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Court’s Stern Order Ships Philadelphia’s Fire Boat Case Back to Port

James W. Cushing, Esq. on 2/18/2015

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In the recent matter of City of Philadelphia v. Borough of Westville, 93 A.3d 530 (Pa.Cmwlth. 2014) the Commonwealth Court of Pennsylvania weighed in on the application of jurisdictional standards and the Pennsylvania Long Arm Statute on a government entity like the City of Philadelphia.

In 2010 the City's Fire Department responded to a fire at an oil refinery on the New Jersey side of the Delaware River. In order to fight the fire, the Fire Department deployed a fire boat which, while travelling to the fire, caused an especially large wake in the water which damaged another fire boat that was deployed by the Fire Department of the Borough of Westfield, New Jersey.

In order to be compensated for the damage to its fire boat, Westfield submitted an insurance claim against the Philadelphia Fire Department's insurance carrier. In turn, the insurance carrier pursued the City via subrogation for the insurance funds outlaid to Westfield. In response to the subrogation attempt, the City filed for a declaratory judgment in the Philadelphia Court of Common Pleas against Westfield, seeking to absolve it of any liability for the damage to the boat and seeking to enjoin Westfield from seeking property damages from the City on the basis of government immunity. Westfield filed preliminary objections to the City's efforts in the Philadelphia Court of Common Pleas on the basis that a court in Pennsylvania lacks personal jurisdiction over Westfield, which the Court promptly overruled. Subsequently the City filed a motion for judgment on the pleadings against Westfield which was granted by the Court on the basis that the City was immune from such a subrogation matter. Westfield filed an appeal to the Commonwealth Court of Pennsylvania from the Court of Common Pleas' overruling of its preliminary objections, and it is that appeal that is the subject of this article.

In considering the appeal, the Commonwealth Court reviewed the criteria for meeting Pennsylvania jurisdictional standards. The first criterion for jurisdiction is for a party (namely Westfield) to have minimum contacts with the forum in which the court where the action was filed is located. The court may exercise jurisdiction over a non-resident, such as a corporate entity like Westfield, if it engages in continuous and systematic business in the forum. In addition, Pennsylvania's Long Arm statute permits jurisdiction over a non-resident if the non-resident party acts directly, or through an agent, to conduct business in the forum.

The Commonwealth Court ruled that the City, in this matter, failed to establish that Pennsylvania has jurisdiction over Westfield. No evidence was presented to the Court indicating that Westfield's fire boat ever crossed into Pennsylvania waters. The City argued that Westfield assisted with a Pennsylvania fire in 2010, attended a handful of meetings between 2008 and 2010, and could have had a boat wander into Pennsylvania waters from time to time. The Court, upon review, did not view these "contacts" remotely sufficient to trigger Pennsylvania's jurisdiction over Westfield.

Similarly, the Court ruled that Westfield's insurance company's contacts with Pennsylvania were neither continuous nor substantial. Indeed, the Court noted that the insurance company's principal place of business is in New Jersey, conducts all of its business there, and owns no real estate or uses any office space in Pennsylvania. As a result, the Court did not think jurisdiction could be extended through the insurance company's contacts either. In response, the City pointed out that the insurance company has communicated with people in Pennsylvania through telephone calls and letters and its claim administrator has Pennsylvania offices. Despite these contacts presented by the City, the Court remained unmoved in its determination that jurisdiction does not apply.

Based on the above, the Court reversed the lower court's overruling of Westfield's preliminary objections, vacated the Order granting the City's motion for judgment on the pleadings, and dismissed the City's matter in its entirety for lack of jurisdiction.

As this matter explicitly highlights, no matter who the parties are or whether the underlying matter is simple or complex, practitioners must be sure not to overlook the most basic of legal issues, like jurisdiction, when bringing a case.

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