Litigation

On November 22, 2023, the Supreme Court of Pennsylvania clarified the “quality-quantity” test used to determine whether a company “regularly conducts business” in a county under Pa. R.Civ.P. Rule 2179(a)(2). In Hangey v. Husqvarna Professional Products, Inc., --- A.3d ----, 2023 WL 8102730 (Pa. 2023), a 5-1, precedential opinion, the Supreme Court held that, in applying the quantity prong, “the percentage of a company’s total revenue derived from the forum county,” viewed in isolation, “cannot establish that the company does not regularly conduct business within that county.” Instead, the court clarified that “the crux of the court’s inquiry is regularity [of doing business in the county].” The quantity prong is therefore satisfied “when a company maintains a constant physical presence in the forum county to perform acts that are ‘directly[] furthering, or essential to, [its] corporate objects[,]’ even when it does so through an authorized dealer.”

This case arose from a 2016 accident in which Ronald Hangey was injured while using a Husqvarna riding lawnmower. Mr. Hangey filed a product liability lawsuit in Philadelphia County, even though he purchased the lawnmower in Bucks County and the accident occurred in Wayne County. Husqvarna Professional Products, Inc. (“HPP”), Husqvarna Group, and Trumbauer’s Lawn and Recreation, Inc. filed preliminary objections arguing improper venue. After discovery on the issue, the trial court transferred the case to Bucks County, holding that the Hangeys failed to satisfy the quantity prong because HPP’s sales in Philadelphia County were only “about 0.005%” of its U.S. sales revenue.

On appeal, the Superior Court of Pennsylvania, sitting en banc, reversed the trial court, and the Supreme Court affirmed the Superior Court. In doing so, the Supreme Court held that “even if the court finds the [sales] percentage relevant in that particular case, it is simply a data point that must be considered in the context of the company as a whole to determine regularity” (emphasis in original). The court added:

The facts HPP maintained business relationships with these authorized dealers, and year after year executed consistent sales, tend to establish HPP’s business activities in Philadelphia County were “so continuous and sufficient to be termed general or habitual.” Monaco [v. Montgomery Cab Co.], 208 A.2d [252,] 256 [(Pa. 1965)]. This likely conclusion becomes unavoidable when we consider HPP’s constant physical presence in Philadelphia County.

This important decision lowers the bar somewhat for plaintiffs seeking to sue in a forum where the transaction or incident did not occur and where the defendant-corporation’s sales revenue is de minimis.

Justice Dougherty authored the majority opinion, joined by Chief Justice Todd and Justices Donohue, Wecht, and Mundy. Justice Brobson filed a dissenting opinion.