Rao v. Era Alaska Airlines

Brief Fact Summary.

Maryland Plaintiffs sued Defendants for torts arising out of the loss of personal property on or shortly after a flight operated by Defendant airline. Defendants moved to dismiss for lack of personal jurisdiction on the grounds that Plaintiffs’ claims arise out of a flight within Alaska operated by an airline that transacts business only within Alaska. Plaintiffs argued that jurisdiction in Maryland was proper because Plaintiffs purchased the tickets for their intra-Alaska flight over the internet, which was sufficient to give Maryland personal jurisdiction over Defendants.

Synopsis of Rule of Law.

A state may exercise personal jurisdiction over a party who purposefully directs Internet activity into the forum state with the manifest intent of engaging in business in the forum state.

Facts.

Plaintiffs purchased airline tickets via Expedia.com, an Internet travel website, for a flight from Kodiak, Alaska to Anchorage, Alaska on  Defendant ERA. The plaintiffs traveled from Maryland to Alaska for the intrastate Alaska flight. After deplaning in Anchorage, Plaintiffs noticed that a case containing valuable jewelry and cash was missing. Plaintiffs filed suit in federal district court in Maryland against Defendants, alleging negligence and other claims. Defendants moved to dismiss the complaint for lack of personal jurisdiction. The district court denied Defendants’ motion, but allowed the parties to undertake limited discovery to determine whether Defendants had sufficient contacts with Maryland to warrant the exercise of personal jurisdiction. Plaintiff moved to amend their complaint to include facts supporting their argument that the district court possessed personal jurisdiction over the defendants. Defendants opposed the motion to amend and renewed their motion to dismiss, claiming that personal jurisdiction could not attach because ERA had not purposefully engaged in business in Maryland. Rather, ERA argued that it simply allowed the travel website to advertise ERA’s flight information on the system for anyone to access and make a purchase.

Issue.

May a state exercise personal jurisdiction over a party who purposefully directs Internet activity into the forum state with the manifest intent of engaging in business in the forum state?

Held.

Yes. The court held that there was no question that the only services provided by Era were in Alaska, not in Maryland, and that long-arm jurisdiction simply did not arise regardless of where Plaintiffs actually purchased their tickets.

Discussion.

A state may exercise personal jurisdiction over a party who purposefully directs Internet activity into the forum state with the manifest intent of engaging in business in the forum state. To determine whether specific jurisdiction comports with due process, courts consider: (1) the extent to which the defendants purposefully availed themselves to conducting activities in the forum state; (2) whether the plaintiffs’ claims arise out of activities in the forum state; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable. The courts within the Fourth Circuit’s jurisdiction consistently held that the exercise of personal jurisdiction over out-of-state defendants must be based on more than their presence on the Internet. If a defendant entered into contracts on the Internet targeting individuals in Maryland, personal jurisdiction would be proper.

Here, Plaintiffs claimed that because ERA’s airline tickets were available and could be purchased on an Internet travel website, ERA had sufficient contacts in Maryland to be subjected to personal jurisdiction in Maryland. However, Plaintiffs’ cause of action did not arise out of the ticket sale itself, but out of events that took place in Alaska. Additionally, the evidence indicated that ERA and the other defendants did not manifest an intent to engage in business within Maryland. Rather, ERA advertised its flights on the Internet in a manner that may be accessed by any potential passenger who was first willing to travel to Alaska to board the intrastate flight. Thus, Plaintiffs sought out ERA’s services using the Internet to reach into Alaska from Maryland, not the other way around. Accordingly, the court lacked personal jurisdiction over Defendants, and the matter was transferred to the United States District Court for the District of Alaska.