'A Titanic Decision': Pa. Supreme Court's Ruling Makes Venue Challenges Harder
Daniel Cummins, managing partner of Cummins Law, called the ruling, “another victory for the plaintiff bar at the appellate court level in Pennsylvania.”
November 29, 2023 at 06:23 PM
By Aleeza Furman
Litigation Reporter
Pennsylvania Law Weekly
What You Need to Know
The Pennsylvania Supreme Court recently held that business that only derives a small portion of its revenue from a particular county may still be sued there.
The ruling makes it harder for defendants to challenge plaintiffs' choice of venue.
Defendants must now look to other factors in addition to percentage of revenue to support their challenges.
Corporate defendants have one less way to escape being sued in Philadelphia thanks to a recent ruling from the Pennsylvania Supreme Court.
The justices’ Nov. 22 decision in Hangey v. Husqvarna rejected a commonly used venue challenge, leaving plaintiffs with better odds of keeping their lawsuits where they want them.
“This is really a titanic decision in terms of venue in Pennsylvania,” said Saltz Mongeluzzi Bendesky’s Robert Mongeluzzi, who represented plaintiffs Ronald and Rosemary Hangey in the case.
The high court held that more than just a percentage of revenue is necessary to establish that the company does not perform sufficient business in a particular county to be sued there. The court ruled that if a company maintains a “constant physical presence” in a forum county and acts to further its interests there, its activities can be considered regular business.
“That means if there is an authorized dealer: game, set, match. It’s over as a matter of law,” Mongeluzzi said. He added that the analysis in the opinion established that the question of whether or not a business regularly conducted business somewhere is about the act of selling rather than a percentage of sales.
What You Need to Know
The Pennsylvania Supreme Court recently held that business that only derives a small portion of its revenue from a particular county may still be sued there.
The ruling makes it harder for defendants to challenge plaintiffs' choice of venue.
Defendants must now look to other factors in addition to percentage of revenue to support their challenges.
Corporate defendants have one less way to escape being sued in Philadelphia thanks to a recent ruling from the Pennsylvania Supreme Court.
The justices’ Nov. 22 decision in Hangey v. Husqvarna rejected a commonly used venue challenge, leaving plaintiffs with better odds of keeping their lawsuits where they want them.
“This is really a titanic decision in terms of venue in Pennsylvania,” said Saltz Mongeluzzi Bendesky’s Robert Mongeluzzi, who represented plaintiffs Ronald and Rosemary Hangey in the case.
The high court held that more than just a percentage of revenue is necessary to establish that the company does not perform sufficient business in a particular county to be sued there. The court ruled that if a company maintains a “constant physical presence” in a forum county and acts to further its interests there, its activities can be considered regular business.
“That means if there is an authorized dealer: game, set, match. It’s over as a matter of law,” Mongeluzzi said. He added that the analysis in the opinion established that the question of whether or not a business regularly conducted business somewhere is about the act of selling rather than a percentage of sales.
The attorney for defendant Husqvarna Professional Products, Dickie, McCamey & Chilcote shareholder Frederick Bode III, said the defendants were “disappointed with the outcome.”
Marshall Dennehey partner Michael Salvati, who was not involved in the case, said the ruling creates a significant hurdle for defendants who are challenging the venue.
Salvati and others said the percentage of revenue had been a frequently used argument for why a case should be transferred.
Salvati said the companies that stand to be the most impacted by Hangey are national or global companies that could previously argue that only a small fraction of their total sales came from a particular county.
According to Salvati, the percentage was “a factor that had previously been almost dispositive” but is now “lessened in importance.” He said the percentage of revenue remains a relevant factor, but defendants must now meet a higher standard, looking to elements such as a business’ physical presence in a county.
Anapol Weiss partner Kila Baldwin, who is not involved in the case, said that while Hangey supports a more case-by-case analysis, she expects defense lawyers will try to find other numerical tools to define regular business, such as hours a store is open or the number of employees.
But for now, she said, “it gives less ground for the defendants to argue forum shopping or venue shopping.”
‘Another Victory for the Plaintiff Bar’
Daniel Cummins, managing partner of Cummins Law, called the ruling, “another victory for the plaintiff bar at the appellate court level in Pennsylvania.”
But, as a defense attorney, Cummins isn’t celebrating the outcome.
“It’s becoming more difficult for a defendant to prevail on a petition to transfer cases to a different county,” he said.
Cummins noted that plaintiffs have also come out on top in a string of recent cases dealing with forum-related issues.
In the past year and change, the Superior Court rejected defendants’ bids to escape Philadelphia as an inconvenient forum in three different precedential rulings—two of which are currently being challenged by defendants.
Cummins said the recent trend in appellate rulings is likely to drive up caseloads in forums preferred by plaintiffs.
“One might wonder if there might come a day where every case is in Philadelphia County,” he said.
But Saltz Mongeluzzi’s Ara Avrigian, who represented the Hangeys alongside Mongeluzzi and solo practitioner Howard Bashman, contended there is nothing “untoward” about bringing a case in the Philadelphia Court of Common Pleas. Avrigian said parties are drawn to the court for its efficiency and high-quality judges.
And Bashman said the high court’s Hangey ruling also benefits companies who are filing suit.
“This decision is not just something that helps injured people,” Bashman added. “It’s something that helps all plaintiffs.”
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Marshall Dennehey partner Michael Salvati, who was not involved in the case, said the ruling creates a significant hurdle for defendants who are challenging the venue.
Salvati and others said the percentage of revenue had been a frequently used argument for why a case should be transferred.
Salvati said the companies that stand to be the most impacted by Hangey are national or global companies that could previously argue that only a small fraction of their total sales came from a particular county.
According to Salvati, the percentage was “a factor that had previously been almost dispositive” but is now “lessened in importance.” He said the percentage of revenue remains a relevant factor, but defendants must now meet a higher standard, looking to elements such as a business’ physical presence in a county.
Anapol Weiss partner Kila Baldwin, who is not involved in the case, said that while Hangey supports a more case-by-case analysis, she expects defense lawyers will try to find other numerical tools to define regular business, such as hours a store is open or the number of employees.
But for now, she said, “it gives less ground for the defendants to argue forum shopping or venue shopping.”
‘Another Victory for the Plaintiff Bar’
Daniel Cummins, managing partner of Cummins Law, called the ruling, “another victory for the plaintiff bar at the appellate court level in Pennsylvania.”
But, as a defense attorney, Cummins isn’t celebrating the outcome.
“It’s becoming more difficult for a defendant to prevail on a petition to transfer cases to a different county,” he said.
Cummins noted that plaintiffs have also come out on top in a string of recent cases dealing with forum-related issues.
In the past year and change, the Superior Court rejected defendants’ bids to escape Philadelphia as an inconvenient forum in three different precedential rulings—two of which are currently being challenged by defendants.
Cummins said the recent trend in appellate rulings is likely to drive up caseloads in forums preferred by plaintiffs.
“One might wonder if there might come a day where every case is in Philadelphia County,” he said.
But Saltz Mongeluzzi’s Ara Avrigian, who represented the Hangeys alongside Mongeluzzi and solo practitioner Howard Bashman, contended there is nothing “untoward” about bringing a case in the Philadelphia Court of Common Pleas. Avrigian said parties are drawn to the court for its efficiency and high-quality judges.
And Bashman said the high court’s Hangey ruling also benefits companies who are filing suit.
“This decision is not just something that helps injured people,” Bashman added. “It’s something that helps all plaintiffs.”
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