By Susan Lasser, J.D.
A manufacturer of fire sirens is subject to general personal jurisdiction in Pennsylvania, the majority of a three-judge panel for the Pennsylvania Superior Court held in an action by New York Fire Department firefighters who alleged hearing loss injuries caused by excessive sound from sirens on fire engines. Although the manufacturer was a Delaware company and its principal place of business was in Illinois, the appellate panel held that the manufacturer’s registration in Pennsylvania as a foreign corporation provided consent to personal jurisdiction in the Commonwealth. Therefore, the panel ruled that the lower court erred in dismissing the firefighters’ actions for lack of personal jurisdiction (Murray v. American LaFrance, LLC, September 25, 2018, Platt, W.).
The seven cases consolidated for appeal in this matter stem from complaints filed by firefighters alleging that they had sustained hearing loss as a result of excessive sound exposure from fire engine sirens while working for the New York Fire Department. The firefighters, who were from Massachusetts, New York, and Florida, asserted strict liability and negligence claims against Federal Signal Corporation (FSC), a manufacturer of sirens used in fire apparatus, for injuries that allegedly occurred in New York. The manufacturer is a Delaware company with its principal place of business in Illinois.
FSC objected to the firefighters' complaints, arguing that the trial court in Philadelphia lacked personal jurisdiction over the company because: (1) its principal place of business is in Illinois; (2) it did not have corporate offices in Pennsylvania; (3) it is not a Pennsylvania domestic company; (4) it does not own or lease real property in Pennsylvania; (5) it does not have bank accounts in Pennsylvania; (6) it does not design or manufacture any products in Pennsylvania; and (7) its contacts with Pennsylvania are minimal. The trial court agreed, finding that the manufacturer was not "at home" in Pennsylvania. The court sustained FSC's preliminary objections and dismissed all claims against the company. The firefighters appealed, raising one issue: whether the trial court erred in sustaining the manufacturer's preliminary objections and dismissing the action based on lack of personal jurisdiction.
Waiver. The appellate panel first addressed FSC’s contention that the firefighters had waived the issue on appeal because they had failed to argue in response to preliminary objections at the trial court level, that personal jurisdiction is proper based on a statute or consent. According to FSC, the firefighters only had argued that jurisdiction was proper because of continuous and systematic contacts, and, thus, had waived any claim of jurisdiction based on either registration as a foreign corporation, or consent. The panel disagreed, noting that the Pennsylvania Supreme Court has held that there is no requirement in the Commonwealth’s rules of civil procedure that the non-moving party respond to a preliminary objection, nor that the party must defend claims asserted in the complaint. As such, the firefighters’ failure to respond in this matter did not sustain the manufacturer’s objections by default, nor did it waive or abandon their claim.
Personal jurisdiction. The appellate panel agreed with the firefighters contention that FSC’s registration as a foreign corporation in Pennsylvania constituted consent to general personal jurisdiction in Pennsylvania. Under Pennsylvania law, for the Commonwealth’s courts to acquire general personal jurisdiction over foreign corporations, the business either must: (1) have been incorporated in Pennsylvania; (2) consent to the exercise of jurisdiction; or (3) carry on a continuous and systematic part of its general business in Pennsylvania. Further, the Commonwealth’s general personal jurisdiction statute provides that a sufficient basis for jurisdiction exists if the corporation at issue has: (1) been incorporated under or qualifies as a foreign corporation under Pennsylvania law; (2) consented to jurisdiction; or (3) carried on a continuous and systematic part of its general business within Pennsylvania. The panel also noted that in Daimler AG v. Bauman, 134 S. Ct. 746 (2014), the U.S. Supreme Court considered the issue of general personal jurisdiction over a foreign corporation and held that due process did not permit the exercise of general personal jurisdiction over a corporation in a state where that corporation was not "at home."
The question of whether a foreign corporation consents to general personal jurisdiction in Pennsylvania by registering to do business in the Commonwealth was a matter of first impression for the superior court. It found that in its review of the case law, neither it nor the Pennsylvania Supreme Court has had the occasion to determine whether, post-Daimler, registering to do business as a foreign corporation in the Commonwealth constituted consent for the purposes of exercising general personal jurisdiction. However the appellate panel found persuasive a decision by the U.S. District Court for the Eastern District of Pennsylvania, Bors v.Johnson & Johnson, 208 F. Supp. 3d 648 (E.D. Pa. 2016), which provided well-reasoned analysis that the panel cited with approval. On the question of whether Daimler eliminated consent by registration as a basis for jurisdiction, the federal district court concluded that consent remained a valid form of establishing personal jurisdiction under the Pennsylvania registration statute after Daimler based on the Pennsylvania statute specifically advising the registrant of the jurisdictional effect of registering to do business—i.e., consenting to general personal jurisdiction in Pennsylvania.
Therefore, in the case at bar, the panel ruled that because FSC had registered as a foreign corporation to do business in Pennsylvania, it consented to general personal jurisdiction in the Commonwealth. Accordingly, the panel vacated the orders of the trial court sustaining the manufacturer’s preliminary objections and remanded the cases to the trial court.
Dissent. Judge Bowes filed a dissenting opinion stating that the case did not involve Pennsylvania in any meaningful way. The firefighters were from Massachusetts, New York, and Florida; FSC is a Delaware company and its principal place of business is in Illinois; and the cause of action was for injuries that allegedly occurred in New York. The firefighters’ pleadings asserted jurisdiction based upon the manufacturer’s alleged continuous and systematic contacts with Pennsylvania. However, as determined by the trial court, those contacts simply do not exist. Because the firefighters failed to assert any valid grounds for Pennsylvania to exercise personal jurisdiction over FSC—including the grounds the firefighters were seeking to assert for the first time on appeal, the judge said—the trial court properly dismissed the claims against FSC. As the firefighters failed to establish personal jurisdiction in the lower court, the judge said that the alternative basis for the court’s jurisdiction now brought on appeal for the first time should be waived.
Moreover, according to Judge Bowes, even if the firefighters were shielded under Pennsylvania law from waiver, she disagreed with the panel that that registration was tantamount to consent to personal jurisdiction, finding the jurisprudence was flawed and incongruous with the fundamental aspect of due process first highlighted in International Shoe Co. v. Washington, 326 U.S. 310, 319 (1945). She opined that a foreign company situated similarly to FSC cannot be subjected to the personal jurisdiction of a forum state unless it has "fair warning that a particular activity" will expose it to jurisdiction. As such, she said that the Pennsylvania registration requirement, which the panel was now treating as synonymous with "consent," failed to provide the requisite warning to satisfy the Supreme Court’s articulation of due process.
Attorneys: Shawn Michael Sassaman (Bern Ripka Cappelli, LLP) for Kenneth Murray. Wayne A. Graver (Lavin, O'Neil, Cedrone & DiSipio) and James David Duffy (Thompson Coburn LLP) for American LaFrance, LLC and Federal Signal Corp.
Companies: American LaFrance, LLC; Federal Signal Corp.
MainStory: TopStory JurisdictionNews IndustrialCommercialEquipNews PennsylvaniaNews
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