Benn v. Linden Crane Company, Civ. A. No. 70-542.

• Decision Date: 28 December 1973
• Docket Number: Civ. A. No. 70-542.
• Citation: 370 F. Supp. 1269
• Parties: Clifford BENN v. LINDEN CRANE COMPANY, et al.
• Court: U.S. District Court — Eastern District of Pennsylvania

370 F. Supp. 1269

Clifford BENN v. LINDEN CRANE COMPANY, et al.

Civ. A. No. 70-542.

United States District Court, E. D. Pennsylvania.

December 28, 1973.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Robert Land, Philadelphia, Pa., for plaintiff.

John H. Lewis, Jr., Philadelphia, Pa., for defendants.

SUPPLEMENTAL OPINION AND ORDER

VanARTSDALEN, District Judge.

On February 22, 1968, plaintiff, Clifford Benn, a Pennsylvania citizen, was injured while working at a construction jobsite in Philadelphia, Pennsylvania. Alleging malfunction of a tower crane as the cause of his injury, plaintiff instituted suit in this district court against several defendants, including Linden-Alimak, the asserted manufacturer of the crane. Linden-Alimak is neither incorporated under the laws of Pennsylvania nor registered to do business in the state. It is a foreign corporation incorporated under the laws of Sweden with its principal place of business in Vasteras, Sweden.

Pursuant to Federal Rule 4(d)(7), (e) and (f) which permits effective service of process beyond the territorial limits of the state in which the district court is held whenever authorized by a statute of the United States or the state in which the district court is held, plaintiff served process on Linden-Alimak under Section 2011, subd. B of the former Pennsylvania "long-arm" statute. Pa. Stat. tit. 15 § 2011, subd. B. Section 2011, subd. B provided for extraterritorial service of process over foreign corporations "doing business" within the state as defined by Section 2011, subd. C. Although this statute was repealed on February 13, 1973, it was in effect on March 12, 1970, the day service of process was first attempted on Linden-Alimak. Linden-Alimak thereafter challenged this service of process alleging that it was not "doing business" within Pennsylvania under the terms of Section 2011, subd. C and, therefore, not amenable to extraterritorial service of process under the "long-arm" provision. On April 30, 1971, this court denied Linden-Alimak's motion to dismiss for lack of personal jurisdiction after a factual finding that Linden-Alimak was "doing business" in the state under Section 2011, subd. C. Benn v. Linden Crane Co., 326 F.Supp. 995 (E.D.Pa.1971). In March, 1973, the Third Circuit delivered the opinion of Gorso v. Bell Equipment Corporation, 476 F.2d 1216 (3d Cir. 1973), which ascribed a narrower jurisdictional scope to Section 2011, subd. C than announced in Benn. In view of that decision, I suggested that Linden-Alimak file a renewed motion to dismiss for lack of jurisdiction. Linden-Alimak did so file and this court, on May 25, 1973, vacated the prior order of April 30, 1971 and granted Linden-Alimak's motion to dismiss.

In the interim, Pennsylvania repealed Section 2011 and enacted a new "long-arm" statute providing for extraterritorial service of process over foreign corporations and nonresident individuals.¹ Pa.Stat. tit. 42 §§ 8301-8311 (Supp. 1973-1974). This new statute went into effect on February 13, 1973. Plaintiff Benn now seeks to secure in personam jurisdiction over the defendant Linden-Alimak by effectuating service under the new statute.² Linden-Alimak contests the propriety of such action and currently moves for dismissal of the complaint for lack of jurisdiction.

In addressing this motion, several issues are raised. In order of treatment they are:

1. Does the new statute govern the validity of the re-service?

2. If so, are the statutory elements satisfied?

3. If so, does the application of the statute in the context of this case violate the Constitutional requisites of due process?

4. If jurisdiction can be extended, is the re-service on Linden-Alimak timely?

1. APPLICABILITY OF THE NEW "LONG-ARM" STATUTE.

In the instant case, the cause of action arose and the complaint was filed prior to the effective date of the new "long-arm" statute. However, the re-service currently challenged was made after that date. This chronological fact places the applicability of the new statute in issue. The question posed is whether the validity of the re-service is governed by Section 2011 of Title 15, the law in effect at the time of the accrual of the cause of action and the filing of the complaint, or Sections 8301-8311 of Title 42, the law in effect at the time re-service was made. In the past, the federal and state courts have consistently judged the validity of service according to the "long-arm" statute in effect at the time service is made. See, e. g., Flaherty v. United Engineers & Constructors, Inc., 191 F.Supp. 661 (E. D.Pa.1961); Myers v. Mooney Aircraft, Inc., 429 Pa. 177, 240 A.2d 505 (1967). Basically the courts have concluded that service of process statutes are only procedural provisions and do not create or affect individual substantive rights. Flaherty, supra, 191 F.Supp. at 663; Myers, supra, 429 Pa. at 182-184, 240 A.2d 505. Consequently, the rule developed that, in the absence of any statutory expression to the contrary, the validity of service was to be governed by the law in effect at the time service is made rather than the law in effect at the time of the accrual of the cause of action or the filing of the complaint. Id. Furthermore, this rule was followed irrespective of whether the law in effect prior to service would have validated or invalidated the service. Flaherty and Myers provide excellent illustrations. In Flaherty, service was permissible under a "long-arm" provision in effect at the time the cause of action arose. Before service was made, however, the provision was deleted. The court refused to apply the former law holding that service statutes are procedural and therefore in the absence of a statutory reservation preserving the former method of service, the validity of service must be assessed solely by the law in effect at the time of service. In Myers, the defendant was not amenable to service of process under the law in existence at the time of the accrual of the cause of action and the filing of the complaint. However, nine days before service was made, the "long-arm" statute was significantly amended and as amended it allowed the service in question. The court held that the validity of service was to be determined according to the amended law as it was the law in effect at the time service was made. With respect to the instant case, the re-service in question was sent to Linden-Alimak by registered mail on July 24, 1973 and received July 31, 1973. The new Pennsylvania "long-arm" statute went into effect February 13, 1973. Based on the background of judicial precedent on this point, I conclude that the new "long-arm" statute is procedural. There being no statutory expression to the contrary, the new statute governs the validity of the re-service in this case as it is the law in effect at the time re-service was made. This result obtains even though service was not authorized under the statute in effect at the time of the accrual of the cause of action and the filing of the complaint.

It should be noted that this holding does not offend the corollary rule enunciated under the former statutes that the law in effect at the time of service continues to control the jurisdictional issue even though subsequent to that service and at the time of decision, a new statute or amendment has been enacted. Gorso, supra, 476 F.2d at 1223, n. 6; McCully-Smith Associates, Inc. v. Armour and Company, 349 F.Supp. 694, 695-696 (W.D.Pa.1972); Nelson v. Doll Furniture Company, 304 F.Supp. 159, 161 (E.D.Pa.1969). In those cases, the focus properly remained on the old law as no attempts were made to re-serve after passage of the new law. After noting that no re-service had been attempted under the new law, the Gorso court stated that "we do not believe that ineffective service under the old statute can be validated merely by the subsequent passage of a new jurisdictional statute with more inclusive provisions." Gorso, supra, In the instant case, however, re-service under the new law has been made and, therefore, that law, not the former, controls the case.

2. STATUTORY COMPLIANCE WITH THE NEW STATUTE.

Linden-Alimak is neither incorporated under the laws of Pennsylvania nor registered to do business in the state. Plaintiff therefore, seeks to serve process pursuant to Section 8302(a) of the new law which provides in pertinent part:

Any foreign corporation which shall have done any business in this Commonwealth without procuring a certificate of authority . . . shall be conclusively presumed to have designated the Department of State . . . to accept, on its behalf, service of process in any action arising within this Commonwealth.

Pa.Stat. tit. 42 § 8302(a) (Supp. 1973-1974) (emphasis added). Essential to this provision is a finding that the defendant has "done business" within the state as that term is defined in Section 8309(a). That section states:

Any of the following shall constitute "doing business" for the purposes of this chapter:

(1) The doing by any person in this Commonwealth of a series of similar acts for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object.

(2) The doing of a single act in this Commonwealth for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object with the intention of initiating a series of such acts.

(3) The shipping of merchandise directly or indirectly into or through this Commonwealth.

(4) The engaging in any business or profession within this Commonwealth, whether or not such business requires license or approval by the Commonwealth or any of its agencies.

(5) The ownership, use or possession of any real property situate within this Commonwealth.

Pa.Stat. tit. 42 § 8309(a) (Supp.1973-1974).

Since this court previously held that Linden-Alimak was not "doing business" under the terms of Section 2011, subd. C, the predecessor of Section 8309(a) under the old foreign corporation "long-arm" statute, a...