LOOSE APPLICATION OF VENUE LAWS LEADS TO FORUM SHOPPING
Judges in the Philadelphia Court of Common Pleas have made a habit of swinging open the courtroom doors to out-of-state plaintiffs. This policy benefits plaintiffs but negatively impacts Pennsylvanians. It clogs courts, drains court resources, and drives businesses out of the state leading to job loss.
At the crux of the venue issues is the state’s venue rule, which judges have interpreted very liberally. It permits venue in any “county where it [a corporate defendant] regularly conducts business,” which allows cases to be filed in Philadelphia even when there is little to no connection between Philadelphia and the incident in question.
In addition, Pennsylvania courts have been slow to apply the U.S. Supreme Court’s 2017 ruling instructing state courts to dismiss cases that have no connection to the state. In Bristol-Myers Squibb Co. v. Superior Court of California (BMS), the Court held that a state cannot exercise personal jurisdiction over a company that is not incorporated or headquartered in that state, when the plaintiffs do not live in the state, and events related to the alleged injury did not occur there.
In October, the Supreme Court of Pennsylvania openly defied the U.S. Supreme Court in Hammons v. Ethicon, which was the state high court’s first opportunity to apply the case to claims brought by out-of-state
plaintiffs in Pennsylvania courts. In this instance, an Indiana resident claimed that Ethicon, a New Jersey company, made a defective pelvic mesh device. The plaintiff did not receive medical treatment in Pennsylvania, and all conduct relevant to her claim took place in Indiana or New Jersey.
The only connection between the parties and Pennsylvania was that Ethicon contracted with a Pennsylvania company, Secant, to provide the mesh and the plaintiffs’ lawyer decided that Philadelphia would be a more favorable place to sue. Doing business with third parties, however, does not automatically subject an out-of-state business to personal jurisdiction where that company is located unless there is a specific connection between the forum and the injury. The U.S. Supreme Court in BMS held that the “bare” decision to contract with a California company to distribute the drug nationally did not provide a sufficient basis for juris- diction in California. As in BMS, Ethicon’s link to a Pennsylvania company should not have provided a sufficient basis for a Pennsylvania court to decide the case. Nevertheless, the lower courts allowed the Indiana resident’s claim against a New Jersey company to proceed in Pennsylvania courts, which led to a $12.8 million judgment in Philadelphia’s mass tort program.
ATRA filed a brief urging the Supreme Court of Pennsylvania to realign state law with U.S. Supreme Court precedent and end litigation tourism. The Court, however, went in the opposite direction. It ruled that Ethicon’s connection to Secant allowed Pennsylvania courts to assert jurisdiction over Ethicon. Contrary to BMS, the Supreme Court of Pennsylvania viewed it sufficient for a plaintiff to show a tie between the state and the “underlying controversy,” rather than the individual’s claim, for a state court to decide the case.
This ruling clearly undercuts the majority ruling in BMS which sought to restrict out-of-state plaintiffs from suing in plaintiff-friendly jurisdictions. Oddly, the Supreme Court of Pennsylvania appeared to follow Justice Sotomayor’s “forceful dissent” in BMS instead of the majority opinion. In fact, the Supreme Court of Pennsylvania invited review of its decision, stating that “absent further clarification from the High Court, we decline to restrict jurisdiction by focusing narrowly on the elements of plaintiff’s specific legal claims.” Only the state’s chief justice refused to “join an opinion of a state court that does not abide by the [U.S. Supreme Court’s] latest pronouncement.”
CASES TO WATCH
A Pennsylvania Superior Court is considering whether 1 percent of national sales with no administrative locations in Philadelphia is enough to allow for venue when a man injured himself riding a Husqvarna lawn mower. The man lives in an adjacent county. After the three-judge panel of the court reversed a trial court’s decision finding the case should be heard in Bucks County, the full appellate court opted to consider the issue.