March 22, 2021

By: Eric G. Soller , PA Superior Court Gives Plaintiffs Upper Hand When Choosing Venue

Takeaway:

Big Corporations can be sued anywhere they conduct business, no matter how insignificant the local sales are compared to the national sales.

Although plaintiffs have the advantage in choosing the forum, defendants have the assurance that they cannot be sued in forums where they do not conduct significant business. On March 8, 2021, that assurance became smaller – by about 95.995%.  In an en banc opinion, the Pennsylvania Superior Court determined that venue was proper in Philadelphia County even though Defendant’s, Husqvarna Professional Products (HPP), local sales only accounted for .005% of its $1.4 billion national sales.

The Pennsylvania Rules of Civil Procedure provide that venue is proper against a corporation or similar entity in a county where it “regularly conducts business.” In determining whether venue is proper under this Rule, courts “employ a quality-quantity analysis.” In ruling that venue was not proper in Philadelphia County, the trial court determined that Defendant satisfied the quality prong, but not the quantity prong; the trial court granted Defendant’s motion to transfer the case to Buck’s County. On appeal, the Pennsylvania Superior Court held that it was an abuse of discretion for the trial court to rely almost exclusively on the percentage of defendant’s business in a county when addressing whether venue was proper.

Specifically, the Court noted “[t]he percentage of a company’s overall business that it conducts in a given county, standing alone, is not meaningful and is not determinative of the ‘quantity’ prong. Each case turns on its own facts, and we must evaluate evidence of the extent of a defendant’s business against the nature of the business at issue.” The Court determined that because “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 [,] Courts thus should not consider percentages in isolation.”

Ultimately, the Court concluded that having an authorized dealer in Philadelphia and selling $75,310 worth of products through that dealer in 2016 in Philadelphia were “sufficiently continuous so as to be considered habitual.” Therefore, venue in Philadelphia was proper despite its insignificant sales.  To read the opinion click here.