Pennsylvania venue decisions affect many product case defendants. Of course, those who belong here and those who have sued claiming their products have caused harm here. And at least for now, that includes corporate defendants registered to do business in Pennsylvania. They are subject to general jurisdiction under Pennsylvania’s Exclusive Jurisdiction Act, including claims not related to the Commonwealth. That law was upheld by due process in Mallory v. Norfolk Southern Railway Co., 600 Usono 122 (2023)..
And with many major personal injury cases filed in Philadelphia, a place Mallory described as “particularly plaintiff-friendly,” the stakes in litigation are higher than ever.
This is even more evident after several recently announced verdicts in product cases, one approaching $1 billion and another exceeding $2 billion.Product defendants are therefore of great interest in two recent Pennsylvania Rule of Civil Procedure 2179 (a) (2) decisions that allow venue against most corporate defendants in any county where that defendant regularly does business – the test. similar to many state-owned companies.
Those cases are Haney v. Husqvarna Professional Products, Inc., 304 A.3d 1120 (Pa. 2023), published last November, and Watson v. Baby Trend, Inc., 2024 WL 133697 (Pa. Super. Jan. 12, 2024), published last month. One went to the defendant and the other to the plaintiff, but both involve Philadelphia cases and provide guidance on how corporate defendants can challenge venue in Pennsylvania.Hangey Plaintiff purchased one of Defendant’s mowers in Bucks County and was injured using them in Wayne County.
Defendant had two licensed dealers in Philadelphia with annual sales of approximately $75,000 – approximately 0.005% of total national sales and well below the company’s average sales for all counties. The district court applied jurisprudence that assessed the “quality” of the forum’s activities, focusing on whether they directly promoted or were necessary to the “business objectives”, and the “quantity”, focusing on whether they were “so continuous and sufficient” that it would be common or customary.”
The court ruled that “quality” was met, but because the percentage of total sales was much lower than the level found sufficient in previous cases, the court ruled that “quantity” was notThe Supreme. Court ruled otherwise, originally in a 2-1 ruling and then a general opinion.
The Supreme Court affirmed. It recognized that venue decisions are subject to “abuse of jurisdiction” scrutiny, but concluded that the trial court abused its discretion by misapplying the relevant law, particularly giving dispositive effect to the forum sales rate rather than holding that number “merely a data point that must be viewed in the context of the entire business to determine propriety.” The court emphasized. that “ordinary” activity is not the same as “principal activity.
He noted that large national companies typically have only a very small percentage of a given district’s total sales. It was also pointed out that the defendant authorized distributors in Philadelphia who sold its products regularly, albeit in modest quantities. The court found that these regular sales and continued attempts to sell were sufficient for the “amount” test.
The court concluded that “quality” was satisfied because the sale in Philadelphia “directly furthered” the company’s “corporate objectives” and was not “accidental.”The same principles were reversed in Watson, which affirmed the decision of the trial court that there was no venue in Philadelphia and therefore the case should be sent to neighboring Bucks County – and the trial court also denied the judgment of the plaintiff.
The court concluded that the defendant was not engaged in “the ordinary course of business” in Philadelphia because more than 99 percent of its sales were to large retailers who controlled where the products were actually sold to consumers, while only 0.56 percent of its total sales was direct sales to consumers.
The court found that these sales were “merely incidental to defendant’s business as a wholesaler,” and therefore ruled that the few direct sales to consumers in Philadelphia did not constitute ordinary business. It also pointed to a lack of direct ties to Philadelphia, such as sales representatives, physical locations, real estate or business registrations.
Hangey and Watson, and especially the contrast between them, provide guidelines for evaluating the scene and the argument. A percentage of the defendant’s total business in Philadelphia is still significant, but a small percentage is not a “free Philly card,” especially for a large national or international corporation. Frequency may be more important than volume; Regular sales (even if small) on the forum can support the site, but occasional or infrequent sales, even if larger, may not. And “how” may be more important than “how much”.
Target sales in the county through agents or distributors can support the site, even if the dollars are relatively small, but distribution may not be in large quantities if it is through retail chains that control the sale of products to consumers.It is also important whether the business is essential for the purposes of the company. An activity in an incidental or auxiliary activity cannot last one day, while an activity related to the main activity of the same defendant can.Finally, defendants should remember that the “regular conduct of business” test is whether venue is legally appropriate – a separate question from whether serious burdens and inconveniences justify transfer to another district under the doctrine of forum non conveniens. The latter doctrine should be considered when the case has only a tenuous connection to the site chosen by the plaintiff. In some cases, the doctrine leads to transfer, especially when the case involves events, witnesses and evidence found in remote locations elsewhere in the Commonwealth..
