Williams, J. v. OAO Severstal v. Tri-State Safety

• Court: Superior Court of Pennsylvania
• Decided: October 3, 2019
• Docket: 938 WDA 2017
• Status: Unpublished

Opinion

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37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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