Wade Clark Mulcahy LLP

When it comes to determining an appropriate venue, national sales data cannot be the sole determining factor in a quantity analysis, the Pennsylvania Supreme Court ruled last month in the case of Hangey v. Husqvarna.  In Hangey, plaintiffs Ronald and Rosemary Hangey filed a complaint against Husqvarna Professional Products, Inc. (“HPP”), Trumbauer’s Lawn and Recreation, Inc (“Trumbauer’s”) and others in the Court of Common Pleas in Philadelphia County.  The Hangeys alleged that Ronald was thrown off his mower outside his home.  The mower then rolled over Ronald’s legs with the blades moving at high speed, thus causing severe and catastrophic injuries to his legs.  The Hangeys subsequently amended their complaint to include other Husqvarna entities.

HPP and Trumbauer’s filed preliminary objections to the amended complaint, arguing venue in Philadelphia was improper. The trial court conducted a quality-quantity analysis required under the Pennsylvania Supreme Court’s decision in Purcell v. Bryn Mawr Hosp. The trial court found HPP’s activities satisfied the quality prong but not the quantity prong, as only $75,310 out of HPP’s $1.393 billion in national revenue came from their direct sales in Philadelphia County (.005%).  The case was then transferred to Bucks County.

The Superior Court reversed, holding that the percentage of a defendant’s business in a particular county cannot be the sole evidence relevant to a quantity analysis.  Instead, courts must consider all of the evidence presented, including the scope of a defendant’s business, in determining the quantity prong.  Additionally, the Superior Court found that the sales amount was sufficient to be “considered habitual,” and ordered that venue was appropriate in Philadelphia. 

Last month, the Supreme Court affirmed the Superior Court’s decision.  The Supreme Court noted it was clear the trial court’s decision was based only on the percentage of HPP sales made in Philadelphia County, which conflicted with precedent on this issue. The Court explicitly stated that the percentage of a company’s revenue cannot be the sole determining factor to establish whether a company regularly conducts business in that county.  It also affirmed the Superior Court’s designation of Philadelphia as the proper forum, noting HPP’s sales to retailers and its distribution of products to two Philadelphia retailers that have physical locations in the county and are permitted to stock, display and sell HPP products on a regular basis. 

Plaintiffs routinely file their cases in Philadelphia, as it has a reputation as a plaintiff-friendly forum.  But how much is enough when it comes to a business’s sales and activities for the purpose of venue? The Supreme Court, in a rather narrow decision, has now directed courts to consider the whole picture and not just national sales data.  With this narrow decision, courts may see more challenges to venue with respect to national companies doing limited business in Philadelphia County. Stay tuned…