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OOSTDYK v. BRITISH AIRTOURS LTD.

December 10, 1976.

ELEANOR OOSTDYK
v.
BRITISH AIRTOURS LIMITED and BRITISH AIRWAYS BOARD



The opinion of the court was delivered by: WYATT

WYATT, District Judge: This is a motion by defendant British Airtours, Ltd. ("Airtours") to dismiss the amended complaint as against it for lack of jurisdiction over the person. Fed. R. Civ. P. 12(b)(2) Affidavits with exhibits were submitted by both sides. There does not appear to be any dispute about the relevant facts.

The second defendant, British Airways Board ("Airways"), which owns all the stock of Airtours, does not contest jurisdiction over its person.

The action was commenced on August 15, 1975. (It is erroneously stated in an affidavit for plaintiff that the action was commenced "on December 17, 1974".) An amended complaint was filed on December 29, 1975 with the consent of defendants. The amended complaint asserts three claims for damages resulting from injuries suffered by plaintiff while she was a passenger on a flight from Rome to London. The airplane was owned and operated by Airtours. Federal jurisdiction is based upon diversity of citizenship, it being averred that plaintiff is a citizen of New Jersey and that the two defendants are United Kingdom corporations. 28 U.S.C. § 1332(a)(2)

 1.

 Plaintiff, a resident of New Jersey, made arrangements for a trip to London and Rome with a group on charter flights. The details of her contacts and contracts are not given, but none of them was with Airtours or Airways. According to an affidavit for her, she was offered a "package" and made her arrangements with "local tour operators". Airtours and Airways had nothing to do with her arrangements.

 Plaintiff and the others in the group flew from New York (Kennedy) to London on a charter flight of Trans International Airlines.

 From London to Rome and return, the group, with plaintiff, flew on a charter flight of Airtours. The contract for this flight was made in writing in England between Airtours and an English tour operator, namely, Olympic Holidays, Ltd. Olympic evidently acted on behalf of the "local tour operators" in the United States who were putting together the "package" trip. Neither Airtours nor Airways had any contacts in New York or elsewhere with plaintiff.

 It was on the flight in an Airtours plane from Rome to London on August 22, 1974, that plaintiff was injured. She avers that her injuries were caused by the negligence of Airtours in flying through air turbulence.

 According to her averments, plaintiff was seriously injured and is now paralyzed in both legs and both arms.

 She was treated in hospitals in London from August 22, 1974 to March 3, 1975, when she returned to this country.

 On the face of her claim, plaintiff arouses a natural sympathy. If she cannot assert her claim against Airtours in this Court or a New York court, she must sue either in California (where Airtours might be suable) or in England. Either of these jurisdictions is obviously an inconvenient forum for her. Under established principles, however, I am forced to conclude that Airtours is not subject to the jurisdiction of the New York courts or of this Court, and that the motion must be granted.

 2.

 In this diversity action, whether Airtours is subject to suit here is determined by the law of New York. Gelfand v. Tanner Motor Tours, Ltd., 385 F.2d 116, 119 (2d Cir. 1967), cert. denied, 390 U.S. 996, 88 S. Ct. 1198, 20 L. Ed. 2d 95 (1968)

 3.

 Service of process was made upon Airways at its New York offices without challenge.

 Airtours has no offices in New York, so service was attempted by delivery of a copy of the summons and complaint to New York counsel for Airtours, to Airways "as agent" for Airtours, and to the Secretary of State of New York under Section 307 of the Business Corporation Law of New York.

 Airtours argues that none of these attempts at service are effective because it is not subject to the jurisdiction of the courts of New York or of this Court in a diversity action. While both sides agree that jurisdiction over Airtours cannot be had under the provisions of CPLR § 302 (the New York "long arm" statute), the plaintiff argues that Airtours is doing business in New York and has thus subjected itself to suit here under traditional principles of New York jurisdictional law as preserved in CPLR § 301.

 Airtours denies that it has ever done business in New York, and this frames the issue to be decided on this motion to dismiss for lack of personal jurisdiction. Plaintiff argues that there are three grounds for a finding that Airtours is doing business in New York and amenable to suit here. They are: (1) that Airtours acting on its own behalf conducts permanent and continuous business activity in New York; (2) that its parent Airways performs substantial activities in New York as agent for Airtours; and (3) that Airtours and Airways are so closely related as to be in fact one business entity and that the activities in New York of Airways should be imputed to Airtours.

 4.

 Airways is an internationally scheduled air carrier organized and existing under the laws of the United Kingdom and apparently is owned by the British Government. Airways was formed as a result of a merger in the early 1970's between British Overseas Airways Corporation (BOAC) and British European Airways (BEA). Airways has three operating divisions - Overseas Division (which operates in the area formerly serviced by BOAC); European Division (which operates in territory formerly serviced by BEA); and Regional Division (which functions in the area formerly serviced by a number of small British air carriers). Airways maintains offices in New York and concededly does a substantial amount of business here on its own account.

 Airtours is a wholly owned subsidiary of Airways, and is also a corporation organized under the laws of the United Kingdom. Airtours has its principal office at Gatwick Airport in Surrey, England. Airtours was formerly known as BEA Airtours, Ltd., but its name was changed at the time of the BEA-BOAC merger. For purposes of the present discussion "Airtours" will refer both to BEA Airtours and to British Airtours.

 Airtours is engaged solely in the business of chartering aircraft to third parties, usually tour operators who arrange "package holidays" for tour groups. Airtours does not itself organize tours or provide to tour operators or tour groups any services (such as hotel accommodations and the like) other than air transportation.

 All of the outstanding stock of Airtours is owned by Airways; two shares, for reasons of British law, are held by nominees of Airways.

 Airtours has a seven member Board of Directors. Airways has a fourteen member Board of Directors. One of the directors of Airtours also serves as a director of Airways. Another is an employee of Airways. There is no evidence that Airways controls or directs the policy and operations of Airtours; on the contrary, there is evidence that the Airtours Board performs this function independently of Airways.

 Airways participates in the profits of Airtours through dividends declared by the Board of Airtours. For the year 1975, such dividend amounted to ...


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