McKUSICK, Chief Justice.
The issue presented by this appeal is whether a nonresident automobile dealer can be subjected to the jurisdiction of the Maine courts for the sale of a defectively manufactured or serviced vehicle that causes
On September 5, 1972, the father of plaintiffs Marcia and Tania Tyson purchased a 1972 Chevrolet truck from defendant, Whitaker & Son, Inc., an automobile dealer in Sidney, New York.
Defendant Whitaker & Son, Inc., after being served in New York State, moved to dismiss on the ground, inter alia, of lack of personal jurisdiction. Defendant supported its motion by its president's affidavit that it owned no property in Maine, had never solicited or transacted business in Maine, and had never shipped goods into Maine pursuant to a contract of sale. On February 1, 1979, the Superior Court dismissed the action against Whitaker & Son, Inc., holding that there were insufficient "minimum contacts" between Maine and defendant to support this state's assertion of jurisdiction over the New York dealership.
Our analysis begins with Maine's "long arm" statute, 14 M.R.S.A. § 704-A (Supp. 1978). We center our attention on subsection 2(I), by which Maine asserts adjudicatory jurisdiction in the broadest constitutional terms.
The preamble affirms the legislature's intention that section 704-A be liberally construed "to the fullest extent permitted by the due process clause."
With the broad thrust of the preamble in mind, we next turn to the statutory provision that we here elect to apply, subsection 2(I). The question facing us is whether, in the terms of that subsection, defendant did "[m]aintain any ... relation" to Maine "which affords a basis for the exercise of jurisdiction by the courts of this State consistent with the Constitution of the United States." In light of the preamble's mandate that courts of Maine should assert jurisdiction "to the fullest extent permitted" by due process, we interpret the term "relation" in subsection 2(I) to be consonant with the traditional due process requirement of "minimum contacts." In other words, to determine whether our "long arm" statute provides for assertion of jurisdiction over defendant, we must decide whether such an assertion of jurisdiction would pass constitutional muster. The question of statutory construction whether the Maine legislature has provided for Maine courts to have jurisdiction over this defendant in this case becomes identical to the question whether Maine courts may constitutionally assert such jurisdiction.
Subsection 2(I)'s requirement of a "relation" between defendant and Maine grows out of the seminal decision of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). There the
Id. at 316, 66 S.Ct. at 158, quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940). The Supreme Court went on in International Shoe to require that the defendant have some "contacts, ties or relations," id., 326 U.S. at 319, 66 S.Ct. 154 (emphasis added), with the forum. As the Court recently rephrased it, "[A]n essential criterion in all cases is whether the `quality and nature' of the defendant's activity is such that it is `reasonable' and `fair' to require him to conduct his defense in that State." Kulko v. California Superior Court, 436 U.S. 84, 92, 98 S.Ct. 1690, 1697, 56 L.Ed.2d 132 (1978). The Court in Kulko cautioned that the standards of "fairness" and "reasonableness" are "not susceptible of mechanical application ... [and that] the facts of each case must be weighed," with the recognition that "few answers will be written `in black and white'." Id.
Our analysis of the facts of this case will proceed in three steps. See Woods, "Pennoyer's Demise: Personal Jurisdiction after Shaffer and Kulko and a Modest Prediction Regarding World-Wide Volkswagen Corp. v. Woodson," 20 Ariz.L.Rev. 861, 881-82 (1978) [hereinafter cited as Woods]. We will first determine whether Maine has a legitimate governmental interest in the subject matter of this action; if Maine does, then it has the basic power to adjudicate this dispute. As the second step in our analysis we will determine whether defendant's business is such that defendant should reasonably anticipate, or not be unfairly surprised by, litigation arising in Maine from that business. Only if we have found both a legitimate governmental interest and such reasonable anticipation do we reach the third step: determination whether the exercise of jurisdiction over defendant would comport with "traditional notions of fair play and substantial justice." In the case at bar, we are convinced that the first and second steps are satisfied. However, the third and ultimate determination, that of "fair play and substantial justice," requires further factfinding, and for that we must remand to the Superior Court.
Returning to the first stage of analysis, we find that Maine has "a minimal legitimate governmental interest in the litigation and the consequent power to decide if it is fair to assert it." Woods, supra at 883. The "relationship" between defendant and this state arises, in the first place, from the vehicular accident that occurred here. The likely presence of witnesses in regard to the accident and subsequent hospitalization, and other evidence in Maine, along with the potential medical creditors here, provides the required connection between "the defendant, the forum, and the litigation." Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2580, 53 L.Ed.2d 683 (1977). Maine not only has an obvious interest in providing a forum for persons injured within its borders, but it also has an interest in the safety of all motor vehicles operated on its highways, including those, such as the Tysons', that are only transiently present in the state. Thus, in the terminology used by Professor Woods, Maine has "preliminary jurisdiction," Woods, supra at 908-09, justifying our proceeding to the next inquiry of whether defendant could reasonably anticipate the possibility of its being sued in Maine on account of a defect in the truck sold by it in New York.
The second stage determination is far more complicated — whether defendant purposefully engaged in activity which should have put it on notice of the possibility it would be haled into a Maine court. The primary source of complication and, for some courts, confusion, has been the Supreme Court's decision of Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). The Court in Hanson, in the course of deciding that Florida did not have jurisdiction over a trust created in Delaware,
We cannot read the "purposeful activity" standard literally, for to do so would resurrect the discredited notion that jurisdiction over nonresidents rests upon their implied consent. See International Shoe Co. v. Washington, supra, 326 U.S. at 318-19, 66 S.Ct. 154; Phillips v. Anchor Hocking Glass Corp., supra, 100 Ariz. at 256, 413 P.2d at 735. Moreover, although the Supreme Court has continued to recite the Hanson "purposeful activity" language in its recent decisions on jurisdiction,
The rationale underlying the "purposefully availing" requirement of Hanson thus appears to be that the defendant have at least fair notice or a reasonable expectation that he may be subject to suit in the foreign forum. In the case at bar, defendant would hardly have been surprised that a vehicle it sold in New York was later driven in Maine. The Chevrolet truck in question was designed and manufactured, and bought and sold, for the specific purpose of being operated on the nation's highways without regard to state boundaries. By its nature the automobile is intended to go everywhere, crossing state lines at will. Interstate travel in the Tyson vehicle was not only foreseeable; it was expectable and indeed probable. See Reilly v. Phil Tolkan Pontiac, Inc., 372 F.Supp. 1205, 1207 (D.C.N.J.1974); World-Wide Volkswagen Corp. v. Woodson, 585 P.2d 351, 354 (Okl.1978), cert. granted, 440 U.S. 907, 99 S.Ct. 1212, 59 L.Ed.2d 453
Defendant's knowledge of the inherent mobility of the products it sold, together with its knowledge of the substantial amount of interstate travel made by its customers, establishes our second stage requirement of reasonable anticipation of the possibility of litigation in Maine. However, as to the ultimate determination of whether exercise by a Maine court of adjudicatory power over defendant would comport with "traditional notions of fair play and substantial justice" in this case, remand to the Superior Court is necessary for the development of further evidence. Our emphasis rests on the recognition that the determination of fairness must depend on the facts of each particular case. See Kulko v. California, supra, 436 U.S. at 92, 98 S.Ct. 1690. "Each case involving this jurisdictional issue must stand or fall upon its own particular facts." Labbe v. Nissen Corp., supra at 571.
Professor Woods has summarized some of the factors which courts in the past have commonly considered when evaluating fairness:
Woods, supra at 891 (citations omitted). Applying the Woods factors to the circumstances of this case, as far as they have been developed or would appear to be true, defendant is somewhat passive in that Mr. Tyson came to defendant, purchased the truck, and later drove it to Maine. But defendant is the seller of products that are highly mobile by their own power, and it is defendant's business to seek out buyers who are then free to operate those self-powered vehicles anywhere in the United States and even beyond, without regard to jurisdictional boundaries.
The relative economic burden appears to favor plaintiffs, as it would be costly for plaintiffs to transport their witnesses and evidence from Maine to New York. While defendant would also suffer costs in coming to Maine to defend itself, it is better able than plaintiffs to absorb the cost of litigation into its costs of doing business, that is, to "internalize" its costs, as the phrase is. It is thus more fair, on this criterion, to hold the litigation in Maine. See Phillips v. Anchor Hocking Glass Corp., supra, 100 Ariz. at 260, 413 P.2d at 738; Duignan v. A. H. Robins Co., 98 Idaho 134, 138, 559 P.2d 750, 754 (1977).
Earlier we discussed the important governmental interests regarding the care and treatment of individuals who are injured in accidents within our borders and the safety of motor vehicles operated on our highways. An additional factor in favor of Maine's taking jurisdiction in this case is litigational efficiency. The defendant in the companion suit, General Motors, has not contested Maine's jurisdiction, and plaintiffs' action
Turning to further factors bearing on the fairness of subjecting a New York automobile retailer to the jurisdiction of Maine courts, we also note the benefits derived by that retailer from the maintenance by the State of Maine of its public highway system. Defendant's market for the sale of automobiles is undoubtedly enlarged by reason of the availability to its purchasers of the nationwide highway system, including that of Maine. Defendant is not restricted to selling automobiles for use only on the highways of the State of New York.
Furthermore, defendant's market for the sale of Chevrolet automobiles is undoubtedly enlarged by the nationwide activities of General Motors. It is our understanding — subject to correction or confirmation on remand — that dealers in General Motors vehicles are franchisees who participate in a nationwide system for the distribution and servicing of new cars and trucks, sharing with the manufacturer and other dealers both the benefits and the burdens of a coordinated advertising, warranty, and servicing program.
We therefore cannot agree with the courts in Granite States Volkswagen, Inc. v. District Court, 177 Colo. 42, 492 P.2d 624, 625-26 (1972); Pellegrini v. Sachs and Sons, 522 P.2d 704, 707 (Utah 1974); and Oliver v. American Motors Corp., 70 Wn.2d 875, 425 P.2d 647, 655-56 (1967), that a nonresident manufacturer may constitutionally be subjected to personal jurisdiction, but a nonresident dealer may be sued only in his own state. We do not accept the wooden application of a manufacturer-retailer distinction to the sellers of automobiles.
In Pellegrini, the heart of the decision denying jurisdiction over the out-of-state dealer is the following reasoning:
522 P.2d at 707. This analysis is flawed in several respects. First, it ignores the ever-growing mobility of Americans, who not only travel all over the country on vacation and business trips, but who also, on retiring or changing jobs, move their homes to other states with increasing frequency. Today, most of the motor vehicles a dealer sells may not remain exclusively within the state where the dealer is located. Second, the Utah court ignores the fact that the California dealer is almost always a part of a larger, nationwide network of dealers who will repair the vehicles sold by the California dealer. Both the California dealer and his customer know that the vehicle does not have to remain within California to receive the same kind of service which the California dealer promises to provide.
The Washington court in Oliver fell prey to the same logic employed in Pellegrini. The majority in Oliver decided that while a manufacturer knows his products will go across state boundaries, the retailer knows "that in the normal course of business the object sold will stay and be used reasonably near the place of sale." 425 P.2d at 656 (emphasis added). But today, it is normal for an automobile to cross state lines, and the dealer knows it. We agree with Justice Rosellini's dissent in Oliver:
Id. at 657 (Rosellini, J., dissenting). Indeed, the two recent cases that have dealt with this question have upheld the exercise of jurisdiction over a nonresident automobile retailer. Reilly v. Phil Tolkan Pontiac, Inc., supra; World-Wide Volkswagen Corp. v. Woodson, supra.
If the facts in this case are as we assume them to be, our conclusion that the assertion of Maine's jurisdiction will comport with "fair play and substantial justice" rests upon the combination of the following three unique characteristics of defendant's relationship to Maine and this litigation: (1) the inherent mobility of automobiles and trucks, (2) the high mobility of Americans purchasing and using these products, and (3) the participation by dealers, including defendant, in a coordinated, national program of advertising, sales, service, and distribution. Our decision is thus limited to franchised retail dealers of major auto manufacturers,
We cannot, based on the evidence before us, conclusively resolve the constitutional question of Maine's jurisdiction over defendant. Because this case is one of first impression in Maine, we agree with the court in Phillips v. Anchor Hocking Glass Corp., supra, 100 Ariz. at 261, 413 P.2d at 739, that "justice will be best served by allowing the parties the opportunity of presenting any additional evidence relevant to the issue of fairness." The parties will be free to present any evidence bearing upon the third determination of "fair play and substantial justice." Without intending to make a comprehensive catalogue of the subject matter of evidence appropriate on remand, we do suggest that the Superior Court should be informed at the very least on the nature of defendant's business, the extent and nature of its participation in General Motors' distribution, warranty and service program, and the facts bearing on relative litigational convenience.
Mindful that the jurisdictional factor of "fair play and substantial justice" can only be weighed on the facts of each case
Judgment of dismissal vacated.
Remanded to the Superior Court for further proceedings consistent with the opinion herein.
Costs on appeal allowed to appellants.
ARCHIBALD, J., did not sit.
Id. at 82. See generally I. Foigel and H. Gammeltoft-Hansen, The Law of Automobile Dealers Contracts 21-45 (1970); Kessler, "Automobile Dealer Franchises: Vertical Integration by Contract," 66 Yale L.J. 1135, 1136 (1957). Cf. Crose v. Volkswagenwerk Aktiengesellschaft, 88 Wn.2d 50, 558 P.2d 764, 767 (1977) (discussing the "economic realities" of the automobile industry).