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Defense Digest

Important New Developments in Jurisdiction and Venue in Pennsylvania

Defense Digest, Vol. 28, No. 3, October 2022

October 1, 2022

Key Points:

  • The Pennsylvania Superior Court has made it more difficult for businesses to challenge venue based on having minimal contact in the county where suit was filed.
  • The Pennsylvania Supreme Court has held that a business is not subject to jurisdiction in Pennsylvania solely on the basis that it has registered to do business here.

Two new appellate cases in Pennsylvania have, at least for now, significantly altered the landscape on jurisdiction and venue in Pennsylvania.

The change in jurisdiction comes as a result of a Pennsylvania Superior Court ruling in Mallory v. Southern Railway Co., 266 A.3d. 542 (Pa. Super. 2021), where the court decided that a corporation cannot be made subject to jurisdiction in Pennsylvania based solely on the fact that it has registered to do business in Pennsylvania, which has long been the standard. Mallory arose out of a claim by a former Norfolk Southern employee who brought suit in the Philadelphia Court of Common Pleas for cancer alleged to have been caused by asbestos exposure while he worked for the company in Ohio and Virginia. The plaintiff did not allege that any harmful exposure occurred in Pennsylvania, and the Virginia-based defendant did not have any direct connection to Pennsylvania.

However, Pennsylvania has a requirement, pursuant to Pa.C.S. § 5301(a)(2), that a corporation which desires to do business in Pennsylvania must register to do business and submit to general jurisdiction in Pennsylvania. Norfolk Southern argued that it had no connection to Pennsylvania and that it had not consented to jurisdiction by merely registering to do business. The trial court agreed and dismissed the plaintiff’s action.

On appeal by the plaintiff, the Superior Court upheld the ruling by the trial court, as did the Pennsylvania Supreme Court, which noted that the corporation, faced with the choice between registering or not being allowed to do business in the state, had not voluntarily consented to jurisdiction. Instead, “(f)aced with this Hobson’s Choice, a foreign corporation’s consent to general jurisdiction in Pennsylvania can hardly be considered voluntary.” As such, Pennsylvania’s general jurisdiction statute violated the defendant’s 14th Amendment right to due process under the law.

As a result of this holding, at least for now, there is no general jurisdiction over corporations in Pennsylvania based solely on registering to do business in the Commonwealth. However, the United States Supreme Court has taken up the case. That court’s decision could have important implications for corporations across the nation.

On the one hand, a ruling affirming the Pennsylvania Supreme Court’s holding would not have a great impact, as the majority of states do not have similar laws regarding consent to jurisdiction through registration to do business. On the other hand, if the United States Supreme Court rules in favor of the plaintiff, it could broaden the venues where corporations could be sued and might prompt forum shopping by plaintiffs seeking more plaintiff-friendly venues. Certainly, corporations and their insurers will be opposing venue based on registration for the time being and awaiting the decision of the United States Supreme Court.

The new, and unfortunate, change in Pennsylvania law on venue arises out of the ruling in Hangey v. Husqvarna, et al., 247 A.3d. 1136 (Pa. Super. 2021), which makes it much easier for plaintiffs to obtain venue over businesses and correspondingly more difficult for businesses to challenge venue in unfavorable venues, such as Philadelphia County, based on a lack of contact with the county. The plaintiff, a Bucks County resident, purchased a riding mower from a dealer in Bucks County and was injured in Bucks County when he fell off his mower and it ran over him. The plaintiff filed suit in Philadelphia County. The defendant challenged venue, arguing that it did not regularly conduct business in Philadelphia County. It established that it did $1.4 billion in sales in the United States in the year of the accident, of which a mere $75,310 came from sales in Philadelphia County, almost all of which came from a single dealer. This amounted to an infinitesimal fraction of its sales, only 0.005%. The Philadelphia trial court found that the defendant’s contact with Philadelphia was not sufficient to establish venue there and transferred the case out of Philadelphia to Bucks County. The plaintiff appealed the ruling to the Pennsylvania Superior Court.

In order to determine venue, courts have traditionally assessed whether a defendant’s contacts with the plaintiff’s chosen venue are of sufficient quantity and quality. The previous rule had been that the quantity test was satisfied if the defendant did about one percent or more of its business in a chosen venue. This percentage standard was equitable because it applied the same standard to large and small businesses.

Unfortunately, Hangey has thrown out this standard and completely changed the applicable venue analysis. The Hangey decision held that:

The percentage of a company’s overall business that it conducts in a given county, standing alone, is not meaningful and is not determinative of the ‘quantity’ prong. Each case turns on its own facts and we must evaluate evidence of the extent of a Defendant’s business against the nature of the business at issue. A small or local business may do all of its work in just a few counties or even a single one, while a large may span the entire nation. Indeed, the percentage of sales in a multi-billion-dollar company makes in a particular county will almost always be a tiny percentage of its total sales. Courts thus should not consider percentages in isolation. Rather, Courts must consider all of the evidence in context to determine whether the Defendant’s business activities in the county were regular, continuous and habitual.

Boiled down, the effect of this decision is that venue can now be established by either a tiny percentage of business done in a county or a very low dollar amount of revenue, especially for a large company. Large companies can now be subject to venue merely because they generate significant revenue in a county, even if the percentage of that revenue is miniscule. For example, venue over a company that produces expensive products could foreseeably be established by the sale of only a few units of that product within the county. In challenging venue, defendants can no longer rely on a low percentage of business in a county, but must go beyond that to address the volume of revenue. Unfortunately, that bar has been set very low at $75,000.

In May 2022, the Pennsylvania Supreme Court granted review of Hangey. Defendants should still consider asserting improper venue in case the Pennsylvania Supreme Court reverses Hangey. Nevertheless, if the issue is not raised, a reversal by the Pennsylvania Supreme Court would be a change in the law, which could also be a fair basis to raise the issue for the first time.


 

Defense Digest, Vol. 28, No. 3, October 2022 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2022 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

Firm Highlights

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict. 

Thought Leadership

NJ Workers' Compensation Legislation Update

A couple more bills were introduced for the 2026-27 session. Any updates since February have been highlighted in bold. A1023 | S3984 Medical use of cannabis under certain circumstances This requires workers’ compensation, PIP, and health insurance coverage for the medical use of cannabis under certain circumstances. It was introduced on January 13, 2026 and referred to the Assembly Financial Institutions and Insurance Committee. It was also introduced on March 19, 2026 and referred to the Senate Commerce Committee. A1045 Certain injuries to volunteer and professional public safety and law enforcement personnel This revises workers’ compensation coverage for certain injuries to volunteer and professional public safety and law enforcement personnel. It was introduced on January 13, 2026 and referred to the Assembly Labor Committee. A3724 Personal liability to employer officers for failure to pay for coverage This provides personal liability for owner, executive officer, or executive director of employer for failure to pay for workers' compensation coverage. It was introduced on January 13, 2026 and referred to the Assembly Labor Committee. On May 7, 2026, it was reported and referred to Assembly Judiciary Committee. A4617 Certain workers' compensation supplemental benefits and funding method This concerns certain workers' compensation supplemental benefits and funding method. For a permanently and totally disabled worker or surviving dependents after December 31, 1979, with some exceptions, this bill provides for an annual cost of living adjustment in the weekly workers’ compensation benefit rate. It was introduced on March 10, 2026, and referred to the Assembly Labor Committee. S241 Inclusion in database of appointed officials This requires that workers’ compensation judges and administrative law judges be included in database of appointed officials. It was introduced on January 13, 2026 to the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee. A1870 | S1379 Workers' compensation benefits for certain workers due to September 11, 2001, terrorist attacks This provides workers’ compensation benefits for certain public safety workers who developed illness or injury as result of responding to September 11, 2001 terrorist attacks. It was introduced on January 13, 2026 and referred to the Assembly Labor Committee. It was also introduced on the same day and referred to the Senate Labor Committee. On February 5, 2026, it was reported from the Senate Committee, 2nd Reading, and referred to the Senate Budget and Appropriations Committee. A2779 | S1521 Excludes Certain Illegal Aliens This excludes certain illegal aliens from workers’ compensation and temporary disability benefits. It was introduced on January 13, 2026 and referred to the Senate Labor Committee. It was also introduced on the same day and referred to the Assembly Labor Committee. A2792 | S1555 Prevent Intoxicated Employees from Workers’ Compensation This prevents intoxicated employees from receiving workers’ compensation. It was introduced on January 13, 2026 and referred to the Senate Labor Committee. It was also introduced on the same day and referred to the Assembly Labor Committee. S2290 Increase Mandatory Retirement Age This increases statutory mandatory retirement age for Supreme Court Justices, Superior Court Judges, Tax Court Judges, Administrative Law Judges, and Workers’ Compensation Judges from 70 to 72. It was introduced on January 13, 2026, and referred to the Senate Judiciary Committee. A3167 | S2372 Workers’ compensation insurance requirements for certain corporations and partnerships. This concerns workers’ compensation insurance requirements for certain corporations and partnerships. It was introduced on January 13, 2026 and referred to the Senate Labor Committee. It was also introduced on the same day and referred to the Assembly Labor Committee. A1384 | S2757 Reduce Statute of Limitations in Medical Fee Disputes This reduces statute of limitations from six years to two years in medical fee disputes in workers’ compensation matters. It was introduced on January 13, 2026 and referred to the Senate Labor Committee. It was also introduced on the same day and referred to the Assembly Labor Committee. S3144 Testimony in Workers’ Compensation This concerns submission of testimony in workers’ compensation claims. It was introduced on January 13, 2026, and referred to the Senate Labor Committee. S3342 Increase Mandatory Retirement Age This increases statutory mandatory retirement age for Supreme Court Justices, Superior Court Judges, Tax Court Judges, Administrative Law Judges, and Workers’ Compensation Judges from 70 to 75. It was introduced on February 5, 2026, and referred to the Senate Judiciary Committee. A3548 | S3571 Maximum benefits for certain volunteers This provides certain volunteer and other workers with maximum compensation benefit for workers' compensation claim regardless of outside employment.. It was introduced on January 13, 2026 and referred to the Senate Labor Committee. On March 2, 2026, it was reported from the Senate Committee, 2nd Reading, and referred to the Senate Budget and Appropriations Committee. It was also introduced on the same day and referred to the Assembly Labor Committee. On May 7, 2026, it was reported and referred to Assembly State and Local Government Committee.

News

Marshall Dennehey Again Earns Recognition in Distinguished Chambers USA

Thought Leadership

Legislation Proposed to Reduce the Cost of Prescription Topical Drugs

In March, Pennsylvania Senate Bill 1215 was introduced in an effort to address the high cost of prescription topical drugs. According to the bill’s sponsor, the issue is excessive reimbursement rates for topical drugs that are essentially alternate versions of readily available, less expensive over the counter drugs. A study performed by The Workers’ Compensation Research Institute (WCRI), shows that Pennsylvania has the highest share of prescription reimbursements and the highest average quarterly payments for topical drugs.  The proposed bill would provide for payment for each ingredient separately, instead of reimbursing a single inflated price, deny payment if an ingredient lacks a valid National Drug Code, limit total reimbursement to $400 per 30 day supply no matter what ingredients are used, ban reimbursement for compound drugs that duplicate existing commercial drugs, and add a flat $20 compounding fee for pharmacies or physicians who prepare the medication. The goal? To eliminate inflated billing practices and reduce costs for employers and insurers.  Currently, the bill is in committee. We will monitor the proposed legislation as it advances and provide updates as to any significant developments that may occur. 

Thought Leadership

What’s Hot in Workers’ Comp - News and Results*

RESULTS* Ben Durstein (Wilmington) obtained a favorable decision involving a claimant who fractured his patella in a work accident requiring two surgeries. The IAB rejected the claimant’s medical expert’s opinion that he sustained a 25% permanent impairment to the right lower extremity. Instead, the board accepted the opinion of the employer’s medical expert that the appropriate permanency was 13% utilizing the 6th Edition of the AMA Guides to the Evaluation of Permanent Impairment. Tony Natale III (King of Prussia) successfully had a claim petition alleging new injuries and periods of disability dismissed based on full recovery. The claimant was injured when his skid loader was struck by another loader in the process of baling hay. Original injuries were accepted and the claimant returned to work. Thereafter, the claimant abandoned work and filed a claim petition to assert new injuries and extended disability. Cross examination of the claimant’s medical expert stunningly revealed his failure to review claimant testimony, his lack of awareness of a social security disability decision detailing the existence of claimant’s alleged work-related conditions prior to the date of work injury, and his failure to understand that the claimant admitted to full recovery of injuries for which he was continuing to treat. Tony Natale III (King of Prussia) successfully obtained a defense verdict in a Medicare conditional payment lien third level appeal. The United States government alleged a Medicare conditional lien payment was due and owing in the upper six-figure range based on an auto accident and PIP policy for which the government conditionally became the primary carrier. The government argued that our client, the PIP carrier, was the primary payer and, under federal law, must reimburse the government for its conditional lien payment. At the third-level appeal hearing, the government’s position was refuted by the revelation that the date of injury tied to the medical bills associated with the lien was glaringly and chronologically prior to the insurer’s PIP policy date. The court held that based on this evidence and argument, the government could not meet its requirements to assert a lien against our client. A. Judd Woytek (King of Prussia) and John Abda (Scranton) successfully had a workers’ compensation claim petition granted for medical benefits only for a closed period with no wage loss awarded. The claimant alleged multiple injuries as the result of a very minor motor vehicle incident where a co-worker’s delivery van rolled down an incline of approximately six feet, and bumped into the rear of the claimant’s delivery van. He claimed he was thrown forward and suffered head and neck injuries, along with aggravating a pre-existing ankle injury. The claimant was also terminated following the accident for having a large hunting knife in his van, which was against the employer’s workplace violence policy. The judge granted the claim for a mild concussion and an ankle contusion, but terminated medical benefits as of the date of our IME’s. The judge found that no wage loss benefits were payable as the claimant was terminated for cause and work remained available to him. The judge found our medical experts to be more credible than the claimant’s, along with finding our four employer witnesses to all be credible. The trial team was assisted by paralegal Bonnie Zemek (King of Prussia). Eric Scott Thompson (Wilmington) was successful in a workers’ compensation matter in Delaware. On October 15, 2024, the claimant was injured while performing fire training in a multistory building when he tripped over a fire line, injuring his right knee. The claimant received regular and consistent treatment for the right knee through August 29, 2025, when he presented with left knee complaints for the first time. His treating orthopedist diagnosed a hamstring strain. The claimant was next seen October 15, 2025, with continued left knee complaints, and was referred to a total knee doctor within the practice. He was then diagnosed with a posterior root tear of the medial meniscus. Our expert testified that it was not plausible for a lateral hamstring strain to progress to a meniscal tear in two months. The claimant required a total knee replacement that was ultimately performed in February 2026. In the six months between the time of initial presentation with left knee complaints and the total knee replacement, conservative care consisted of a single injection. Our expert testified that posterior root media meniscal tears can respond to conservative care, and it was not known if it would with the claimant because it was not adequately explored. The Industrial Accident Board agreed with our expert and determined that the claimant failed to meet the burden of establishing more likely than not that the left knee complaints were caused by overloading/overuse as a result of the compensable injury to the right knee. They also agreed that the claimant was able to return to work in a sedentary capacity as opined by his physicians and our expert prior to the left total knee replacement and that there were employment opportunities available within his restrictions and capabilities as presented by the vocational expert. As a result, the claimant was no longer entitled to total disability benefits and will receive partial disability benefits for which he is limited to 300 weeks. Michele Punturi (Philadelphia) and Alana Staniszewski (Pittsburgh) had a termination petition granted in a Pennsylvania workers’ compensation case. The petition involved an echocardiography technologist with long-term employment at a local hospital who sustained a right shoulder injury resulting in surgery in January 2024. Following surgery, the claimant was diagnosed with a frozen shoulder and underwent additional surgery in June 2024, with a recommendation for a third surgery. The opinions of the defense medical expert, a Board-certified orthopedic surgeon, were found credible, persuasive, and competent based upon the extensive history he obtained from the claimant, analysis of the mechanism of injury, and review of records, along with comparison of MRIs from October 2023, February 11, 2024, and January 6, 2025, which failed to reveal any causal relationship other than a strain/sprain of the right shoulder. This evidence supported that the claimant had fully recovered, and was not in need of any ongoing medical treatment and/or restrictions. In particular, despite allegations of injuries beyond a sprain/strain, the defense medical expert identified that those allegations were not consistent with what was found at the time of surgery, and elements of the surgery were to treat a chronic and degenerative condition. Additionally there were no ongoing issues or problems with the subscapularis, which was intact, consistent with the follow-up MRI of February 11, 2024, and the claimant did not have evidence of a frozen shoulder. In fact, the MRIs and mechanism of injury, he opined, did not support any injury causing tendonitis or inflammatory conditions within the bicep tendon. Furthermore, multiple days of surveillance footage demonstrated the claimant’s normal use, with the ability to sweep and shovel snow, operate her vehicle, raise her arms above shoulder level, and use a broom – all without any observable difficulty, which challenged the claimant’s credibility of a disability and further established a lack of causation. As a result of this favorable decision, supersedeas fund reimbursement will be obtained for both wage loss and medical benefits through the supersedeas fund recovery process. *Prior Results Do Not Guarantee a Similar Outcome NEWS Heather Carbone (Jacksonville) was a panelist for a webinar hosted by The Workers’ Compensation Claims Professionals (WCCP) Association. As part of the “Meet the Experts” Series, the speakers addressed “Afterthoughts that Undermine a Successful Mediation,” highlighting the pitfalls and challenges of underprepared or unprepared mediation participants. The discussion included appropriate pre-mediation communications, setting of expectations, management of expectations, and working through the unexpected or unprepared. Attendees gained ideas about how and when to prepare, best practices, and the potential for non-parties (spouse, significant other, risk owners-insurers) to have differing perspectives or concerns than the actual employee and employer. On May 21-22, 2026, A. Judd Woytek, (King of Prussia) joined a panel at the CLM Alliance (Claims and Litigation Management Alliance) Work Comp Conference in Nashville to present "We See You: How Employee Engagement Enhances Work Comp Outcomes." Judd and his fellow panelists discussed the positive impact of employee engagement on claim outcomes, return-to-work timelines, and overall claim costs.

Result

Summary Judgment Secured, Preserving $750,000 in Coverage for Insured in Major Trucking Liability Dispute

Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.

Event

29th Annual FDLA Florida Liability Claims Conference

Jim and Erica will team up to present, "Supporting the Next Generation: Connecting with Associates." This panel-style presentation will explore communication best practices from the perspective of a senior shareholder and newer associate. The discussion will focus on the communication styles of different generations and effective strategies to avoid communication breakdowns. Topics to be discussed include the hiring process, perceptions of defense work among newer lawyers, work-life balance issues after hiring, and mentoring.

blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

graphic with Maria Granaudo photo text announces she has joined the firm as a shareholder in the Health Care Dept.

News

Maria R. Granaudo Joins Marshall Dennehey’s Wilmington Office As a Shareholder in the Health Care Department

News

Tiere J. Phillips Elected to the Judicial Committee of the Allegheny County Bar Association