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Philadelphia Court of Common Pleas and the Supreme Court of Pennsylvania

The reigning No. 1 Judicial Hellhole®, the Philadelphia Court of Common Pleas & Supreme Court of Pennsylvania once again lands near the top of the list in 2021. Its drop to the No. 4 spot is not due to reforms or progress made in the state, but indicative of the number of issues plaguing California, New York and Georgia. Additionally, shutdowns resulting from the COVID-19 pandemic led to a decrease in activity.

The Philadelphia Court of Common Pleas continues to be a preferred court for pharmaceutical mass torts cases and asbestos litigation. Plaintiffs from across the country flock to the Court of Common Pleas because of its reputation for excessive verdicts and its “open door” policy to out-of-state plaintiffs. This policy clogs the courts, drains court resources, and drives businesses (and jobs) out of the state.

The Supreme Court of Pennsylvania joined the Court of Common Pleas atop the list in 2020, and the Court continues to expand liability for businesses and municipalities across the state.

   

PHILADELPHIA COMPLEX LITIGATION CENTER IS MASS TORTS HOTSPOT

The Philadelphia Court of Common Pleas Complex Litigation Center is the plaintiffs’ bar’s preferred jurisdiction for mass tort litigation specifically targeting pharmaceutical and medical device companies.

Risperdal Litigation

In May 2021, the U.S. Supreme Court announced it would not review a $70 million verdict against Janssen Pharmaceuticals in favor of a Tennessee plaintiff in the Philadelphia Court of Common Pleas. The Philadelphia Court of Common Pleas found Janssen Pharmaceuticals liable for not adding warnings about specific risks associated with the antipsychotic drug Risperdal when used off-label to treat autism in adolescent patients. The Pennsylvania Supreme Court had also refused to consider the appeal.

The massive verdict, which was upheld by an intermediate Pennsylvania appellate court, disregards the fact that federal law prevents companies from unilaterally making changes to product labels once they are approved by the Food and Drug Administration (FDA), including warning of risks of off-label use. State courts should not then hold liable product manufacturers who merely follow federal law. If state courts are permitted to second guess the FDA, the agency’s authority and expertise will be severely undercut. This potentially adds fifty layers of regulatory uncertainty for companies that operate nationwide.

The staggering $70 million award was for the plaintiff’s compensatory damages. The plaintiff’s lawyers will seek millions more in punitive damages.

There are more than 7,000 Risperdal cases currently pending in the Philadelphia Court of Common Pleas Complex Litigation Center. Outsized verdicts like these reinforce the court’s “open door” policy and encourage plaintiffs’ lawyers across the country to flock to the court. Decisions such as these benefit out-of- state plaintiffs to the detriment of Pennsylvania citizens. The increased litigation clogs the courts and wastes taxpayer dollars.

The case also serves as an important reminder of why it is so important for states to pass civil justice reforms to rein in activist courts. The United States Supreme Court grants certiorari in less than 2% of cases and it is dangerous to rely on the high court to police the decisions of state courts.

Paraquat Litigation

The plaintiffs’ bar’s next self-proclaimed target in Pennsylvania courts is Paraquat, one of the most widely used herbicides. Multiple complaints have been filed in Pennsylvania, and according to Jeffrey P. Goodman, partner at Saltz Mongeluzzi & Bendesky, P.C., “These [paraquat] filings are only the tip of the iceberg with what is expected to be the next major mass tort.”

Asbestos Litigation

Philadelphia remains in the Top 4 most popular jurisdictions to file lawsuits claiming injuries from exposure to asbestos. There were 209 asbestos lawsuits filed in Philadelphia in 2020. In total, there were over 600 asbestos cases pending in the Philadelphia Court of Common Pleas as of November 2021.

The high volume of filings follows the Pennsylvania Supreme Court’s 2020 Roverano decision on the application of Pennsylvania’s Fair Share Act to strict liability asbestos actions. The court nullified the “Fair Share” approach, which is intended to allocate a damage award to each defendant in proportion to its level of fault for the plaintiff’s injury. Instead, the Court ruled that liability would be apportioned equally among responsible parties. Using mental gymnastics, the Court said it is impossible to apportion a strict liability claim based on fault because strict liability is not fault-based, despite numerous courts around the country having found ways to do just that. The impact of course is that minor players may be required to pay dam- ages that are disproportionate to their responsibility for an injury – contrary to the basic premise of fair share liability. The Court accepted the plaintiffs’ contention that illnesses caused by asbestos inhalation are “incapable of being apportioned in a rational manner because the individual contributions to the plaintiff’s total dose of asbestos are impossible to determine.” In dicta, the Roverano decision “also appears to point to an abrogation of the rule against ‘each and every fiber’ as a theory of causation.”

In Roverano, the court also ruled that the Fair Share Act permits bankrupt entities to be listed on the verdict sheet, but only if the trusts have been joined as third-party defendants or entered into a release with the plaintiff. Thus, a plaintiff can easily evade having most bankrupt entities, which may be those who are primarily responsible for a plaintiff’s exposure, appear on the verdict form by simply delaying the filing of any available asbestos bankruptcy trust claims until after trial. Unlike many other states, Pennsylvania has not enacted asbestos bankruptcy trust transparency legislation to require plaintiffs to file their asbestos trust claims before trial.

Good News

Although the deck is stacked against them in Philadelphia, juries sometimes reject inflammatory claims that are unsupported by science. This occurred when a Philadelphia Court of Common Pleas jury found that using Johnson & Johnson’s signature talcum powder did not cause a plaintiff to develop ovarian cancer. The plaintiff, who used Johnson & Johnson’s product for three decades, argued that the company was responsible for her cancer because it was aware of the risks associated with its product since the 1940s. The jury sided with Johnson & Johnson, which emphasized other factors that could have caused Klein’s cancer, such as genetic factors. “Despite the lack of any scientific evidence to support their claims, the plaintiff trial bar continues to push forward with its misinformation campaign to drive baseless and inflammatory headlines in the hopes they can force a resolution of these cases,” Johnson & Johnson explained. “The claims by these lawyers are unfounded and it is clear the only interest they have is their own financial gain.”

LOOSE APPLICATION OF VENUE LAWS LEADS TO FORUM SHOPPING

Pennsylvania judges have made a habit of swinging open the courtroom doors to out-of-state plaintiffs. This policy benefits plaintiffs but negatively impacts Pennsylvanians. It clogs courts, drains court resources, and drives businesses out of the state leading to job loss.

At the crux of this issue is the state’s venue rule, which judges have interpreted very liberally. It permits venue in any “county where [a corporate defendant] regularly conducts business,” which allows cases to be filed in Philadelphia even when there is little to no connection between Philadelphia and the incident in question.

In addition, Pennsylvania courts have been slow to apply the U.S. Supreme Court’s 2017 ruling instructing state courts to dismiss cases that have no connection to the state. In Bristol-Myers Squibb Co. v. Superior Court of California (BMS), the Court held that a state cannot exercise personal jurisdiction over a company that is not incorporated or headquartered in that state, when the plaintiffs do not live in the state, and events related to the alleged injury did not occur there.

In October 2020, the Supreme Court of Pennsylvania openly defied the U.S. Supreme Court in Hammons v. Ethicon, which was the state high court’s first opportunity to apply the BMS decision to claims brought by out-of-state plaintiffs in Pennsylvania courts. In this instance, an Indiana resident claimed that Ethicon, a New Jersey company, made a defective pelvic mesh device. The plaintiff did not receive medical treatment in Pennsylvania, and all conduct relevant to her claim took place in Indiana or New Jersey.

The only connection between the parties and Pennsylvania was that Ethicon contracted with a Pennsylvania company, Secant, to provide the mesh and the plaintiffs’ lawyer decided that Philadelphia would be a more favorable place to sue. Doing business with third parties, however, does not automatically subject an out-of-state business to personal jurisdiction where that company is located unless there is a specific connection between the forum and the injury. Nevertheless, the Supreme Court of Pennsylvania ruled that Ethicon’s connection to Secant allowed Pennsylvania courts to assert jurisdiction over Ethicon. Contrary to BMS, the Supreme Court of Pennsylvania viewed it sufficient for a plaintiff to show a tie between the state and the “underlying controversy,” rather than the individual’s claim, for a state court to decide the case.

Following the high court’s lead, courts across the state loosely apply venue laws to allow plaintiffs to forum shop. In March 2021, a Pennsylvania Superior Court held that the percentage of a company’s overall business conducted in a county is only one factor in considering whether venue is proper. Venue may be proper for a company in any county from which it derives significant revenue, regardless of the venue’s connection with the underlying case. In Hangey v. Husqvarna Prof. Products, Inc., the defendant derived only 0.005% of its national sales from Philadelphia dealers, but the Court held that its contacts were sufficient because it had an authorized dealer in Philadelphia that sold $75,310 worth of products.

Court Refuses to Bring Defamation Venue Law into 21st Century

In November 2021, the Pennsylvania Supreme Court ignored calls from lower court judges to appropriately amend venue laws in cases arising from alleged online defamation in response to modern era technology and communication.

The Philadelphia Court of Common Pleas previously permitted a Chester Heights mayoral candidate to sue for defamation in Philadelphia even though she was a resident of Delaware County and the information was aimed at Delaware County residents. The lawsuit alleged the candidate was the victim of a smear campaign and that the defamatory statements were available to Philadelphia residents online.

Judge Arnold New based his ruling on a 1967 case, Gaetano v. Sharon Herald, and held that in a defamation action, “publication” occurs in any county where the statement is read and understood to be defamatory. Applying the law to allow a lawsuit to be filed anywhere in the state is inconsistent with the purpose of a defamation action, which is to restore a person’s name in his or her community. In his opinion, Judge New stressed that his job as a trial court judge is to apply the law, rather than “make new law.” He urged the state’s high court to reevaluate the state’s venue rules related to defamation to change the law to reflect modern communication technology and prevent clear forum shopping by plaintiffs’ lawyers. A request that also was made by Superior Court Judge Mary Murray in her concurring opinion upholding the trial court’s decision. “As technology continues to grow and its application implicates various elements of both criminal and civil law, this court will continue to be presented with novel appeals involving the use of electronic communication, the majority of which will be decided by precedent that never contemplated electronic publication,” wrote Judge Murray.

Unfortunately, their requests largely fell on deaf ears. Under this decision, plaintiffs can bring their cases in any of the multiple counties in which the online publication was viewed. This decision will lead to “unchecked forum shopping” because plaintiffs will be able to choose the most plaintiff-friendly court in which to bring their case.

A Return to Forum Shopping in Medical Liability Cases?

Constraints that have prevented lawyers from picking the most plaintiff-friendly jurisdiction for filing medical liability actions are in jeopardy. The Supreme Court of Pennsylvania is considering easing the court’s 17-year-old restraints on medical liability lawsuits. At issue is a 2002 court rule that required plaintiffs to file medical malpractice lawsuits in the county where treatment occurred, not where a jury might view the claim most favorably. The purpose was to reduce forum shopping and create a more fair and balanced playing field. Forum shopping increases the number of meritless lawsuits and drives up doctors’ insurance costs. It leads to increased costs for patients and reduces patients’ ability to access doctors.

The proposed rule change would allow attorneys to file suit for medical malpractice in jurisdictions not only where medical treatment took place, but also where the healthcare provider operates a hospital or office or where a physician lives, among other options. Of course, the state’s personal injury bar, through the Pennsylvania Association for Justice, supports the change. Plaintiffs will flock to areas like Philadelphia, where juries are more willing to award higher verdicts in favor of plaintiffs.

COMPARATIVE FAULT IN JEOPARDY

Following the Supreme Court of Pennsylvania’s Roverano decision in 2020 that weakened the state’s Fair Share Act with regards to asbestos litigation, a Pennsylvania superior court went a step further and put the future of comparative fault in jeopardy. In a case that originated in the Philadelphia Court of Common Pleas, the court suggested in dicta that the Fair Share Act is only implicated when the plaintiff’s comparative negligence is at issue. In other words, if the plaintiff is not partially at fault for his or her own injury, full joint and several liability applies to the defendants and any one of them may be required to pay the full amount of the damage award.

If followed, the ruling would effectively gut the state’s 2011 Fair Share Act, which was intended to replace joint and several liability with comparative fault. The consequences of this shift would be far- reaching. Rather than permitting a plaintiff to recover the entire judgment from one deep-pocket defendant, the Fair Share Act ensured that each defendant’s liability was proportionate to its level of fault. Prior to the Fair Share Act’s enactment, solvent entities, including small businesses, were often compelled to settle questionable lawsuits to avoid the threat of joint and several liability.

LIABILITY-EXPANDING DECISIONS BY HIGH COURT TARGET BUSINESS

According to a report by the Pennsylvania Coalition for Civil Justice Reform, through early 2021, “the Supreme Court [of Pennsylvania] has handed down 36 decisions since early 2016 that impact the expo- sure of civil litigants to lawsuits. Twenty-six of those decisions have expanded liability, some by blatantly ignoring, reinterpreting, or ‘re-legislating’ statutes passed by the General Assembly and signed into law by the governor. Only ten decisions have upheld or reined in current understandings of the scope of civil liability and damage awards.” This represents a significant sea change in the court’s approach.

Expansive View of “Catch-All” Provision

In February 2021, the Pennsylvania Supreme Court, in a 4-3 decision, held that a plaintiff did not need to prove that a business was fraudulent or negligent in its representation to the plaintiff to succeed on an Unfair Trade Practices and Consumer Protection Law (“CPL”) claim. By removing the requirement of fraud or negligence, the Court removed any requirement that a business intended to mislead the consumer. In doing so, the Court “open[ed] the floodgates to an explosion of litigation by consumers with nothing more than ‘buyer’s remorse.’”

In its amicus brief, ATRA argued that the legislature did not intend for the standard under the CPL to be strict liability and the language of the statute did in fact require a showing of intent to deceive. This strict liability interpretation will have large policy implications. Allowing consumers to easily sue business could have severe ramifications on the state’s economy.

The Court, however, disagreed and found that a plain reading of the statute led to its interpretation. It found that the CPL should be construed broadly to prevent “unscrupulous business practices.” However, as the dissent stated, this interpretation removes protections for “honest businesspeople from incurring unforeseen penalties for statements or acts that no consumer would have been confused or misled by.” Additionally, this new standard imposed by the court makes it easier for consumers to file suits against businesses leading to a rise in litigation costs which will be passed on to consumers. In the end, the court’s decision will significantly harm consumers, businesses, and the Commonwealth.

Municipal Liability Expansion

The Supreme Court of Pennsylvania not only expanded liability for businesses across the state, it also did so for municipalities and local government.

In June 2021, the Supreme Court held that an exculpatory contract, which releases the City of Philadelphia from its mandatory duty of public service, is contrary to public policy and unenforceable. In this case, the plaintiff was injured in a bike crash while participating in a charity ride through Philadelphia. Before the event, the plaintiff signed an agreement, which provided that the City of Philadelphia was not liable for any personal injuries arising out of the event.

The City argued that its duty to ensure public safety stems from the common law, not statutory law, and was therefore waivable via contract, akin to a private property owner hosting a recreational event. It does not concern public policy because the signer voluntarily participates in the non-essential activity. The City emphasized that Pennsylvania courts are highly reluctant to interfere with parties’ freedom of contract on public policy grounds.

The Court disagreed and held that the exculpatory clause was unenforceable because the General Assembly intended to impose liability for negligent acts relating to street hazards and enforcing the contract would jeopardize public health. Because the city’s duty to maintain public streets arose long before the bike ride, the city’s involvement is distinguishable from that of a private host.

In a dissenting opinion, Justice Max Baer argued that the applicable Tort Claims Act does not preclude exculpatory agreements, reasoning that a contractual release of liability is not equivalent to the City confer- ring immunity unto itself. Rather, the release serves as a defense to liability for specific conduct; therefore, “there is no inherent conflict between allowing a local government to be sued and permitting that govern- mental entity to assert a contractual defense in that lawsuit, like any other private litigant.”

In a separate case, the Supreme Court expanded the definition of a “dangerous condition” for the purposes of the real estate exception to sovereign immunity. In Wise v. Huntingdon County Housing Development, the Court held that insufficient outdoor lighting of state property, occurring because of the location on the property of a pole light and a tree blocking that light, constitutes a “dangerous condition” of the property for purposes of the real estate exception to sovereign immunity. The case arose after a person tripped and fell on a sidewalk in the Chestnut Terrace public housing complex.

Supreme Court Recognizes Horizontal Piercing Theory

In Mortimer v. McCool, the Pennsylvania Supreme Court abandoned stare decisis and allowed a plain- tiff to treat affiliated businesses as a single entity. In its amicus brief, the U.S. Chamber of Commerce argued that implementation of the single entity theory would stray from other states and create uncertainty, driving business out of Pennsylvania. “This Court should reject the plaintiff’s invitation to abandon stare decisis by implementing an unworkable rule that contravenes longstanding public policy and would make Pennsylvania a disfavored outlier.” The theory stifles innovation and harms small businesses. According to its brief, “Expanding the scope of veil piercing to businesses that merely have some level of overlapping ownership and then making it easier for litigants to pierce the veil would create disincentives for existing family business to expand or to invest in new business lines.”

Cases To Watch

The Supreme Court of Pennsylvania has been asked whether mere registration to do business in Pennsylvania subjects a foreign corporation to personal jurisdiction in Pennsylvania courts. In Mallory v. Norfolk Southern Railway, the plaintiff alleged that he was exposed to carcinogens in the course of his employment with Norfolk Southern Railway Company, causing him to develop colon cancer. The lower court dismissed the complaint with prejudice for lack of personal jurisdiction over the defendant, a foreign corporation registered in the state.

“The Supreme Court [of Pennsylvania] has handed down 36 decisions since early 2016 that impact the exposure of civil litigants to lawsuits. Twenty-six of those decisions have expanded liability, some by blatantly ignoring, reinterpreting, or ‘re-legislating’ statutes passed by the General Assembly and signed into law by the governor.”
– Pennsylvania Coalition for Civil Justice Reform

LACK OF COVID-19 LIABILITY PROTECTION

Pennsylvania remains one of the few states in the country to not enact COVID-19 liability protections for frontline workers and businesses. Following Governor Tom Wolf’s veto of a COVID-19 liability protection bill because it was “overreaching,” the House passed a COVID-19 safe harbor bill providing temporary liability protection to healthcare providers, businesses, nursing homes, and schools absent gross negligence or intentional misconduct. H.B. 605 has since stalled in committee in the Senate and state leadership lacks the sense of urgency to prioritize this important legislation.

The decision to not implement protections for those on the frontlines could be highly problematic for businesses and health care providers across the state. In the initial stages of COVID-19 litigation, Pennsylvania courts have shown a propensity to expand liability for defendants. The Allegheny Court of Common Pleas became one of the only courts in the country to find that income loss resulting from the spread of COVID-19 is covered under the parties’ insurance agreement, which encompasses “direct physical loss or damage to” property. Although the terms “direct” and “physical” modify both “loss” and “damage,” the court interpreted the disjunctive “or” to signal separate meanings for “loss” and “damage.” The court reasoned that actual harm to property is not necessary because “loss” focuses on deprivation of property, while “damage” focuses on tangible destruction of property. The court concluded that loss of use of Plaintiff’s property resulting from the spread of COVID-19 is covered under the income loss provision of the parties’ insurance contract. Most courts have ruled that actual physical damage to a property is necessary to collect under “business interruption” policies.

In another case, the same court justified liability under the Business Income, Extra Expense, and Civil Authority provisions of the insurance contract based on the same reasoning as above. The court stated, “Even absent any damage to property, the spread of COVID-19 has resulted in a serious public health crisis, which has directly and physically caused the loss of use of property all across the Commonwealth.”

2021 JUDICIAL ELECTIONS

After a heated race for an open seat on the state’s highest court, Republican Commonwealth Court Judge Kevin P. Brobson defeated Democrat Superior Court Judge Maria McLaughlin. Brobson will replace Pennsylvania Supreme Court Justice Thomas Saylor in December when Saylor turns 75, the mandatory retirement age. The court’s political makeup will remain unchanged: two Republicans and five Democrats. Deputy Attorney General Megan Sullivan secured a spot on the Superior Court and the two open Commonwealth Court seats will be filled by Republican Stacy Wallace and Democrat Lori Dumas.

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