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Important Recent Decision Regarding Personal Jurisdiction Over Foreign Companies – Litigation, Mediation and Arbitration


United States: Important recent decision concerning personal jurisdiction over foreign companies

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In the recent Philadelphia County Court of Common Pleas case, Knox v. Seven Seas Cruises, No. 525, Aug. 2020 (CP Phila. Co. Aug. 21, 2021 New, J.), the trial court issued an opinion under Rule 1925 asking the Superior Court to affirm the decision of the trial court to dismiss the case for lack of personal jurisdiction. The case involved a claim for damages against an international cruise line over a canceled cruise due to the Covid pandemic. The cruise in question was to embark in San Diego and disembark in Miami.

The plaintiffs sued in Philadelphia County, claiming that the Pennsylvania trial court had specific jurisdiction because the financial damages the plaintiffs allegedly suffered related to the Panamanian cruise line’s contacts in Pennsylvania, specifically , the cruise line’s solicitation of plaintiffs’ business and that of other Pennsylvania residents. After the timely filing of preliminary objections arguing the issue of personal jurisdiction, the court held that while the defendant cruise line had admittedly and directly solicited business from residents of Pennsylvania, including the plaintiffs themselves, the court had no specific personal jurisdiction over this foreign company. because the alleged incident causing injury involving the defendant did not occur in the Commonwealth of Pennsylvania and, as such, the defendant’s “affiliations within the state [were] not continuous and systematic enough to make [it] essentially at home in the forum state”. Goodyear v. Dunlop Tires Operations, SA v. Brown, 564 US 915, 131 S.Ct. 2846 (2011).

Moreover, despite the plaintiffs’ residence in Pennsylvania—coupled with the defendant’s direct solicitation of business in Pennsylvania—this was not sufficient to confer personal jurisdiction over the defendant. Thus, the trial court asked the Superior Court to confirm its decision on appeal. Provided the trial court’s decision is upheld on appeal, this case will provide an important precedent for foreign corporations being sued in the plaintiff-friendly venue of Philadelphia County, to prevent inappropriate forum shopping and ensure that general personal competence is effectively established.

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