Pennsylvania Record

Monday, February 24, 2020

Pennsylvania Supreme Court allows state law to apply in out-of-state dispute

By Carrie Salls | Mar 2, 2018

General court 4

HARRISBURG – The Supreme Court of Pennsylvania ruled in a Feb. 21 opinion that an out-of-state plaintiff can sue a Pennsylvania-based company under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL).

According to the opinion written by Chief Justice Thomas G. Saylor, the commonwealth’s high court agreed at the request of the U.S. Court of Appeals for the Third Circuit to answer "whether a non-Pennsylvania resident may bring suit under the (UTPCPL), against a business headquartered in and operating from Pennsylvania, based on transactions which occurred outside of Pennsylvania?”

The Third Circuit court requested the clarification as part of Jobe Danganan’s lawsuit filed against Guardian Protection Services because it said there was not much guidance from Pennsylvania courts on the issue.

In the Danganan case, the Supreme Court said the plaintiff sued Guardian, which is based in Pennsylvania, after the company continued to send him bills related to a security contract on his Washington, D.C., home after he sold that house and moved to California.

Before he moved, the Supreme Court said Danganan attempted to terminate his agreement with Guardian, but Guardian continued to bill the appellant, citing provisions of the agreement that it claimed authorized ongoing charges through the contract’s term, regardless of cancellation attempts.

The issue the Third Circuit asked the Supreme Court to rule on dealt with parts of Danganan’s contract related to the appropriate jurisdiction for settling disputes.

“The contract signed by appellant, a standardized form agreement employed by Guardian, contained, inter alia, a choice-of-law provision, stating that the ‘agreement shall be governed by the laws of Pennsylvania,’” the Supreme Court opinion said.

However, according to the opinion, “another clause required that any suit or legal proceeding pertaining to the agreement be brought in the other party’s district or county of residence and mandated that the parties consent to jurisdiction in such venue.”

Based on his understanding of the contract language, Danganan filed his lawsuit “in the Court of Common Pleas of Philadelphia County on behalf of himself and a putative class of nationwide plaintiffs who were subject to the same form contract.” 

The opinion said the lawsuit was “predicated exclusively on Pennsylvania statutory grounds, namely, the UTPCPL and Pennsylvania’s Fair Credit Extension Uniformity Act.”

The case was removed to Pennsylvania federal court after Guardian “sought removal to federal court on the basis of diversity jurisdiction,” the Supreme Court opinion said, and the company subsequently asked the district court to throw out the case “arguing that appellant had not, pursuant to the UTPCPL, demonstrated a ‘sufficient nexus’ between the commonwealth and the improper conduct alleged in the complaint.”

The case was dismissed by the district court on July 25, 2016. The opinion said Danganan appealed that ruling to the 3rd Circuit, which sought clarification from the Supreme Court on the applicability of the UTPCPL.

In its opinion, the Supreme Court said “we find that the law’s prescription against deceptive practices employed by Pennsylvania-based businesses may encompass misconduct that has occurred in other jurisdictions.”

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Guardian Protection ServicesPennsylvania Supreme Court