Tuesday, December 12, 2023

ARTICLE: A Mixed Bag: Plaintiffs and Defendants Score Victories in Law Changes in 2023

The below article of mine providing a year-end review of the notable cases and trends in Pennsylvania civil litigation law appeared in the December 7, 2023 edition of the Pennsylvania Law Weekly:

A Mixed Bag: Plaintiffs and Defendants Score Victories in Law Changes in 2023

Pennsylvania Law Weekly
December 07, 2023

By Daniel E. Cummins

Daniel E. Cummins
Cummins Law

Here’s a look at the notable trends and decisions in Pennsylvania civil litigation law over the past year along with a review of anticipated decisions to keep an eye out for in the year ahead.

Consent to Jurisdiction by Registration to Do Business

Over the past year, the Pennsylvania Supreme Court was overturned by the U.S. Supreme Court in the case of Mallory v. Norfolk Southern Railway, ___ U.S.___ (June 27, 2023) in a 4-1-4 plurality decision involving the validity of Pennsylvania’s “consent by registration” statute.

In Mallory, the U.S. Supreme Court upheld the Pennsylvania law requiring out-of-state companies that register to do business in Pennsylvania to agree to submit to jurisdiction in Pennsylvania courts on any cause of action filed against the company, even when the alleged injury occurred outside of Pennsylvania. The lower decision by the Pennsylvania Supreme Court was vacated and remanded.

The Pennsylvania Supreme Court thereafter punted on the issue under an order issued on Aug. 29, 2023, and remanded the question presented all the way back down to the trial court for consideration. Presently, the statute providing that a corporation’s registration to do business in Pennsylvania thereby subjects that corporation to Pennsylvania state court jurisdiction over personal injury lawsuits remains valid but subject to continuing attacks.

Test for Proper Venue Revised

Just last month the Pennsylvania Supreme Court continued its penchant for changing the law in a plaintiff-friendly way by revising the test for determining proper venue by rejecting the “percentage of revenue” venue defense.

In the case of Hangey v. Husqvarna, No. 14 EAP 2022 (Pa. Nov. 22, 2023), the court determined that venue was proper in Philadelphia County even though the only 0.005% of the defendant company’s national revenue was derived from that county. As such, the Pennsylvania Supreme Court held that a defendant company’s percentage of sales is no longer sufficient, in and of itself, to determine whether or not a company has sufficient business in a particular jurisdiction for purposes of proper venue.

Accordingly, under yet another plaintiff-friendly decision by the Pennsylvania Supreme Court, a business that only derives a small portion of its revenue from a particular county in Pennsylvania may still be sued in that county. This decision is expected to keep many more civil litigation matters in Philadelphia County.

The Dying Doctrine of Forum Non Conveniens

Over the past year a number of decisions have been handed down by the trial and appellate courts of Pennsylvania that call into question the continuing vitality of the doctrine of forum non conveniens. These numerous decisions are thoroughly researched and reviewed by Judge Terrence R. Nealon in his recent opinion in the case of Brooks v. Griffy, No. 22-CV-3250 (C.P. Lacka. Co. Oct. 18, 2023 Nealon, J.).

While a plaintiff’s choice of forum for a particular lawsuit is given great weight under Pennsylvania law, a defendant does have avenues to challenge the same. One such way is by the filing of a motion to transfer venue under the doctrine of forum non conveniens under Pa.R.C.P. 1006(d)(1).

Although the term forum non conveniens is Latin for “an inconvenient forum,” in order to prevail under such a motion to transfer, a defendant cannot simply show that the venue selected by the plaintiff is inconvenient, but rather must show that the forum vexatious and oppressive from the vantage point of the defendant and the involved witnesses.

In the case of Brooks v. Griffey, a plaintiff from Chester County, Pennsylvania, who was involved in an accident with a Lancaster County tractor-trailer driver in a Montgomery County accident, filed a lawsuit against the driver and his employer, which maintained its principal place of business in Idaho and had a single facility in Lancaster County, Pennsylvania, in the Lackawanna County Common Pleas Court.

The defendant driver and his employer filed a forum non conveniens motion seeking to transfer the case to Montgomery County pursuant to Pa. R.C.P. 1006(d)(1).

In his opinion, Nealon addressed the current status of the law regarding this doctrine and noted that the law had been chipped away at by recent decisions calling into question the continued validity of the arguments made under this doctrine, especially in light of the need to show that the jurisdiction chosen by the plaintiff was oppressive and vexatious.

Notably, Nealon, who presides in what is still apparently the only county Court of Common Pleas in Pennsylvania with an innovative local rule on the use of advanced communications technology (ACT) in court proceedings, pointed to the continued use of ACT in litigation matters as lessening the burdens of the participants. The court noted that the use of ACT, such as Zoom for depositions and minor court conferences, has served to substantially lessen any hardships that may be associated with participating in any given litigation at any location.

Nealon noted that the affidavits in support of the petition filed by the defendant did not support the granting of the motion. The court found that the defendants had not established that the defendants chosen forum was oppressive or vexatious. As such, the defendant’s motion to transfer the case to Montgomery County based upon the doctrine of forum non conveniens was denied.

Social Host Liability

Over the past year, the Pennsylvania Supreme Court considered the extent to which a host of an event at which alcohol is served may be held liable for the actions of an intoxicated guest, particularly when that intoxicated guest is an employee of the host.

In the case of Klar v. Dairy Farmers of America, No. 29 WAP 2022 (Pa. Aug. 22, 2023 Wecht, J.), the Pennsylvania Supreme Court revisited precedents from over a half of a century that have imposed civil liability arising from the provision of alcohol to visibly intoxicated persons with respect to persons and taverns licensed to engage in the commercial sale of alcohol, as compared against those same precedents that have limited the liability of social hosts.

In this Klar case, the Pennsylvania Supreme Court, in a defense-friendly decision, affirmed the decisions of the lower courts that held that an organization hosting an event at which alcohol was provided, but which organization was not a liquor licensee, could not be held liable for injuries caused by a guest who had become intoxicated at the event and was later involved in a motor vehicle accident.

COVID Issues Persists

In 2023, the COVID-19 pandemic fallout continued in the form of ongoing insurance coverage litigation involving business interruption coverage policies, virus exclusions and related issues.

Over the summer, the Pennsylvania Supreme Court issued an order granting allocator to hear arguments in the case of MacMiles v. Erie Insurance Exchange, and the case of Ungarean v. CNA and Valley Forge Insurance. In these two cases, the Pennsylvania Superior Court reached opposite conclusions regarding whether insureds should be allowed business interruption insurance coverage for losses stemming from the COVID-19 pandemic.

For those handling COVID-19 business interruption coverage issues, the Pennsylvania Supreme Court’s decisions in these matters is highly anticipated and will determine whether such claims for coverage are valid, thereby possibly ending the epidemic of these types of coverage cases.

Punitive Damages

In a pro-plaintiff decision in the case of Bert Co. v. Turk, No. 13 WAP 2022 (Pa. July 19, 2023), the Pennsylvania Supreme Court considered U.S. Supreme Court precedent in addressing the constitutionality of an award of punitive damages by a civil jury in Pennsylvania.

In the Bert case, the court reviewed the appropriate ratio calculation to be used by the courts to measure the relationship between the amount of punitive damages awarded against multiple defendants. The court declined to create a bright-line rule to determine when punitive damages are to be considered to be unconstitutionally excessive.

In this case, the jury had awarded $250,000 in compensatory damages as well as a total of $2.8 million dollars in punitive damages. The defendants asserted that this award went against U.S. Supreme Court precedent holding that punitive damages generally should not exceed 10 times the amount of a compensatory damages award.

The Pennsylvania Supreme Court determined that the defendants’ approach was an incorrect calculation. The Pennsylvania Supreme Court generally endorsed the per-defendant analysis of the ratio, instead of a per-judgment analysis, as being consistent with federal constitutional principles that require consideration of each defendant’s due process rights relative to the entry of punitive damages. According to a July 24 article by Pennsylvania Law Weekly litigation reporter, Aleeza Furman, titled “‘Sky’s the Limit’: Pa. Justices’ Punitive Damages Rulings Creates Uncertainty for Defendants,” commentators on the plaintiffs side of the bar view this decision as upholding the goals of punitive damages. In contrast, members of the defense bar noted that this decision opened a new door for unrestrained punitive damages awards while, at the same time, limiting the types of challenges a defendant can assert against such an award.

Stacking Waiver Forms

In what was considered to be a case of first impression, in Franks v. State Farm Mutual Automobile Insurance, No. 42 MAP 2022 (Pa. April 19, 2023) (Op. by Mundy, J.), the Pennsylvania Supreme Court issued a defense-favorable decision in holding that that the removal of a vehicle from a multiple motor vehicle insurance policy, in which stacked coverage had been previously waived through a waiver form executed by the insured, did not require the insurance carrier to secure a renewed expressed waiver of stacked coverage under Section 1738(c).

The basic rationale of the court was that Section 1738 requires insurance companies to secure a new written waiver of UIM coverage whenever an insurance policy is purchased. Here, there was a change made to an existing policy. No new policy was purchased. As such, according to the Pennsylvania Supreme Court, there was no requirement under the law for the carrier to secure a new waiver form.
Household Exclusions

In the case of Erie Insurance Exchange v. Mione, No. 89 MAP 2021 (Pa. Feb. 15, 2023) (Op. by Wecht, J.), without admitting to the same, the Pennsylvania Supreme Court did an about face on the issue of the enforceability of household vehicle exclusions in automobile insurance policies. Whereas the Pennsylvania Supreme Court previously ruled in its decision of Gallagher v. GEICO that household exclusions are unenforceable across the board, in this more recent Mione decision from earlier this year, the court has now held that household exclusions do remain enforceable under Pennsylvania law in certain circumstances.

In its previous 2019 decision in the case of Gallagher, which was repeatedly described in the Law Weekly as resulting in a ‘seismic” change in the law, the Pennsylvania Supreme Court wrote “we hold that the household vehicle exclusion violates the MVFRL; therefore, these exclusions are unenforceable as a matter of law.” See Gallagher v. GEICO, 201 A.3d 131, 138 (2019). That unfortunate and flawed decision led to an unnecessary four years of upheaval and expensive litigation in this area of the law.

Although the Pennsylvania Supreme Court in the previous case of Gallagher v. Geico, and again in the case of Donovan v. State Farm, attempted to eradicate the household exclusion across the board, in this decision of Erie Insurance Exchange v. Mione, the Pennsylvania Supreme Court did an about face and distinguished and limited its previous decision in Gallagher v. GEICO and instead affirmed the lower court decision that the household exclusion was valid and enforceable.

In this Mione decision, Justice David Wecht noted that the court “reiterates today that the holding in Gallagher was based upon the unique facts before the court in that case, and that the decision there should be construed narrowly.”
Service of Process

There were many decisions handed down over the past year by trial and appellate court judges confirming that a case will be dismissed if a plaintiff does not make good faith efforts to complete service of original process on the actual defendant in the matter in accordance with the case of Lamp v. Heyman and its progeny. To access a number of these decisions as summarized on the Tort Talk Blog (www.TortTalk.com), use this link: https://rb.gy/4t5nrk.

Statutory Caps

In the case of Freilich v. SEPTA, No. 327 C.D. 2022 (Pa. Cmwlth. July 6, 2023) [opinion not reported], the Pennsylvania Commonwealth Court rejected a plaintiff’s challenge to Pennsylvania’s liability caps for state agencies, such as SEPTA and PennDOT. In so ruling, the appellate court upheld a trial court order reducing a $7 million stipulated jury verdict entered by a jury against SEPTA to the $250,000.00 statutory liability cap required by Pennsylvania law under 42 Pa.C.S.A. Section 8528(b).

Indications are that plaintiffs’ attorney plans to appeal the case up to the Pennsylvania Supreme Court. It remains to be seen whether the Plaintiff-oriented Pennsylvania Supreme Court will continue its judicial activism in favor of plaintiff’s causes by changing the established law or will instead make a rare showing of judicial restraint and hold that any changes to this law should come from the legislative branch of the Pennsylvania government.

Fair Share Act

Trial courts continue to split on the validity and enforceability of the dicta in the decision of Spencer v. Johnson, 249 A.3d 529 (Pa.Super. 2021), which decision contains superfluous commentary indicating that the Fair Share Act may not apply in cases where the plaintiff is an innocent victim of an accident and not contributorily negligent. This issue can routinely come into play, for example, in medical malpractice cases where a plaintiff is under anesthesia or where a plaintiff is a guest passenger in a motor vehicle that is in an accident.

This past year, in the case of Ace v. Ace, No. 6242-CIVIL-2020 (C.P. Monroe Co. Jan. 12, 2023), Judge David J. Williamson issued an opinion in a nonjury trial arising out of a shooting incident. The court addressed the import of the dicta in the Spencer v. Johnson decision relative to the applicability of the Fair Share Act in a case in which no liability is assessed to a plaintiff.

Williamson then noted that “there has been a lot of confusion recently as to whether or not defendants are subject to joint and several liability for a judgment, regardless of their proportionate share of liability.” After reviewing the history of the Comparative Negligence Act and the Fair Share Act, Williamson asserted that “It makes more sense that the legislature would have enacted this measure in all cases of multiple defendants, even where the plaintiff has no contributory negligence.”

That being said, Williamson went on to review the contrary result noted in the dicta put forth by the Pennsylvania Superior Court in its Spencer v. Johnson, 249 A.3d 529 (Pa. Super. 2021) decision. Williamson noted that the rationale of the Spencer court regarding Fair Share Act “appears as dicta in the Superior Court’s decision, as it was not the direct holding” of the Superior Court.

Despite noting earlier in his decision that the reasoning as contained in the Spencer decision was “absurd,” Williamson, apparently feeling compelled to do so, stated that he would “adhere to the dicta stated in Spencer in this particular case, and find joint and several liability without the application of the Fair Share Act as between both defendants” given that there was no finding of contributory negligence against the plaintiff in this case.

In contrast, another trial court judge found no fault with the validity of the Spencer v. Johnson decision. In the case of Tucchi v. Carroll, No. CV-2018-1794 (C.P. Northumb. Co. Jan. 24, 2023), a trial court judge ruled that, pursuant to Spencer v. Johnson, 249 A.3d 529, 559 (Pa. Super. 2021), that the Fair Share Act was inapplicable given that the minor plaintiff in this matter was not found to be contributorily negligent by the jury or, in other words, was an innocent plaintiff. In a footnote in his order, the judge noted that the Spencer decision “was a precedential holding of the Superior Court after an analysis of the Fair Share Act, and not “dicta” as contended by” the defendant.”

What to Watch for in 2024

As noted above, looking ahead to 2024, litigators are anticipating how the Pennsylvania Supreme Court will rule on the issue of coverage under business interruption policies as applied to the government ordered closures of businesses during the COVID-19 pandemic.

Auto accident litigators are anticipating a decision from the Pennsylvania Supreme Court on the validity of the regular use exclusion found in automobile insurance policies. Keep an eye out for a decision in the high court in the case of Rush v. Erie Insurance Exchange.

In terms of any other anticipated events in 2024, it is noted that on May 4, 2024, the Tort Talk blog, found at www.TortTalk.com and which is utilized by civil litigators as a resource for streamlined legal research on a wide variety of civil litigation topics, will celebrate 15 years of providing free updates on the law to both the bar and the bench.

Daniel E. Cummins is the managing partner of the Clarks Summit law firm of Cummins Law, a civil litigation practice. He also conducts mediations of civil litigation matters through Cummins Mediation Services. Cummins is also the sole creator and writer of the Tort Talk Blog (www.TortTalk.com), which is designed to provide continuing updates on important cases and trends in Pennsylvania civil litigation law. He can be reached at dancummins@CumminsLaw.net.

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