HARRISBURG – In a significant ruling from the Supreme Court of Pennsylvania, the Court reasoned that a company may in fact be sued in a particular forum, regardless of the percentage of its business conducted there.
On Nov. 22, state Supreme Court Justices Kevin M. Dougherty, Debra Todd, Christine Donohue, David N. Wecht and Sallie Updyke Mundy issued that very opinion while Justice P. Kevin Brobson dissented from the majority’s view, in the matter of Hangey v. Husqvarna Products, Inc.
Ronald Hangey and Rosemary Hangey of Green Lane first filed suit on Jan. 24, 2017 in the Philadelphia County Court of Common Pleas versus Husqvarna Professional Products, Inc. of Charlotte, N.C. and Trumbauer’s Lawn and Recreation, Inc. of Quakertown.
“On or about May 16, 2013, plaintiff Ronald Hangey purchased a riding lawnmower manufactured by defendant, Husqvarna, Model No. RZ4824F, VIN No. 100512C001003 which he purchased new from defendant, Trumbauer’s. On or about Aug. 5, 2016, plaintiff Ronald Hangey was operating the lawnmower at his property located at 370 Crosstown Highway, Lakewood, 18439 when he was unexpectedly thrown forward off the mower and came to rest at the bottom of a drainage area and/or hollow,” the suit stated.
“After Mr. Hangey was thrown forward off the mower, it continued down into the drainage area and/or hollow where it proceeded to roll over Mr. Hangey’s legs, with the blades still moving at high speed resulting in severe and catastrophic injuries to both of Mr. Hangey’s legs. After miraculously crawling out of the hollow and to a neighbor’s home, Mr. Hangey was airlifted to Geisinger Medical Center and subsequently transported to Lehigh Valley Hospital in critical condition,” the suit added.
In the accident, Ronald suffered “severe lacerations to both lower extremities, traumatic injuries to both lower extremities, massive blood loss, degloving injuries to the lower extremities,’ plus a number of surgeries including tissue transplants and skin grafts, infections requiring a number of hospitalizations and many other injuries.
The plaintiffs believed the defendants had a responsibility to manufacture and sell lawnmowers safe for use, and placed “profits and production” over the safety of the injured plaintiff.
Due to the location of the accident and where the equipment was purchased, defense counsel had argued in separately-filed motions for preliminary objections that the case did not belong in Philadelphia County – but instead, rather, the Warren-Forrest Court of Common Pleas within the 37th Judicial District, or alternatively, the Bucks County Court of Common Pleas.
But per the trial court, only $75,310 out of Husqvarna’s $1.393 billion in national revenue during the year 2016 was the result of direct sales made in Philadelphia County, or about 0.005% – while in comparison, 0.2% of that same total figure came from direct sales of its products in Bucks County.
The trial court also calculated that if Husqvarna’s business were evenly distributed among the 3,141 counties in the United States, Husqvarna would do 0.031% of its business in Philadelphia County and its actual business over the years of 2014 to 2016 was only one-sixth of that amount, or 0.005%.
Subsequently, the trial court held Husqvarna’s activities in Philadelphia County failed the quantity prong of its venue analysis, and it transferred the case to Bucks County.
On appeal to the Superior Court of Pennsylvania, that intermediate body reversed the trial court ruling in March 2021, finding the latter erred in transferring the case to a Bucks County courtroom.
“Pennsylvania appellate courts have often considered the percentage of overall business a defendant company conducts in a county to determine if the quantity prong was met. However, no court has stated that the percentage of a defendant’s business is the sole evidence relevant to the ‘quantity’ analysis,” according to the Superior Court’s ruling.
“Instead, courts must determine whether all the evidence presented, including the scope of the defendant’s business, viewed in the context of the facts of the case, establish that a defendant’s contacts with the venue satisfy the quantity prong.”
The Superior Court found that “HPP is a multi-billion-dollar corporation with at least one authorized dealer in Philadelphia to which it delivered its products for sale, that even though HPP’s sales in Philadelphia accounted for only 0.005% of its national sales, the dollar amount of those sales was $75,310 in 2016 – and that “since these facts were relevant to whether HPP’s contacts satisfied the ‘quantity’ prong of the Rule 2179(a)(2) [venue] analysis, the Superior Court held ‘the trial court erred in relying almost exclusively on evidence of the percentage of defendant’s business that occurred in Philadelphia when addressing the quantity prong.”
In then being brought to the state Supreme Court, that body largely concurred with their appellate colleagues.
Dougherty authored the Court’s opinion, where he explained a company’s activities can be labeled as regular business in a given forum if they were to maintain a constant physical presence and act to further their own interests in that same forum – and that to examine merely the percentage total of their business in that forum would be “absurd.”
“The percentage of a company’s total revenue derived from the forum county cannot establish that the company does not regularly conduct business within that county. First, as the Superior Court explained, ‘A small or local business may do all of its work in just a few counties or even a single one, while a large business may span the entire nation. Indeed, the percentage of sales a multi-billion-dollar company makes in a particular county will almost always be a tiny percentage of its total sales. If courts were to look at the percentage of sales only, a small business and a large business could theoretically conduct the exact same amount of business in the same county, and the small business could be subject to venue in the county while the large business is not,” Dougherty said.
“It would be absurd for the courts to find one company is regularly conducting business while another company is not regularly conducting business, even if the two companies were conducting the exact same amount of business. To hold otherwise would also undermine the recognized purposes of Rule 2179(a), which was not only meant to promote convenience for the litigants, but was also meant to account for the relationship the forum’s community holds with the lawsuit. Viewed from the perspective of those in the forum county, two companies conducting the same amount of business can have the same impact on the community, regardless of whether one of the companies conducts substantially more business elsewhere.”
In his dissent, Brobson agreed with his colleagues in the majority on upholding the Superior Court’s ruling – but diverted on the state Supreme Court ruling the case should absolutely be heard in Philadelphia, and explained he personally would have recommended the case be remanded to the trial court with instructions to reconsider its analysis on the topic of venue.
Supreme Court of Pennsylvania case 14 EAP 2022
Superior Court of Pennsylvania case 3298 EDA 2017
Philadelphia County Court of Common Pleas case 170103377
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com