Tagged: Products Liability

Pennsylvania Supreme Court Protects Due Process Rights and Rejects “Jurisdiction by Consent”

On December 22, 2021, a unanimous Pennsylvania Supreme Court held in Robert Mallory v. Norfolk Southern Railway Company that a foreign corporation is not subject to personal jurisdiction in the Commonwealth of Pennsylvania solely because of its registration to do business there. The Mallory decision is an affirmation of the due process rights of non-Pennsylvania corporate defendants and significantly impacts who can permissibly be sued in the Commonwealth. Mallory, a resident of the Commonwealth of Virginia, filed suit in Pennsylvania seeking damages under the Federal Employers’ Liability Act against his former employer, Norfolk Southern, a Virginia corporation, for injuries allegedly sustained in the course of the plaintiff’s work in Virginia and Ohio. The sole basis for the exercise of personal jurisdiction was Norfolk Southern’s registration to do business in the Commonwealth of Pennsylvania. Pennsylvania’s business registration statute is unique in that the statute conditions registration upon a corporation’s “consent” to personal jurisdiction in Pennsylvania courts. Before Mallory, Pennsylvania state courts and many of Pennsylvania’s federal courts generally permitted the exercise of personal jurisdiction over foreign corporations based solely on their registering to do business in Pennsylvania. The appeal in Mallory required the Pennsylvania Supreme Court to consider whether Pennsylvania’s broad exercise of personal jurisdiction through its corporate registration statute comports with the demands of due...

Third Circuit Holds That Personal Injury Plaintiffs’ “Mere Continuation” Successor Liability Claims Against Purchaser of Bankrupt Debtor’s Assets Belong to Bankruptcy Estate, Not Plaintiffs

In In re Emoral, Inc., the Third Circuit, in a decision of first impression, held that personal injury claims of individuals allegedly harmed by a bankrupt debtor’s products cannot be asserted against the purchaser of the debtor’s assets since they are “generalized claims” which belong to the debtor’s estate and not to the harmed individuals.

Third Circuit Affirms Bankrupt Asbestos Defendants’ Transfer of Insurance Recovery Rights to Personal Injury Trusts Notwithstanding Insurance Policies’ Anti-Assignment Provisions

The U.S. Court of Appeals for the Third Circuit, in its May 1, 2012, decision in In re: Federal-Mogul Global, Inc. held that asbestos defendants who file Chapter 11 petitions and seek to resolve their asbestos-related liabilities through the creation of a personal injury trust under Section 524(g) of the Bankruptcy Code may transfer their rights under their liability insurance policies to the trust notwithstanding the policies’ anti-assignment provisions.

Ninth Circuit Reverses Itself, Withdraws Opinion Which Held that Magnuson-Moss Warranty Act Prohibits Mandatory Arbitration in Warranties

As reported in an earlier post in September 2011, the Ninth Circuit in Kolev v. EuroMotors West/The Auto Gallery held that the Magnuson Moss Warranty Act (“MMWA”) “precludes enforcement of pre-dispute agreements . . . that require mandatory binding arbitration of consumer warranty claims.” The Ninth Circuit’s ruling would have prohibited manufacturers and distributors of consumer products from attempting to take advantage of the Supreme Court’s recent pro-arbitration rulings, including AT&T Mobility v. Concepcion, involving MMWA consumer warranty claims. According to the original majority opinion in Kolev, to the extent the MMWA precludes arbitration clauses, class waivers in such clauses, which Concepcion rendered immune from invalidation under state laws, would thus likewise be unenforceable in MMWA actions, providing a complete end-run around Concepcion.

Lack of Standing and Choice-of-Law Rules Doom Nationwide Consumer Fraud Class Action Against BMW

On October 31, 2011, in Nirmul v. BMW, the District Court for the District of New Jersey dismissed a nationwide class action against BMW asserting claims under the New Jersey Consumer Fraud Act (“NJ CFA”), concluding, essentially, that none of the three plaintiffs had a standing to sue. The complaint alleged that the high pressure fuel pump in BMW’s N54 turbo engines had a known defect and that BMW failed to disclose this fact to purchasers throughout the country.

Ninth Circuit Rules that Magnuson-Moss Warranty Act Prohibits Mandatory Arbitration in Warranties, Creating a Circuit Split

The Ninth Circuit in Kolev v. EuroMotors West/The Auto Gallery held that The Magnuson Moss Warranty Act (“MMWA”) “precludes enforcement of pre-dispute agreements . . . that require mandatory binding arbitration of consumer warranty claims.” The Ninth Circuit’s ruling would essentially prohibit manufacturers and distributors of consumer products from attempting to take advantage of the Supreme Court’s recent pro-arbitration rulings, including AT&T Mobility v. Concepcion, involving MMWA consumer warranty claims. Thus, to the extent the MMWA precludes arbitration clauses, class waivers in such clauses, which Concepcion rendered immune from invalidation under state laws, would thus likewise be unenforceable in MMWA actions, providing a complete end-run around Concepcion.