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Business Registration Sufficient to Establish Personal Jurisdiction in PA

June 29, 2018

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The Pennsylvania Superior Court recently ruled that a company’s registration in the state of Pennsylvania is sufficient to establish that company’s general personal jurisdiction in Pennsylvania.  In <em><a href="http://blog.wcmlaw.com/wp-content/uploads/2018/06/Webb-Benjamin-LLC-v.-IRG-LLC.pdf">Webb-Benjamin, LLC v. IRG, LLC</a>, </em>No. 1514 WDA 2017, the Superior Court reversed the trial court’s sustaining of preliminary objections to dismiss the plaintiff’s complaint.
In the underlying case, Webb-Benjamin sued International Rug Group (IRG) for breach of contract related to the distribution of proceeds on certain furniture sales.  IRG filed preliminary objections asserting lack of jurisdiction.  IRG is a Connecticut based company that, while registered to do business in Pennsylvania at the time the lawsuit was commenced, was not registered in Pennsylvania during the events that formed the basis of the lawsuit.  The trial court concluded that Pennsylvania’s long-arm statute does not provide jurisdiction over claims that are based on events that occurred prior to a foreign association’s registration in Pennsylvania.  Accordingly, the trial court sustained IRG’s preliminary objections and dismissed WB’s complaint.
On appeal, WB argued that the text of Pennsylvania’s long arm statutes makes no mention of precluding claims that are based on events that occurred prior to a foreign association’s registration in Pennsylvania.  In reaching its decision, the Superior Court noted that the plain language of the statute does not expressly limit jurisdiction to only those events that occur during a foreign association’s registration in Pennsylvania.  Next, the Court relied on two federal cases in the Middle and Eastern District of Pennsylvania respectively, which held that a company’s decision to register to conduct business in Pennsylvania effectively means that the company has consented to the general jurisdiction of state and federal courts in Pennsylvania.  This consent to Pennsylvania jurisdiction is sufficient to allow Pennsylvania to exercise general personal jurisdiction over a company that has registered to conduct business in Pennsylvania.
Thus, the Superior Court ruled that IRG’s subsequent registration to conduct business in Pennsylvania was sufficient to establish their personal jurisdiction in Pennsylvania, despite the fact that IRG was not registered in Pennsylvania at the time of the events that formed the factual basis of the lawsuit.  The Court therefore reversed the trial court’s order sustaining IRG’s preliminary objections, and remanded the case for further proceedings. Thanks to Greg Herrold for his contribution to this post.  Please email <a href="mailto:BGibbons@wcmlaw.com">Brian Gibbons</a> with any questions.

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