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December 11th, 2023
In Hangey v. Husqvarna Professional Products, Inc., No. 14 EAP 2022, (Pa. Nov. 22, 2023), the Supreme Court Pennsylvania affirmed the decision of the Superior Court, which determined that the trial court abused its discretion in transferring venue from Philadelphia County to Bucks County solely because only .0005% of the defendant’s total revenue was derived from that county.
In 2016, Hangey purchased a Husqvarna riding lawnmower in Bucks County. While Mr. Hangey was operating the lawnmower on his property in Wayne County, he was thrown off the mower. The mower proceeded to roll over Mr. Hangey’s legs while its blades continued to move at a high speed. Mr. Hangey suffered severe and catastrophic injuries to both of his legs. Hangey filed a civil action complaint against Husqvarna Professional Products, Inc., et al. (“Husqvarna”) in the Court of Common Pleas of Philadelphia County, alleging negligence, and that the lawnmower was defective and unreasonably dangerous because it lacked appropriate safety features.
Husqvarna filed preliminary objections, arguing venue was improper in Philadelphia County pursuant to Pennsylvania Rule of Civil Procedure 2179(a)(2), which provides:
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(2) the corporation or similar entity regularly conducts business;
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Specifically, Husqvarna argued that it did not regularly conduct business in Philadelphia County because it was not registered to do business in the county, utilized any warehouses or other facilities there, had any addresses or telephone numbers there, owned any real property there, had any employees or officers based there or residing there, or had entered into any contracts with either Philadelphia County or the City of Philadelphia. However, discovery revealed that Husqvarna made approximately $1.4 billion in sales revenue throughout the United States, of which $75,310 came from direct sales in Philadelphia County, amounting to about 0.005% of Husqvarna’s United States sales revenue in 2016.
In analyzing the Supreme Court’s decision in Purcell v. Bryn Mawr Hosp., 579 A.2d 1282 (Pa. 1990), the trial court sustained Husqvarna’s objections, and transferred the matter to Bucks County. In Purcell, the Supreme Court held that courts must perform a “quality-quantity” analysis, i.e., evaluate both the quality and quantity of acts performed by a corporation in the county to determine if it is regularly conducting business there for purposes of Rule 2179(a)(2). According to Purcell, the quality of acts means those directly, furthering or essential to, corporate objects; they do not include incidental acts. Quantity means those acts which are so continuous and sufficient to be general or habitual. The trial court concluded that Husqvarna’s activities satisfied the quality prong by distributing products to two Philadelphia retailers; however, the trial court determined that its activities did not satisfy the quantity prong, i.e., they were de minimis, because only .005% of its revenue came from direct sales in Philadelphia County.
On appeal, the Superior Court determined that the trial court abused its discretion in transferring venue because it based its decision solely on Husqvarna’s percentage of direct sales in Philadelphia County, and because Husqvarna’s annual sales in Philadelphia County were in excess of $75,000, its activities were sufficiently continuous so as to be considered habitual.
In affirming the Superior Court’s decision, the Supreme Court emphasized that for purposes of analyzing Pa. R.C.P. 2179(a)(2), it is the word ‘regularly,’ and not “principally” that is being construed. Accordingly, a company can perform acts “regularly” in the county even though these acts result in a small percentage of its total revenue. Like the Superior Court, the Supreme Court held that the defendant’s percentage of revenue is just one element to be considered in making the venue determination. Courts must also consider whether the defendant has a physical presence in the county, and whether it conducts business in the county on a consistent basis. The Supreme Court also determined that the defendant’s business may be quantified in metrics other than sales, such as hours billed by employees or days open to the public.
The Supreme Court’s opinion in Hangey v. Husqvarna Professional Products, Inc., No. 14 EAP 2022, (Pa. Nov. 22, 2023) can be accessed here.
