Williams, J. v. OAO Severstal v. Tri-State Safety ( 2019 )


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  • J-A02021-18
    NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
    JOHN WILLIAMS, AN                     :   IN THE SUPERIOR COURT OF
    INCAPACITATED PERSON, BY              :        PENNSYLVANIA
    BRANDY WILLIAMS, GUARDIAN (AD         :
    LITEM); JOHN WILLIAMS, BRANDY         :
    WILLIAMS                              :
    :
    :
    v.                       :
    :   No. 938 WDA 2017
    :
    OAO SEVERSTAL, SEVERSTAL              :
    RESOURCES, PBS COALS, INC; MINE       :
    SAFETY APPLIANCES COMPANY             :
    :
    :
    v.                       :
    :
    :
    TRI-STATE SAFETY TRAINING             :
    SERVICES                              :
    :
    APPEAL OF: OAO SEVERSTAL              :
    Appeal from the Order May 31, 2017
    In the Court of Common Pleas of Westmoreland County Civil Division at
    No(s): 1396 of 2014
    BEFORE: BOWES, J., OLSON, J., and KUNSELMAN, J.
    CONCURRING MEMORANDUM BY KUNSELMAN, J.:
    FILED OCTOBER 03, 2019
    In this negligence and loss-of-consortium case, two Pennsylvanians,
    John and Brandy Williams (husband and wife), sued three defendants in a
    Pennsylvania trial court. One of the defendants is OAO Severstal, a Russia-
    based corporation. The Williamses accuse Severstal of committing torts and
    violating federal law in this Commonwealth. In its preliminary objections
    J-A02021-18
    (“POs”), Severstal alleged no new facts casting doubt upon the Williamses’
    accusations.      Thus, Severstal’s POs created no genuine issue of fact
    necessitating an evidentiary inquiry by the trial court. That court therefore
    could have, and in my view should have, summarily overruled Severstal’s
    jurisdictional PO.
    The sovereign right of Pennsylvania to protect its citizenry from harm
    that foreign actors commit on Pennsylvania soil is beyond question. Thus, the
    trial court was ultimately correct in overruling the POs, and I concur with Judge
    Bowes to affirm that order, albeit on different grounds.
    I.    Allegations in the Complaint & Preliminary Objections
    In their complaint, the Williamses allege that Severstal committed both
    nonfeasance and malfeasance in Pennsylvania and those acts or omissions
    harmed the Williamses in Pennsylvania. See Complaint at 4-5. According to
    the complaint, the negligence of Severstal and other defendants, as well as
    their violations of the United States Mine Safety and Health Act,1 caused a
    catastrophic injury to Mr. Williams, when he fell over 40 feet from a coal bin
    he was helping to build at a coal mine. Id. at 5-9, 14-15.
    The Williamses assert Severstal and its Pennsylvania-based subsidiary
    (PBS Coals, Inc.) both owed Mr. Williams “all of those duties due an invitee
    including, but not limited to, the duty to provide a safe premise and to inspect
    for any potentially dangerous condition” at the mine in Somerset County. Id.
    ____________________________________________
    1   
    30 U.S.C. §§ 811-966
    .
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    at 5. Severstal allegedly breached the standard of care under our law of torts,
    by and through its employees, agents, and/or servants, which include its
    subsidiary, PBS Coals, Inc., another defendant in this lawsuit. See 
    id.
     at 12-
    14. This included (1) failing to provide a safe work environment, (2) failing
    to supervise the work location, (3) failing to provide adequate fall-prevention
    equipment, and (4) “negligently requiring Mr. Williams to anchor” his safety
    harness at his “foot level instead of above the point of operation.” 
    Id. at 14
    .
    All of these violations of common law and federal law allegedly occurred within
    the territorial confines of this Commonwealth.
    The injuries Mr. Williams suffered left him incapacitated and deprived
    Mrs. Williams “of the care, comfort, society, and services of her husband.” 
    Id. at 19
    . These injuries, their financial impact, and the pain and suffering they
    caused have – per the complaint – damaged the Williamses in Pennsylvania
    and will continue to inflict harm in Pennsylvania for the foreseeable future.
    See 
    id. at 18-19
    .
    Severstal “is a Russian-conglomerate-mining company with assets in a
    number of countries around the world, including Russia and the United
    States.” 
    Id. at 1
    ; see also Severstal’s POs at 4. Severstal filed POs to the
    Williamses’ complaint.2
    ____________________________________________
    2 The first PO challenged the Williamses’ service of process. The trial court
    sustained that PO but granted the Williamses 90 days to perfect service. The
    parties agree that that issue has since been resolved.
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    The PO at issue here alleged that the trial courts lacked in personam
    jurisdiction over Severstal, as a foreign corporation.    Without argument or
    explanation, Severstal unilaterally declared it had “supported its jurisdictional
    objection,” so that “the burden shift[ed] to the [Williamses] to prove that there
    is statutory and constitutional support for the trial court’s exercise of in
    personam jurisdiction.’” Severstal’s POs at 7 (quoting Efford v. The Jockey
    Club, 
    796 A.2d 370
    , 373 (Pa. Super. 2002)).
    Olga Khokhlova, the Head of Legal Projects Department for Severstal,
    signed a declaration that Severstal attached to its POs. She says Severstal
    has offices in Cherepovets, Russia and Moscow. See Exhibit A of Severstal’s
    POs at 1. She also asserts that Severstal does not directly own or control PBS
    Coals, Inc.   See id. at 2.    Ms. Khokhlova also denies Severstal has any
    employees in this Commonwealth.           However, she fails to contest the
    Williamses’ claim that it has agents working within Pennsylvania through
    which it could vicariously act. See id. Most critically, nowhere in the POs
    does Severstal specifically counter the Williamses’ allegation that it, by and
    through its agents, broke the law in this Commonwealth and harmed them in
    this Commonwealth.
    The trial court ordered discovery on the POs and heard oral argument
    in January of 2017.     Four months later, the trial court overruled the PO
    regarding jurisdiction. It then certified that a substantial question as to its
    jurisdiction existed and thereby authorized this timely, interlocutory appeal.
    II.   Analysis
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    Severstal raises three issues in its appellate brief.
    First, it challenges the long-time, Pennsylvania practice of not requiring
    plaintiffs to plead the existence of in personam jurisdiction in their complaints.
    For the reasons in the lead Memorandum, I agree that this issue lacks merits.
    Severstal’s remaining two issues challenge the trial court’s assertion of
    specific, in personam jurisdiction over it. They are:
    A.    Whether the trial court committed an error of law
    when it denied [Severstal’s PO] to the court’s exercise
    of jurisdiction over it, holding that it had jurisdiction
    under 42 Pa.C.S.A. § 5322.
    B.    Whether the trial court’s holding that it had specific,
    personal jurisdiction under 42 Pa.C.S.A. § 5322 over
    [Severstal] in this personal injury action is
    inconsistent with the Due Process requirements of the
    Fourteenth Amendment.
    Severstal’s Brief at 6. Essentially, both of these issues raise the same question
    – i.e., whether the trial court has in personam jurisdiction over Severstal, as
    a matter of law. I therefore address them simultaneously.
    Severstal contends that “neither the [Williamses] nor the trial court ever
    identified any particular act on the part of [Severstal] that gave rise to the
    cause of action purportedly brought against it, and, as a result, constituted a
    basis for exercising jurisdiction over it.” Id. at 16. That statement disregards
    all of the factual allegations the Williamses levied against Severstal in their
    complaint.
    When reviewing a grant or denial of POs, our scope and standard of
    review is well settled. We “must determine whether it is clear and free from
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    doubt from all the facts pleaded that [plaintiffs] will be unable to prove facts
    legally sufficient to establish jurisdiction . . . . This raises questions of law as
    to which our standard of review is de novo.” Ciamaichelo v. Indep. Blue
    Cross, 
    909 A.2d 1211
    , 1216 n.7 (Pa. 2006). Moreover:
    when deciding a motion to dismiss for lack of personal
    jurisdiction, the court must consider the evidence in the light
    most favorable to the [plaintiff. If] the moving party
    supports its objections to personal jurisdiction, the burden
    of proving personal jurisdiction is upon the party asserting
    it.
    Sulkava v. Glaston Finland Oy, 
    54 A.3d 884
    , 889 (Pa. Super. 2012). Here,
    Severstal presumes it shifted that burden to the Williamses. See Severstal’s
    POs. at 7. I disagree with that presumption.
    Pennsylvania Rule of Civil Procedure 1028 does not require a trial court
    to examine evidence beyond the allegations of a complaint and a jurisdictional
    PO, if the allegations in those two pleadings do not give rise to a disputed
    question of fact. After a party files a jurisdictional PO, the Rule directs, “If an
    issue of fact is raised, the court shall consider evidence by deposition or
    otherwise.” Pa.R.Civ.P. 1028(c)(2) (emphasis added).
    That is a big “if.” As this Court has held, if “neither party presented
    evidence that raised factual issues which required the creation of an
    evidentiary record,” the jurisdictional PO “presented a pure question of law
    [and] there was no need to develop an evidentiary record.”               Nutrition
    Management Services Co. v. Hinchcliff, 
    926 A.2d 531
    , 536 (Pa. Super.
    2007). In that case, a defendant law firm from New York admitted it had
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    made all of the contacts with Pennsylvania that the plaintiff alleged. Thus,
    there was nothing for the trial court to glean by taking evidence. This Court
    concluded that, based upon the face of the pleadings, “the issue raised by [the
    PO] was whether the allegations in [the plaintiff’s] complaint were legally
    sufficient to sustain specific, personal jurisdiction.” 
    Id.
    Here, as in Nutrition Management, there was nothing for the trial
    court to glean by taking evidence, because none of facts that Severstal
    pleaded in its PO cast doubt upon the jurisdiction-conferring allegations in the
    complaint. Severstal did not deny that it had committed unlawful acts in this
    Commonwealth or that those unlawful acts injured the Williams in this
    Commonwealth. Instead, it simply stated, in a conclusory fashion, that it had
    supported its jurisdictional objections. See Severstal’s PO at 7.
    In fact, the exhibit that Severstal attached to its POs did not even qualify
    as an affidavit, because it was not given under oath or upon affirmation.    See
    Exhibit A of Severstal’s POs at 1.     Therefore, technically Olga Khokhlova’s
    declaration was not evidence at all.        Severstal produced no evidence to
    support its PO, much less sufficient evidence to shift the burden of proof to
    the plaintiffs.
    Even if we treated Ms. Khokhlova’s declaration as an affidavit (which we
    may not), she never denies the fundamental basis for specific jurisdiction that
    rises from the allegations in the Williamses’ complaint – i.e., that Severstal,
    by and through its agents, committed a tort and violated federal law in this
    Commonwealth. The trial court therefore had no need to look beyond the
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    allegations in the Williamses’ complaint and Severstal’s non-denial of those
    allegations in its POs. For we have said a party raising a jurisdictional PO:
    may not sit back and, by the bare allegations as set forth in
    the preliminary objections, place the burden upon the
    plaintiff to negate those allegations. It is only when the
    moving party properly raises the jurisdictional issue that the
    burden of proving jurisdiction is upon the party asserting it.
    If an issue of fact is raised, the court shall take
    evidence by deposition or otherwise.
    Nutrition Management, 
    926 A.2d at 535
     (quoting Schmitt v. Seaspray–
    Sharkline, Inc., 
    531 A.2d 801
     (1987) (emphasis in original).
    As in Nutrition Management, neither party’s pleading raised a genuine
    factual issue as to whether the trial court had specific jurisdiction over the
    Williamses’ allegation against Severstal. Accordingly, the trial court should
    have decided Severstal’s POs on their face, and so should we. Thus, under
    Nutrition Management and Pa.R.Civ.P. 1028(c)(2) I limit my scope of
    review to the operable pleadings:      (1) the Williamses’ complaint and (2)
    Severstal’s POs.
    The Pennsylvania Long-Arm Statute permits a plaintiff to hale into the
    courts of this Commonwealth any foreign defendant who, among other things,
    causes “harm or tortious injury by an act or omission in this
    Commonwealth.”       42 Pa.C.S.A. § 5322(a)(3) (emphasis added).          In this
    case, the Williamses allege precisely that. As explained in my recitation of the
    pleadings above, they assert that:
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    1.     Severstal breached Pennsylvania’s standard of care for common-law
    negligence in this Commonwealth,
    2.     Severstal violated the federal health and safety statutes in this
    Commonwealth, and
    3.     Severstal’s breaches of the common law and violations of statutory
    law directly harmed them in this Commonwealth.
    See Complaint at 1-25.
    As such, this is not a case where the alleged tort and harm manifested
    themselves in another jurisdiction, but the plaintiffs nevertheless elected to
    sue in Pennsylvania. See, e.g., Hammons v. Ethicon, Inc., 
    190 A.3d 1248
    (Pa. Super. 2018), allowance of appeal granted, 
    206 A.3d 495
     (Pa. 2019)
    (involving a products-liability claim that accrued in Indiana, where a
    surgeon implanted defective virginal mesh into an Indiana resident; she
    sued the New Jersey-based manufacturer in Pennsylvania, even though
    no harm befell her here). Severstal’s other 20+ contacts with Pennsylvania,
    upon which the trial court based its assertion of specific jurisdiction and which
    my learned colleagues find insufficient, I find irrelevant.
    Severstal’s unlawful conduct, if it occurred at all, occurred in this
    Commonwealth. If 42 Pa.C.S.A. § 5322(a)(3) requires anything more before
    our courts may assert in personam jurisdiction over a non-resident tortfeasor,
    I cannot conceive of it. Moreover, Severstal has not argued otherwise. It
    does not maintain (much less convince me) that Section 5322(a)(3) is
    inoperative.
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    Thus, I conclude that the complaint, in conjunction with Severstal’s POs,
    establishes the trial court has specific, statutory, in personam jurisdiction to
    adjudge whether, by or through its agents, Severstal unlawfully harmed the
    Williamses   in   Pennsylvania.    Severstal’s   argument    against   statutory
    jurisdiction discounts the plain language of Section 5322(a)(3) and overlooks
    the well-pleaded allegations of the complaint. Nothing in the PO undermines
    the complaint’s primary allegation that an out-of-state corporation sent its
    agents into Pennsylvania and unlawfully harmed the Williamses in
    Pennsylvania. Therefore, I conclude that our Long-Arm Statute permits in
    personam jurisdiction over that corporate entity in Pennsylvania, specifically
    to adjudicate the Williamses’ accusations.
    Severstal’s Fourteenth Amendment argument is equally unpersuasive.
    Severstal claims Pennsylvania’s exercise of in personam jurisdiction over it
    would “deprive [it] of . . . property, without due process of law.” U.S. Const.
    Amend. XIV.
    The Williamses alleged Severstal enjoyed the privilege of conducting a
    mining operation in Pennsylvania and those activities illegally injured them in
    Pennsylvania.     In the United States, it has long been held that, when “a
    corporation exercises the privilege of conducting activities within a state, it
    enjoys the benefits and protection of the laws of that state. The exercise of
    that privilege may give rise to obligations; and, so far as those obligations
    arise out of or are connected with the activities within the state, a procedure
    which requires the corporation to respond to a suit brought to enforce them
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    can, in most instances, hardly be said to be undue.” International Shoe Co.
    v. Washington, 
    326 U.S. 310
    , 319, (1945).
    Here, the complaint asserts Severstal, by and through its agents, was
    present in this Commonwealth for the privilege of mining and using its coal.
    As a part of that mining operation, the common law of torts and a federal
    statutory scheme imposed certain obligations upon Severstal and its agents
    to act reasonably and comply with Congress’s law. If the allegations in the
    Williamses’ complaint prove true, Severstal was under legal obligations to
    protect Mr. Williams from harm while an invitee at their mine and to follow the
    federal law. According to the complaint, Severstal failed in both respects. If
    the Williamses produce evidence in discovery supporting their allegations,
    then in this Commonwealth’s assertion of specific, in personam jurisdiction
    over Severstal can “hardly be said to be undue.” 
    Id.
    If, on the other hand, the Williamses produce no evidence linking
    Severstal to acts or omissions in this Commonwealth, then dismissal of
    Severstal will be appropriate at summary judgment.3        Only then would it
    become clear and free from doubt that specific, in personam jurisdiction over
    Severstal is lacking, because Severstal would have, as a matter of law, caused
    no harm in this Commonwealth.
    ____________________________________________
    3 Additionally, if the Williamses produce only some or questionable evidence,
    dismissal may eventually be appropriate at trial by compulsory nonsuit or a
    jury verdict in favor of Severstal.
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    If Severstal’s agents harmed the Williamses here, then a court may
    constitutionally assert specific, in personam jurisdiction to redress that harm
    here. In other words, the alleged, minimum contacts between Severstal and
    this Commonwealth, under International Shoe, are the alleged acts and
    omissions that gave rise to this cause of action. Nothing in Severstal’s POs
    counters that basic premise of the Williamses’ lawsuit.
    Indeed, if Severstal’s agents entered this Commonwealth, broke its law,
    and injured its citizens, no State or Nation is better suited to redress the
    Williamses’ injuries than Pennsylvania, the locus delicti.4       Severstal cannot
    complain if its tort victims summon it before the courts of the very State where
    it allegedly wronged them. Compare Walsh v. Chez, 
    418 F. Supp. 2d 781
    (W.D. Pa. 2006) (finding specific jurisdiction in Pennsylvania over an Illinois
    doctor constitutionally permissible, when a malpractice claim centered upon
    doctor’s altering of a prescription by phone while the plaintiff was in
    Pennsylvania) with Mendel v. Williams, 
    53 A.3d 810
     (Pa. Super. 2012)
    (finding no constitutional basis for jurisdiction over a New Jersey doctor and
    hospital, when the malpractice claim centered on allegedly negligent
    treatment in New Jersey).            Asserting Pennsylvania’s judicial power over
    unlawful conduct in Pennsylvania, that allegedly harms a plaintiff in
    Pennsylvania, comports with “traditional notions of fair play and substantial
    justice.” International Shoe, 
    326 U.S. at 316
    . Severstal cannot claim unfair
    ____________________________________________
    4   Latin, literally translating “the location of the offense.”
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    surprise that someone would summon it before the courts of this
    Commonwealth to answer the allegation that its agents unlawfully harmed two
    citizens of this Commonwealth in this Commonwealth.
    The Fourteenth Amendment’s Due Process Clause does not override 42
    Pa.C.S.A. § 5322(a)(3) as I apply it to the pleadings at bar. Hence, I agree
    with Judge Bowes – Severstal’s jurisdictional claim has no merit at this
    juncture.
    I concur in the result to affirm the order overruling the jurisdictional
    preliminary objection.
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