemble the
33
Although Old Republic furnished evidence of substantial solicitations and
mailings from Continental Motors to its Colorado customers in the district court, it does
not mention them in its brief and therefore has waived any argument for jurisdiction
based on these contacts on appeal. In any event, these solicitations do not relate to the
FBO Program, from which Old Republic’s cause of action allegedly arises.
33
defendant’s in Ivanov, a case decided by the Seventh Circuit shortly after GoDaddy. In
Ivanov, the court declined to find purposeful direction based on the out-of-state defendant
operation of an online matchmaking service used by 20 forum state residents. 642 F.3d
at 559 (“We see no evidence that . . . might make this case more comparable to
GoDaddy’s massive and successful exploitation of the [forum state] market . . . through
an advertising campaign that produced hundreds of thousands of customers in the state
and millions of dollars in annual revenues.”).
In light of the foregoing, Old Republic has not established purposeful direction
based on Continental Motors’ marketing and sales of FBO Program membership to
Colorado customers.
3. Harmful Effects
Old Republic seeks to establish purposeful direction based on the harmful effects
of Continental Motors’ defective manuals in Colorado—the damage to the Aircraft.
Even assuming—without deciding—that the harmful effects framework applies in a strict
liability action—Old Republic has failed to show purposeful direction under this
framework.34
34
As discussed above, Calder established the harmful effects test in the
defamation context, and there is reason to question its applicability in the circumstances
here. In Calder, the Supreme Court noted that the defendants were accused of the
intentional tort of defamation and were “not charged with mere untargeted negligence,”
let alone strict products liability. 465 U.S. at 789. Although we applied a Calder-derived
analysis in the internet context in Shrader—also a defamation case—we focused
primarily on the “express aiming” requirement rather than on the effects felt in the forum
state. See 633 F.3d at 1241. Moreover, the Supreme Court has recently suggested that
the Calder effects test does not extend beyond the defamation context. Walden, 134 S.
Ct. at 1123-24 (“The crux of Calder was that the reputation-based ‘effects’ of the alleged
34
Old Republic argues that “not only did [Continental Motors] knowingly sell its
publications to Arapahoe Aero in Colorado, but it knew that they would be used by
Arapahoe Aero nowhere else but Colorado, and that any harmful effects of the
publications would be felt in Colorado.” Aplt. Br. at 17. But the Supreme Court recently
clarified that the Calder effects test requires showing more than simply harm suffered by
a plaintiff who resides in the forum state. Walden, 134 S. Ct. at 1125 (“The proper
question is not where the plaintiff experienced a particular injury or effect but whether
the defendant’s conduct connects him to the forum in a meaningful way.”). In the
internet context, this court has stated that “merely posting information on the internet
does not, in itself, subject the poster to personal jurisdiction wherever that information
may be accessed.” Shrader, 633 F.3d at 1244. Instead, “courts look to indications that a
defendant deliberately directed its message at an audience in the forum state and intended
harm to the plaintiff occurring primarily or particularly in the forum state.” Id. at 1241. 35
Old Republic has failed to allege facts supporting its conclusory claim that
Continental Motors “targeted its information to . . . Colorado.” See Aplt. Br. at 12.
Continental Motors’ mere awareness that Colorado FBOs had enrolled in the FBO
Program does not amount to targeting Colorado. See Dudnikov, 514 F.3d at 1077 (“We
libel connected the defendants to [the forum state], not just to the plaintiff. The strength
of that connection was largely a function of the nature of the libel tort.”).
35
We do not take the “intending harm” language in Shrader literally to mean that
the defendant must actually intend to harm forum state residents, as this would foreclose
jurisdiction over most, if not all, out-of-state defendants. We instead ask whether the
defendant intended its online content to create effects specifically in the forum state.
35
surely agree that under Calder the mere foreseeability of causing an injury in the forum
state is, standing alone, insufficient to warrant a state exercising its sovereignty over an
out-of-state defendant.”). Nothing about Continental Motors’ FBO Program webpage or
its service manuals appears deliberately directed at Colorado, either in terms of its
content or its intended audience.36 Old Republic’s recognition that FAA regulations
require Continental Motors to make its service manuals available to certified repair
stations and FBOs further bolsters this conclusion. 37 Because the FAA mandate
obligates it to make service manuals available to any FBO subject to federal regulation,
Continental Motors needed to target its manuals’ content at an audience broader than
only Colorado FBOs to comply with this requirement.
In light of the foregoing, Old Republic has not established purposeful direction
under the Calder harmful effects framework based on Continental Motors’ online
36
The FBO Locator page—which allows patrons to search for FBOs by country,
state, and city—contains some geographic content insofar as it allows Colorado residents
to look up Colorado FBOs. But Continental Motors makes this search function available
to anyone anywhere. In any event, the “arising out of” requirement likely bars
consideration of the FBO Locator page because it bears no causal relation to Old
Republic’s alleged harm. See Shrader, 633 F.3d at 1246 n.8 (stating that the “arising out
of” requirement includes “a true causal element”).
37
Continental Motors argues that the FAA mandate “establishes, per se, that
posting [the manuals] on [its] website is not targeted to Colorado or any other individual
state.” Aplee. Br. at 22. We do not rely on this per se argument because the mandate
does not preclude Continental Motors from taking other measures to target its website
and FBO Program content at Colorado.
36
publication of allegedly defective service manuals and the resulting damage to the
Aircraft.38
****
Old Republic has failed to show that Continental Motors pursued continuing
relationships with Colorado residents, deliberately exploited the Colorado market, or
targeted defective content at Colorado. At most, the record supports the following
contacts: (1) Continental Motors maintained a geographically-neutral website that
advertised the FBO Program and allowed participants, including Colorado FBOs, to
access online service manuals and bulletins; (2) it entered into repeated one-year
agreements, which it did not specifically seek out or negotiate, with 20 Colorado FBOs in
the five years preceding the Accident; (3) it contemplated some ongoing obligations—
such as providing dedicated customer support—for the duration of these agreements; (4)
it listed the FBOs on its website; (5) it sent one email to each FBO with account
activation instructions; (6) it earned $5,200 a year from the FBO Program; (7) one of the
FBOs, Arapahoe Aero, has participated in the FBO Program since 1996; and (8)
Arapahoe Aero’s reliance on Continental Motors’ allegedly defective, geographically-
neutral online content allegedly caused a financial loss to Old Republic’s subrogor in
Colorado.
Although not altogether without force, these contacts fall short of the purposeful
direction requirement in light of the foregoing analysis. “[A] defendant’s relationship
38
Even were we to consider the 19 other Colorado FBOs—assuming that Old
Republic’s claim “arises out of” these contacts—our analysis would not change. The
record does not show any harmful effects to the other FBOs caused by the Manual.
37
with a plaintiff or third party, standing alone, is an insufficient basis for jurisdiction.”
Walden, 134 S. Ct. at 1123. Rather, “there [must] be some act by which the defendant
purposefully avails itself of the privilege of conducting activities within the forum State.”
Burger King, 471 U.S. at 475 (quotations omitted). In this case, Old Republic has failed
to demonstrate a purposeful act on Continental Motors’ part by which it “established . . .
meaningful contacts, ties, or relations” with Colorado. Id. at 471 (quotations omitted).
We therefore hold that Old Republic has failed to make a prima facie showing of specific
personal jurisdiction.
III. CONCLUSION
We affirm the district court’s order granting Continental Motors’ motion to
dismiss for lack of personal jurisdiction.
38