HARRISBURG - Opponents of what is called "forum shopping" are urging the full panel of Pennsylvania's Superior Court to overturn a decision finding that out-of-state plaintiffs can sue any company registered in the state.
Three members of the panel, in a 2-1 decision, previously ruled that because a foreign corporation is registered in Pennsylvania, it is voluntarily consenting to jurisdiction in state courts.
The issue, which involves a lawsuit brought by firefighters from New York who sued companies not based in Pennsylvania, will now be heard by all 15 judges of the court.
The case has earned the attention of the Washington Legal Foundation, a public interest law firm that advocates for business liberties, among other causes.
"We filed the brief because we are trying to bring an end to forum shopping," said Richard Samp, WLF's chief counsel. "People who claim have a real connection with Pennsylvania should be permitted to file in Pennsylvania.
"But claims against out-of-state defendants should not be permitted simply because the plaintiffs’ lawyer is searching for a friendly judge."
Seven firefighters, most of them living in New York, sued American LaFrance (which has its headquarters in South Carolina) and Federal Signal Corporation (a Delaware corporation with a principal place of business in Illinois), for permanent hearing loss injuries, claiming they were caused by fire engine sirens. American LaFrance manufacturers trucks, Federal makes sirens.
They sued in the Philadelphia County Court of Pleas, arguing both companies do business in Pennsylvania. The action was dismissed for lack of jurisdiction as neither are registered as a domestic corporation in Pennsylvania, or has headquarters in the state.
Philadelphia has a reputation for high-dollar verdicts for plaintiffs and has annually been listed on the American Tort Reform Association's list of "Judicial Hellholes" - jurisdictions ATRA claims are unfair to businesses.
Traditionally, the vast majority of claims brought against pharmaceutical companies in the city's Complex Litigation Center come from out-of-state plaintiffs.
Superior Court judges Anne E. Lazarus, and William H. Platt, reversed the Philadelphia decision. Mary Jane Bowes dissented.
The majority found that the companies, because they were registered to do business as a foreign corporation in the state, consented to jurisdiction.
In an opinion authored by Platt, the court cited the case of Daimler AG v Bauman, one of two recent U.S. Supreme Court decisions covering jurisdiction. Both Daimler and Bristol-Myers Squibb, which prevented non-Californians from suing there, placed strict limits on a court's ability to assert jurisdiction over an out-of-state plaintiff.
Platt found that the Daimler ruling only referred to where a corporation was "at home," and did not consider whether a business consented by registering..
“We observe that whether a foreign corporation consents to general personal jurisdiction in Pennsylvania by registering to do business in the Commonwealth is a matter of first impression in this Court,” Platt said.
While the Superior Court reasoned that the companies voluntarily consented to be sued in the state because they named an agent of service, the question is whether this was in any way voluntary, Samp says.
"I would argue that it is not at all voluntary, and a company should not be forced to surrender its constitutional rights (including the Due Process right not to be forced to defend lawsuits in Pennsylvania that have no connection with the Commonwealth) in return for the 'privilege' of being permitted to conduct normal business affairs," Samp said.
"This consent-based-on-registration argument has been raised in numerous States, but I am aware of no cases outside of Pennsylvania in which the argument has been successfully."
Both Daimler and Bristol-Myers Squibb essentially found that an out-of-state plaintiff cannot sue an out-of-state company, but they did not specifically address the registration-consent issue.