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Defense Digest

After Further Review: Manufacturers & Sellers Incidental Contacts and their Impact on Venue

Defense Digest, Vol. 32, No. 1, March 2026

March 1, 2026

Key Points:

  • A manufacturer and seller of retail goods should seek a transfer of venue if their online sales in the plaintiff’s selected forum generate limited revenue for the company.
  • The mere act of online sales in a Commonwealth forum does not give rise to laying venue where these sales occur – the actions of the manufacturer or seller must also be deemed continuous, habitual, and systemic in that venue.
  • Where a manufacturer or seller has no physical presence in the forum – such as brick‑and‑mortar locations, in‑state sales representatives, or the licenses and authorizations required to conduct business in Pennsylvania – it may possess a strong basis for arguing that venue is improper.

In today’s world of online advertisement and sales, manufacturers and sellers are seemingly serving forums at an increasing level. This trend is here to stay, as consumers across the nation and Commonwealth are adapting to, and addicted to, the ease of online shopping. As discussed below, the capacity to sell goods online has resulted in an ever-evolving, liability concern: forum shopping and unfavorable venues.

While online shopping may be a boon for the consumer, it raises concerns for manufacturers and sellers of goods. Mainly, how does the nature of a manufacturer’s and seller’s online presence impact its prospective liability in forums across the Commonwealth? After all, the reality of serving consumers in Philadelphia County or Lackawanna County creates a range of exposure more dire than, say, Clinton County or Columbia County. The nature of online sales was recently addressed by the Pennsylvania Superior Court in Watson v. Baby Trend, Inc., 308 A.3d 860 (Pa. Super. 2024). While the purchase involved in Watson occurred in a retail store – Babies “R” Us – in Bucks County, Pennsylvania, the nature of the manufacturer’s online sales formed the basis of the plaintiff’s decision to select the Philadelphia Court of Common Pleas as the forum to file suit.

The Watson case was brought as a result of the plaintiffs’ infant daughter dying of asphyxiation while sleeping in a car seat manufactured by the the defendant, Baby Trend. An amended complaint was filed in October of 2021, in the Philadelphia County Court of Common Pleas, bringing products liability/strict liability, negligence, and breach of warranty claims against Baby Trend. Later that month, Baby Trend filed preliminary objections, asserting that the Philadelphia Court of Common Pleas was not the proper venue for suit.

Baby Trend argued Philadelphia was an improper venue as it did not own real estate in Philadelphia County, the car seat was not purchased in Philadelphia County, the tragic incident itself did not occur in Philadelphia County, and, most importantly, Baby Trend did not conduct substantial, continuous, and systemic business activities in Philadelphia County.

In this regard, the Philadelphia Court of Common Pleas analyzed Baby Trend’s sales data under the well-established “quality-quantity” venue test. As noted in previous Superior Court precedent, “[a] business entity must perform acts in a county of sufficient quality and quantity before venue in that county will be established.” Zampana-Barry v. Donaghue, 921 A.2d 500, 503 (Pa. Super. 2007) (emphasis added).

Baby Trend’s business model is largely to sell its goods through big-box retailers, such as Walmart and Target. The Philadelphia Court of Common Pleas determined that roughly 99% of its sales occurred through big-box retailers. While it did have an online presence, this only comprised 1% of its sales revenues. The plaintiffs attempted to use Baby Trend’s online sales in Philadelphia County as proof that their acts were of a sufficient “quality and quantity” to justify their selected venue. The Philadelphia Court of Common Pleas ultimately rejected this argument, sustaining the defendant’s preliminary objections, and transferred suit to Bucks County in August of 2022. As a result of that decision, the plaintiffs appealed to the Superior Court.

The Superior Court narrowed its review of the trial court’s decision by further analyzing Baby Trend’s sales data and its applicability to the “quality-quantity” test. The Superior Court described the 1% of online sales directed to Philadelphia County consumers as incidental and de minimis. Thus, the quality prong was not satisfied. This is a big takeaway as it provides manufacturers with a clear-cut data point as to what kind of impact their online sales will have in relation to the forum they may expect to be haled into.

Further, the Superior Court reasoned that the quality-quantity test was not satisfied because Baby Trend did not own real estate in Philadelphia; did not have a place of business there; did not employ sales representatives there; did not own licenses, authorizations, or registrations from the Commonwealth of Pennsylvania; and was not registered as a foreign corporation for the purpose of doing business in Philadelphia. Thus, the court determined that Baby Trend’s contacts in Philadelphia did not support suit in the forum because the evidence suggested that its contacts with Philadelphia were incidental by nature and would not be seen as continuous, habitual, or regular.

The Honorable Terrence R. Nealon of the Lackawanna Court of Common Pleas relied on Watson in a case currently being handled by our Scranton, PA office. While our preliminary objections to venue were overruled in that matter, Judge Nealon based his decision on the fact that an individual defendant had been properly named – making venue proper under Pa. R.C.P. 1006(a)(1). However, in his decision, Judge Nealon cited Watson as authority on proper venue, ultimately reasoning that the parties would have been directed to engage in venue discovery – as they did in Watson – to properly determine if the defendant’s actions in Lackawanna County were continuous, general, or habitual. See Celli v. Endless Mountains Extended Care, LLC, 2024 WL 4182838 (C.P. Lacka. Sept. 12, 2024).

Thus, Watson serves as a significant Pennsylvania decision for determining proper forum/venue for cases brought against manufacturers and sellers. Plaintiffs often seek to establish venue in plaintiff-friendly forums, aided by tenuous connections to the forum. However, Watson provides the defense bar with a myriad of arguments to combat these efforts, particularly in the context of retail liability.

John works in our Scranton, PA office. He can be reached at (570) 496-4640 or JPKelly@mdwcg.com.

Firm Highlights

Thought Leadership

The Tolling Trap: Filing Alone Will Not Toll the Statute Without Good-Faith Service

The Eastern District of Pennsylvania recently reinforced a critical limitation on bad faith claims, holding that a timely filing alone will not preserve a cause of action absent a good-faith effort to serve the original process. The plaintiff had presented a claim for underinsured motorist benefits to his auto insurer. The insurer evaluated the claim and determined that the plaintiff’s accident-related damages did not exceed the bodily injury liability insurance limits of the at-fault driver and denied his claim. Among other claims, the plaintiff sought to present a claim for insurance bad faith under 42 Pa. C.S.A. § 8371, to which a two year statute of limitation applies. He first filed a praecipe for writ of summons before the expiration of the statute of limitation. However, the plaintiff did not attempt to serve the praecipe or writ until after the statute of limitations had expired. Additionally, the service failed as the plaintiff had mailed the original process to an incorrect address. Despite receipt of the Postal Service’s failure to deliver the original process, the plaintiff did not attempt to re-serve the writ. Two months later, the plaintiff filed a complaint and then successfully served that complaint. The insurer sought to dismiss the plaintiff’s bad faith claim as time-barred by the statute of limitations. The district court agreed. Though the plaintiff had filed a praecipe for a writ of summons prior to the expiration of the statute of limitations, the statute is only tolled if there is a good faith effort to serve that original process. In this case, the court determined that the plaintiff had failed to perform a “good faith effort to serve the original process”. Additionally, though the filing and service of a complaint can serve as alternative original process when the lawsuit is commenced by the filing of a praecipe for a writ of summons, the plaintiff filed his complaint after the statute of limitations had expired. The plaintiff’s bad faith claim was therefore determined to be barred by the statute of limitations and dismissed by the court, with prejudice. A key takeaway for the defense is not to assume that the statute of limitations has been successfully tolled by a plaintiff merely because a praecipe for a writ of summons or complaint has been filed prior to the expiration of the statute. A filed complaint or writ is only part of the equation. The defense should carefully review the docket and filings to confirm that the plaintiff also performed the requisite good faith effort to serve that original process. A thorough review of the docket may reveal that the plaintiff failed to make the good-faith service efforts necessary to toll the statute of limitations.

Bret E. Dubbert Joins Marshall Dennehey’s Orlando Office as Special Counsel in the Casualty Department

News

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Thought Leadership

Florida Supreme Court Rules Florida Statute §627.70152 Does not Apply Retroactively

In a decision that resolves years of appellate uncertainty and confirms that insurers and insureds alike can rely on the legal framework in place when a policy is issued, the Supreme Court of Florida last week found that Florida Statute §627.70152, which involves an insured’s requirement to provide an insurer with pre-suit notice before filing a suit, cannot be applied retroactively. In Universal Property & Casualty Insurance Company v. Hughes, the Court was presented with the issue of whether the statutory pre-suit notice requirement applied retroactively and whether it would apply to a breach of contract of an insurance policy that was issued before the statute went into effect. Before the Court was an appeal from a homeowner, Ms. Hughes, who sued her insurance carrier, Universal Property & Casualty Insurance Company (Universal) for breach of contract under an insurance policy that was in effect from April 24, 2019 through April 24, 2020. During the policy period, Ms. Hughes suffered a loss and, on May 29, 2019, made a claim for water damage. The carrier investigated the loss and issued payment; Ms. Hughes disputed the payment, finding the amount insufficient for repairs. On July 1, 2021, Florida Statute §627.70152 went into effect, which required insureds to provide notice of intent to initiate litigation against the carrier prior to filing a lawsuit; if an insured filed the lawsuit without complying with §627.70152, a court must dismiss the case without prejudice. On August 4, 2021, Ms. Hughes filed her lawsuit against Universal for breach of contract. Universal moved to dismiss based on her failure to comply with §627.70152. Ms. Hughes contended the notice requirement could not be applied retroactively. The trial court disagreed and dismissed the lawsuit without prejudice, and Ms. Hughes appealed. During the appeal, the Fourth District Court of Appeal, in Cole v. Universal Property & Casualty, 363 So. 3d 1089 (Fla. 4th DCA 2023), ruled that Florida Statute §627.70152 did apply retroactively to policies issued before the effective date of §627.70152. However, the Sixth District Court agreed with Ms. Hughes and overturned the trial court’s ruling, finding the statute could not retroactively apply to policies issued prior to the statute effective date. Thereafter, the other district courts weighed in, with the Third District Court agreeing with the Fourth District Court, and the First, Second and Fifth District Courts agreeing with the Sixth District Court. In resolving the conflict amongst the district courts, the Supreme Court advised “as a general rule, ‘the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.’ Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996). The Court applied the two-step test when deciding whether a statute has retroactive application: “First, the Court must ascertain whether the Legislature intended for the statute to apply retroactively. Second, if such an intent is clearly expressed, the Court must determine whether retroactive application would violate any constitutional principles.” Menendez v. Progressive Exp. Ins. Co., 35 So. 3d 873, 877 (Fla. 2010). In analyzing the Legislature’s intent, the Court must determine whether the Legislature has manifested a clear command for retroactivity in the statutory text.  In review of the statutory text, the Court found nothing in the language of the statute to indicate that the phrase “all suits” was serving another purpose of expanding its reach to suits based on policies that both predate and postdate the enactment of the statute. Buis v. Universal Prop. & Cas. Ins. Co., 394 So. 3d 738, 741 (Fla. 2d DCA 2024). Further, the Court noted the statute has an effective date, which has long been considered to be evidence against retroactive application of a statute. The Court concluded that, on its face, no provision of §627.70152 speaks to application of the statute to insurance policies issued before the statute’s effective date and therefore, the Legislature did not clearly command retroactivity of the statute to include insurance policies issued prior to the enactment of the statute. The Court briefly reviewed Universal’s argument that the presuit notice requirement was procedural, not substantive, and therefore should be applied retroactively; however, the Court agreed with the Sixth District Court’s finding that, in its entirety, §627.70152 transformed an insured’s ability to sue an insurance company under a property insurance policy and an insurer’s obligations to respond to and pay insurance claims, thus making the requirement a substantive change. The Court thereby upheld the decision of the Sixth District and disapproved the decision of the Fourth District in Cole.

Event

CLM 2026 Focus Conference

Allison joins three insurance industry leaders to discuss how cyber coverage disputes, the growing impact of social inflation on bodily injury claim valuation, and the use of artificial intelligence are reshaping the bad faith landscape. The panel will examine emerging sources of extra-contractual exposure, including evolving cyber insurance coverage issues and the challenges of accurately valuing bodily injury claims. Practical approaches to claim evaluation using AI, along with defense strategies designed to help prevent or successfully defend against bad faith litigation, will also be addressed. 

Thought Leadership

New Jersey Appellate Division Affirms Recreational Immunity for County Under Landowners' Liability Act

In a recent unpublished decision in Matthew Kuzma, etc. v. Middlesex County Parks Department, et al., the New Jersey Appellate Division affirmed summary judgment in favor of Middlesex County Parks Department, holding that the county was immune from liability under New Jersey's Landowners' Liability Act (LLA), notwithstanding its failure to plead the immunity as an affirmative defense in its answer to the Complaint. The case arose from injuries sustained by fourteen-year-old plaintiff, Matthew Kuzma, while playing basketball at Spring Lake Park in South Plainfield on August 23, 2019. The plaintiff observed a crack in the basketball court before beginning to play but did not consider it dangerous. During the game, his foot became caught in the crack, causing him to fall and suffer a significant ankle injury. The plaintiff alleged that the injury resulted in ongoing physical limitations and deprived him of the opportunity to play collegiate basketball. The plaintiff filed suit alleging that the defendants negligently maintained the basketball court. Although the county did not assert LLA immunity as an affirmative defense in its answers, it later moved for summary judgment on that basis. The plaintiff opposed the motion, arguing that the county had waived the defense by failing to plead it. The county maintained that the plaintiff had received sufficient notice of its intent to rely on the LLA through discovery and therefore suffered no unfair surprise or prejudice. The trial court agreed and granted summary judgment, concluding that the county should be permitted to invoke statutory immunity notwithstanding its failure to formally plead the defense. Relying heavily on the New Jersey Supreme Court's guidance in Arias v. Cnty. of Bergen, holding a county park was subject to the immunity of the LLA, the Appellate Division affirmed, holding that the county's failure to plead LLA immunity did not preclude reliance on the defense under the circumstances presented. The court determined that the plaintiff had received adequate notice of the immunity claim through discovery and that permitting the defense furthered the public-policy objectives embodied in the LLA. In affirming dismissal, the Appellate Division acknowledged the seriousness of the plaintiff's injury and the general societal interest in maintaining parks and recreational facilities in a safe condition. However, the court emphasized that both the legislature and the New Jersey Supreme Court have expressed a clear policy choice to limit liability for public and private landowners who make recreational property available for public use. The decision reinforces the courts' continuing adherence to the Landowners' Liability Act and the principle that recreational lands and facilities should be broadly protected from liability exposure, even in cases involving significant personal injuries.

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Result

Summary Judgment Obtained in Insurance Coverage Case

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Defense Victory Obtained in Workers’ Compensation Case

Complete Victory Obtained in a Workers’ Compensation Matter

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Complete Victory Obtained in a Workers’ Compensation Matter

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Marshall Dennehey Announces 2027 New Jersey Super Lawyers And Rising Stars