HARRISBURG – A recent state Supreme Court ruling that allowed an out-of-state resident to file a lawsuit in Philadelphia alleging violations of Pennsylvania law is part of a trend, a Philadelphia-area lawyer says.
Schnader Harrison Segal & Lewis LLP partner Edward J. Sholinsky said a Feb. 21 ruling by the Supreme Court of Pennsylvania should concern businesses that could face Unfair Trade Practices and Consumer Protection Law allegations.
“For Pennsylvania businesses, this means that they can be exposed to suits under the UTPCPL for actions that take place wholly outside of Pennsylvania that are brought by consumers who live outside the commonwealth,” Sholinsky said.
The U.S. Court of Appeals for the Third Circuit court had requested a clarification from the Supreme Court as part of Jobe Danganan’s lawsuit filed against Guardian Protection Services. The Third Circuit said there was not much guidance from Pennsylvania courts on the issue.
In the Danganan case, 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, 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.
Based on his understanding of the contract language, Danganan filed his class action lawsuit in the Court of Common Pleas of Philadelphia County, and the defendant removed the case to federal court in Philadelphia.
The case was dismissed by the district court on July 25, 2016. Danganan appealed that ruling to the Third 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.”
Despite being part of a trend in Pennsylvania, Sholinsky told the Pennsylvania Record that “Danganan was a break from federal court decisions, which had given the law a more limited reading.”
Sholinsky said other businesses in the commonwealth should take note of the ruling.
“In light of Danganan, businesses headquartered in Pennsylvania may want to think about how they use choice of law and choice of forum clauses in consumer dealings outside of Pennsylvania,” he said.