Ninth Circuit Reverses Personal Jurisdiction Decision in Lufthansa Case

“Lufthansa” by Priit Tammets (CC BY 2.0 DEED)

Last year, I expressed doubt over the Northern District of California’s dismissal for lack of personal jurisdiction of a suit brought by California residents regarding their alleged mistreatment when checking in for their Lufthansa flight in Saudi Arabia. The Ninth Circuit recently reversed that decision in Doe v. Deutsche Lufthansa Aktiengesellschaft, holding that that the plaintiffs could pursue their claims against the airline in California courts.

The Ninth Circuit’s Reasoning

Because the suit is based on diversity jurisdiction, the federal court’s personal jurisdiction is coextensive with that of the state of California under Federal Rule of Civil Procedure 4(k)(1)(A). The Ninth Circuit thus applied the Fourteenth Amendment three-part specific jurisdiction test: contacts (“purposeful availment”), nexus (“arise out of or relate to”), and reasonableness. In a decision authored by Judge Sidney R. Thomas, the Ninth Circuit found the first requirement—purposeful availment—was easily satisfied. Lufthansa contracted to carry the plaintiffs Doe and Roe into California; it also “regularly operates flights in and out of California, has offices at LAX and SFO, has dozens of employees in California, and has an agent for service of process in California.”

The court also found that the plaintiffs’ claims both arose out of and related to those forum contacts. The plaintiffs alleged a breach of their contract for carriage into the state of California. That contract was also the but-for cause of the plaintiffs’ tort claims: if not for that contract, the plaintiffs would not have had to disclose their marital status in Saudi Arabia, placing Roe at grave risk of punishment for his homosexuality as a Saudi Arabian citizen. Finally, the court concluded that it would not be unreasonable to exercise jurisdiction over Lufthansa, particularly given the forum state’s interest in the dispute, the plaintiffs’ interest in having the case heard locally, and the defendant’s purposeful interjection into the California market.

A Close Call

I agree with the Ninth Circuit that personal jurisdiction is appropriate in this case—but my original post garnered more pushback than any other I have written for TLB. I also taught the district court decision to my Transnational Litigation class last spring, and my fabulous Cornell students mostly agreed with the district court. In short, this case presents a close case for personal jurisdiction, and I recognize that my instincts (albeit shared by the Ninth Circuit) may not be correct.

Judge Milan Smith dissented from the panel’s decision, honing in on the crux of the debate: whether the plaintiffs’ claims are sufficiently related to the airline’s contacts with the state of California. He stressed that the plaintiffs bought their tickets in Saudi Arabia and that the primary conduct occurred in Saudi Arabia. From his perspective, the fact that they caught a connecting flight to San Francisco after the incident at the Riyadh airport was fortuitous.

Judge Smith also thought the exercise of jurisdiction was unreasonable largely out of concern for Saudi Arabia’s sovereignty. “Plaintiffs’ claims require investigation of Saudi Arabia’s purported practice of covert monitoring and marital status tracking, which would create a conflict with Saudi Arabia’s sovereignty,” he reasoned.  “Additionally, … applying California privacy tort law will require the court, at least to some degree, to determine what is considered offensive or outrageous conduct in Saudi Arabia.”

I continue to harbor deep misgivings about factoring deference to Saudi Arabia’s anti-gay laws into the personal jurisdiction analysis. I strongly feel that the exercise of jurisdiction over Lufthansa (a German company) in California, where it does extensive business, would not be unreasonable. But I accept that the question of nexus is a closer call.

What makes nexus a closer call, however, is partly due to the accumulation of Ninth Circuit precedent further rule-ifying the specific jurisdiction analysis. On the first prong, the Ninth Circuit has distinguished between purposeful availment and purposeful direction, creating separate tests for each and suggesting that certain types of claims are more appropriately analyzed under one rather than the other. That distinction led the Lufthansa majority to strain to defend its holding under both prongs. Similarly, the Ninth Circuit has held that “arise out of” requires a causal connection, while “relate to” is cabined by the facts of Ford Motor Co. v. Montana Eighth Judicial District (2021). All of this leads to unnecessarily strained justifications for a finding that the minimum contacts requirement (contacts plus nexus) is satisfied.

As I have argued elsewhere, this sort of precedential scaffolding built on top of International Shoe Co. v. Washington (1945) is distracting us from the core insight of that case: the exercise of personal jurisdiction does not violate due process when there is a reasonable relationship between the defendant, the forum, and the dispute based on the defendant’s knowing and voluntary conduct.

Here’s my pitch for why personal jurisdiction in California does not violate Lufthansa’s due process rights in this case: Lufthansa serves the California market with a permanent presence at the San Francisco and Los Angeles airports, regular flights into the state, and in-state employees. The plaintiffs resided part-time in California (and since this incident, Roe has had to remain full-time in California out of fear for his safety should he return to Saudi Arabia). Although they bought their plane tickets in Saudi Arabia, they did so because of Lufthansa’s servicing of and reputation within California. (This is not, for example, a fortuitous code-sharing arrangement.) The harm the plaintiffs alleged began at check-in for their trip bound for California, and they allege that the defendants failed to mitigate that potential harm despite the plaintiffs’ in-flight efforts. In short, Lufthansa has purposefully built and serviced a market in California; the plaintiffs allege harm in their treatment by Lufthansa en route to California; and California has an interest in this dispute given the plaintiffs’ residence there and Lufthansa’s ongoing business in the state.

Conclusion

I thus stand by my original argument for why the exercise of jurisdiction in this case is not unreasonable and why there is a sufficient nexus between this dispute and California. To the extent it is a close question, that reflects more the unnecessarily complicated state of the specific jurisdiction algorithm than the risk that adjudication will be fundamentally unfair to Lufthansa. Perhaps, then, the real takeaway from this case is the need to reform the Fourteenth Amendment personal jurisdiction analysis by gently scraping away some of the precedential barnacles that have accumulated on top of International Shoe’s original standard.