It’s not even necessary to be sued anymore. Just an agent for service of process is enough. The case is Branham v. Rohm & Haas Co., ___ A.3d ___, 2011 WL 1366494, slip op. (Pa. Super. April 21, 2011). It all started when Dow Chemical, a Delaware/Michigan corporation, bought Philadelphia-based Rohm & Haas.
Dow couldn’t have had any idea what it was getting into (at least in terms of litigation hassles). If it had, maybe it wouldn’t have put “Dow” signs on the old Rohm & Haas plant – something the Superior Court seemed to find more important (2011 WL 1366494, at *1, *7, *8) than the fact that Dow at all times maintained Rohm & Haas as a separate corporate subsidiary – plaintiffs not even making a contrary claim.
Rohm & Haas was involved in personal injury litigation in Philadelphia concerning vinyl chloride. As is typical, Philadelphia’s pro-plaintiff reputation attracted plaintiffs from all over the country, including plaintiff Branham, who was from Illinois. Utilizing one of the procedures that has earned Philadelphia that reputation, the court ordered consolidated trials right off the bat, with the “first eight actions” to be tried together and Branham’s case designated “lead.” 2011 WL 1366494, at *1.
Probably as a device intended to induce settlement (by increasing the litigation's annoyance factor), plaintiffs went after Rohm & Haas’ new parent, Dow, and demanded discovery into the manner in which Dow conducted its own studies (studies unconnected with Rohm & Haas) about vinyl chloride. Plaintiffs intended to use this discovery to discredit Dow’s studies. Id. (discussing plaintiff’s intent to attack the inclusion/exclusion criteria of Dow’s studies).
Dow was not a party to the Branham litigation, and except through its newly acquired Rohm & Haas subsidiary, it had no facilities in Pennsylvania. Like almost any major manufacturing corporation, however, Dow maintained an agent for service of process in Pennsylvania, as it undoubtedly did in quite a few (if not all) states, because all major corporations get sued in a lot of places fairly frequently.
At first plaintiffs went about out-of-state discovery in the usual, correct way – they sought a commission in Michigan, where Dow was based, and made their demands through the Michigan courts. Trouble was, Dow won. The Michigan courts ruled that Pennsylvania plaintiffs could not demand discovery from a non-party until they exhausted remedies within the Pennsylvania litigation (even though the plaintiff was actually from Illinois):
[T]he [trial] court merely gave some deference to Dow’s legitimate confidentiality concerns and noted that such information was presumably discoverable through the normal course of the Philadelphia County proceedings. It determined that, for those reasons, compelling Dow to disclose such information was not proper unless and until there was a showing that such information was not otherwise available. Significantly, on appeal plaintiff does not argue that any of the information relating to environmental and remediation issues at the Ringwood, Illinois plant has not been discoverable through ordinary procedures in the Pennsylvania litigation.Branham v. Rohm & Haas Co., 2010 WL 935650, at *3 (Mich. App. March 16, 2010). The Michigan courts also held that the plaintiffs could not demand production of burdensome technical information that had the effect of drafting the producer (Dow) as an unpaid technical consultant/expert for the plaintiffs:
[P]laintiff argues that the circuit court erred in its conclusion that the subject subpoena was, in connection with the request for information concerning the carcinogenicity of vinyl chloride, seeking to compel Dow to share its information in order to bolster its expert's expertise or to turn Dow into an unpaid expert. Instead, plaintiff contends she is not seeking to conscript Dow as her expert, but instead merely seeks studies Dow may have conducted about the toxicity of vinyl chloride. We find that to be a distinction without a difference.Id. at *4 (other citations omitted).
A defendant sued over pollution-related issues may not resist disclosure of studies and related such documentation relating to the pollution on the policy ground that such a duty would discourage efforts to investigate and remediate pollution. However, “an expert is one who gives opinion testimony, and not testimony concerning ‘relevant facts,’ “and thus an expert “has a property right in his opinion and cannot be made to divulge it in answer to a subpoena.” Klabunde v. Stanley, 384 Mich. 276, 282, 181 N.W.2d 918 (1970). In this case, Dow is a nonparty to the underlying litigation who is being asked for information relating to cancer risks in general, rather than to the individual circumstances causing the death of plaintiff's decedent. The circuit court’s decision to quash the subpoena in relation to such information pending plaintiff’s attempts to obtain it through less burdensome means did not lie outside the range of principled outcomes, and thus was not an abuse of discretion.
Having litigated and lost in the Michigan courts, plaintiffs chose to ignore the Michigan result, and took a second bite at the Dow apple back in the friendly confines of Philadelphia.
They got what they wanted – here in Philadelphia plaintiffs obtained an order that Dow, a Michigan non-party, provide the demanded discovery, the Michigan courts’ rulings notwithstanding.
Dow appealed. We’re not going into the ins and outs of what’s a properly appealable order, because the merits are bad enough.
The Superior Court of Pennsylvania – an intermediate appellate court that generates statewide binding precedent – held that any non-party corporation can be ordered to give discovery in a Pennsylvania court, as long as any significant part of its overall corporate structure (ignoring the separateness of subsidiaries) is located in Pennsylvania.
To get to that result, first, the court declared that it wasn’t bound by the ins and outs of statutes governing discovery subpoenas. “[N]o statute was needed for the court to issue subpoenas. . . . [A]s a necessary incident to its power to adjudge, a court of justice, within the sphere of its jurisdiction, has inherent power to compel the attendance of witnesses in proceedings before it.” Branham, 2011 WL 1366494, at *5. Statutory limits to out-of-state subpoenas are irrelevant because “no statute is needed for a court to issue a subpoena, which is within the inherent power of a court.” Id. at *7.
Who needs statutes?
Next, the court declared that it wasn’t bound (nor very impressed) by all the federal, Pennsylvania trial court, and out-of-state precedent that Dow had amassed in support of its position. These “purported authorities” were non-binding, and the court “disregard[ed] Dow’s argumentation that is not supported by pertinent, controlling Pennsylvania authority” – "authority" that, of course, does not exist. 2011 WL 1366494, at *6.
Appellant further argues that case law supports its contention that subpoena power is not co-extensive with general personal jurisdiction. As previously noted, Appellant cites cases from other jurisdictions, including Mississippi, Louisiana, Oklahoma, and North Carolina, to conclude that “based on settled Pennsylvania law” it was not properly served. However, Dow offers no pertinent Pennsylvania authority which actually holds the principles it proposes. FN15Branham, 2011 WL 1366494, at *8 (other footnote distinguishing other Pennsylvania cases omitted). Having rejected all of Dow’s precedent as non-binding, what precedent did the Superior Court rely upon?
FN15. Dow merely states it was unable to find any appellate cases applying §5301 to non-parties.
[Dow’s] limited choice of Pennsylvania case law is equally problematic. I n the chief Pennsylvania case it cites, Taylor v. Fedra Int'l, Ltd., 828 A.2d 378, 381 (Pa. Super. 2003) this Court found that the defendant . . . which was not qualified as a foreign corporation, nevertheless had sufficient activities to be amenable to suit in Pennsylvania. Id. at 382–83. Dow’s other Pennsylvania cases are no more persuasive of its argument. Dow’s first issue does not merit relief.
None.
That’s right. The Superior Court did not cite a single case – from Pennsylvania or elsewhere – allowing one state's courts to subpoena directly (without going through the other state's courts) material possessed by a non-party in another state.
Who needs precedent?
Thus, the Superior Court found it perfectly OK for a Pennsylvania court to subpoena a non-party’s records in another state whenever the non-party has: (1) a Pennsylvania agent for service of process “within the territorial limits of the Commonwealth,” or (2) “carr[ied] on of a continuous and systematic part of Dow’s general business within this Commonwealth.” 2011 WL 1366494, at *6, 7. The second “continuous and systematic” prong was satisfied by the presence of Dow’s subsidiary, Rohm & Haas:
The installation of a high corporate executive, the erection of prominent signage, and the establishment of ongoing marketing efforts under the Dow brand are not isolated, sporadic acts. The trial court did not abuse its discretion in concluding that they constituted the carrying on of a continuous and systematic part of Dow's general business within this Commonwealth.Id. at *7. Dow's corporate structure - maintaining Rohm & Haas as a separate corporate entity - didn't matter. See id. at *7 n.13 (declining to address “whether the trial court improperly imputed to Dow corporate ‘residence’ in Pennsylvania, based on activities solely attributable to its wholly owned subsidiary, Rohm and Haas”).
And, of course, Branham found no need to respect Michigan law about not drafting non-parties as expert witnesses. “[W]e need not consider the Michigan decisions in our review, particularly on the issue of whether the discovery requested constitutes expert testimony.” 2011 WL 1366494, at *11. After all, it’s only a Michigan resident’s information kept in its ordinary course of business in Michigan. How could Michigan law possibly be relevant? That compilation of the information demanded would take “a witness with technical proficiency” “several hundred hours” to compile doesn’t make it the equivalent of expert testimony under Pennsylvania law (even though the plaintiff is from Illinois). Id. at *12 (relying on no precedent). If a Philadelphia judge says it's not "expert" evidence, then it isn't. Id.
Thus, comity went right out the window, too. The court affirmed an order directing a Michigan non-party to compile and produce material kept in Michigan that the Michigan courts, in a prior proceeding in the same case, had ruled non-producible. The Michigan decision wasn’t good enough for this Pennsylvania court:
Accordingly, we must determine if application of the principle of comity is appropriate in this case, rather than merely invoking it ipso facto. Here, we find that Branham v. Rohm & Hass does not address the majority of issues raised in the instant appeal, and is of dubious reliability on the underlying discovery issues which it does address. For example, on the issue of expert versus factual testimony, in a one paragraph treatment which merely summarizes Branham’s arguments, the court of appeals cites to no authority at all (not even to Michigan decisions), to dismiss Branham’s issue with a curt and conclusory single sentence, “We find that [the contention Branham was seeking Dow studies of vinyl chloride toxicity rather than seeking ‘to conscript Dow as her expert’] to be a distinction without a difference.” Branham v. Rohm and Hass; supra at *5.Branham, 2011 WL 1366494, at *10.
We conclude that on the few issues raised in both the Michigan subpoena and in the instant appeal (expert testimony, burdensomeness), even when not mere dicta, the Michigan decision does not contain the indicia of reliability which are a necessary threshold to our consideration of whether its decision has persuasive value for our review. Dow’s comity argument does not merit relief.
Who needs comity?
Given that the Pennsylvania Superior Court doesn’t even allow its own unpublished opinions to be cited (just try finding them on Lexis or Westlaw) see Superior Court I.O.P. 65.37, it’s peculiar indeed for that court to be criticizing the thoroughness of the decisions of another court that does. The Pennsylvania pot’s a lot blacker than the Michigan kettle.
But Branham isn’t unpublished – unless granted discretionary review by the Pennsylvania Supreme Court, Branham’s going to be binding precedent on every trial court in Pennsylvania. So what do we have?
After Branham, it appears that any corporate non-party – anywhere in the country – is potentially subject to a discovery subpoena directly issuing from a Pennsylvania court if that company either has an agent for service of process in Pennsylvania or has any significant facilities in Pennsylvania, even if those facilities are owned by a separate corporate subsidiary. Not only that, it doesn’t matter if the material in question is not discoverable under that non-party’s home state’s rules. Pennsylvania courts are now free to demand discovery from non-parties, even after their home state’s courts declare the same material non-discoverable. But that won’t happen again. After Branham, who’s going to bother going to the target’s home state?
After all, while all states’ courts are equal, following Branham, Pennsylvania’s courts are more equal than others.