Recently, in Troseth v. Carson Helicopters Holdings Co., 2024 WL 4444001 (Pa. Super. Ct. Oct. 8, 2024), the Pennsylvania Superior Court reversed the lower court verdict, in which the judge overruled the defendants’ preliminary objections challenging venue in Philadelphia County. Troseth thus confirms that venue must be determined by a defendant’s own activities, rather than its contractual relationship with a Phildelphia-based company or its subsidiary, when determining the appropriate venue in which to bring an action.
The plaintiff, Theodore Troseth, sustained injuries when a helicopter crashed in Afghanistan due to its rotor blades separating. The helicopter had been leased by the defendant, Heligroup Fire (“HF”), a Montana corporation, and refurbished by another defendant, Carson Helicopters Holdings Co. (“Carson”), a Delaware corporation with its principal place of business in Bucks County, Pennsylvania. The plaintiff filed suit in Philadelphia County asserting that both defendants regularly conducted business there. Both defendants filed preliminary objections challenging venue. The trial court overruled the preliminary objections, finding venue in Philadelphia County to be proper.
The defendants appealed. Carson argued that the trial court erred by overruling its preliminary objections to venue in Philadelphia County because its business activities in Philadelphia County were insufficient to establish venue. HF argued that the trial court erred in overruling its preliminary objection to venue in Philadelphia County because the plaintiff showed absolutely no business contacts between HF and Philadelphia County, and the courts sole basis for asserting venue was proper depended on the courts conclusion that venue was proper as to Carson.
The Superior Court of Pennsylvania reversed. The court agreed with the defendants’ arguments, citing several precedential decisions. First, the Court noted that venue is determined at the time the case is filed, not at the time of the transaction or occurrence. Hausmann v. Bernd, 271 A.3d 486, 493 (Pa. Super. Ct. 2022). Next, the court confirmed that “in evaluating whether a company regularly conducts business in the forum county under rule 2179(a)(2), courts are to perform the quality-quantity analysis first articulated in Shambe v. Delaware & Hudson R.R. Co., 135 A. 755 (Pa. 1927):
The business engaged in must be sufficient in quantity and quality. The term “quality of acts” means those directly furthering, or essential to, corporate objects; they do not include incidental acts. By “quantity of acts” is meant those which are so continuous and sufficient to be termed general or habitual. A single act is not enough. Each case must depend on its own facts.”
Hangey v. Husqvarna Pro. Prod., Inc., 304 A.3d 1120, 1142 (Pa. 2023). The Hangey court also emphasized that regularly meant “performed within the context of the particular business.”
Furthermore, the Court here applied the test it has in prior cases, concluding that “incidental acts like purchasing supplies in the forum county or utilizing its court system to enforce its legal rights in other matters do not support venue where the defendant has no physical presence in that county. Purcell v. Bryn Mawr Hosp., 579 A.2d 1282 (Pa. 1990); Fritz v. Glen Mills Sch., 840 A.2d 1021, 1023–24 (Pa. Super. Ct. 2003).
Here, the Court asserts that, although Carson had a business contract with a Philadelphia business, the corporations only engaged in one transaction together during the year the lawsuit was filed. Next, the Court held that Carson’s business dealings with this Philadelphia business did not constitute “actual business” in Philadelphia County for venue purposes, as Carson never went into Philadelphia to conduct business, but rather made purchases from a Philadelphia company to use in conducting business elsewhere. Thus, the Court concluded that venue was not proper in Philadelphia County as to Carson based on these tenuous business connections.
Furthermore, the Court concluded that venue was not proper in Philadelphia County as to HF. The Court agreed with HF stating that “although a parent and a wholly-owned subsidiary share common goals, they are still recognized as separate and distinct legal entities” and there is no case law holding” that a corporation may be subject to venue based solely upon the business activities of a sister corporation in the jurisdiction in question.” Wimble v. Parx Casino & Greenwood Gaming & Entm’t, Inc., 40 A.3d 174, 178–79 (Pa. Super. Ct. 2012).
The Troseth decision can be found here.
For additional questions, please contact Conrad James Benedetto, Esq. and/or Molly S. Hecht, Esq.
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