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Pennsylvania’s Long Arm Statute Keeps Connecticut Company in PA (PA)

September 27, 2019

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<p style="text-align: justify;">The PA Superior Court recently ruled on an issue concerning Pennsylvania’s jurisdiction over a Connecticut corporation based on its business dealings with a Pennsylvania-based software company.</p>
<p style="text-align: justify;">In <em><a href="https://www.wcmlaw.com/wp-content/uploads/2019/09/Delta-Health-v.-Companions-1.pdf">Delta Health v. Companions</a><a href="https://www.wcmlaw.com/wp-content/uploads/2019/09/Delta-Health-v.-Companions.pdf"></a>,</em> 2019 PA Super 266, the Court upheld the trial court’s overruling of Companions’ preliminary objections arguing lack of personal jurisdiction. Companions lodged the preliminary objections in response to Delta’s complaint alleging Companions’ failure to pay for Delta’s processing of software to assist in Companions’ health care business.</p>
<p style="text-align: justify;">Companions argued that it was a Connecticut corporation that is only registered in Connecticut and provided home care services to Connecticut residents while not owning any property in Pennsylvania or having any offices or employees in Pennsylvania. Delta countered that it was a Pennsylvania company and the software that was utilized by Companions was accessed in Pennsylvania and was stored and operated on computers in Pennsylvania. Delta also argued that its billable professional services were performed by Delta in Pennsylvania and that Companions’ employees conducted extensive contract negotiations via communications and in-person meetings in Pennsylvania.</p>
<p style="text-align: justify;">In its opinion, the Superior Court emphasized that Companions conceded that its representatives came to Pennsylvania to engage in contract negotiations and also contacted Delta to re-start discussions following a break in the negotiations. The Court also noted that Companions needed a password and subscription to access Delta’s restrictive software program, which was stored and operated in Pennsylvania; contrasting this situation from that of a ‘passive website’ in which a Pennsylvania website merely makes information available to foreign companies via the internet. Ultimately, the Superior Court determined that Companions’ interactions with Delta constituted the requisite minimum contacts to establish Pennsylvania’s specific personal jurisdiction over Companions and it affirmed the trial court’s overruling of Companions’ preliminary objections.</p>
<p style="text-align: justify;">Thanks to Greg Herrold for his contribution to this post. Please email <a href="mailto:VPinto@wcmlaw.com">Vito A. Pinto</a> with any questions.</p>

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