Action by Non-Resident under the Pennsylvania UTPCPL
Danganan v. Guardian Protection Svc., 2016 WL 3977488 (W.D. Pa.), 36 WAP 2017
Issues
- Whether a non–Pennsylvania resident may bring suit under the Pennsylvania Unfair Trade Practices and Consumer ProtectionLaw (UTPCPL), [73 P.S. §§ 201–1 to 201–9.3], against a business headquartered in and operating from Pennsylvania, based on transactions which occurred outside of Pennsylvania?
- If the UTPCPL does not allow a non–Pennsylvania resident to invoke its protections, whether the parties can, through a choice-of-law provision, expand its protectionsto parties to the contract who are non–Pennsylvania resident consumers?
Background
Plaintiff Jobe Danganan initiated an action on behalf of himself and a putative nationwide class of similarly situated individuals against Defendant Guardian Protection Services seeking relief under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-1, et seq. (“UTPCPL”). Danganan, a California resident, claimed he was wrongly billed by Guardian, headquartered in Pennsylvania, under a contract related to his Washington D.C. home. Based on a forum selection clause in the contract – “You agree that this Agreement shall be governed by the laws of Pennsylvania without giving effect to its conflict of laws rules” – Danganan filed the initial action in a state court of common pleas. Slip Op., at 6.
Guardian later removed the case to federal court, and then moved to dismiss the class claims. Guardian argued Plaintiff could not recover under the UTPCPL when, as a non-resident of Pennsylvania, he failed to allege a sufficient nexus between the allegations and the Commonwealth of Pennsylvania.
The district court agreed that for a non-resident of Pennsylvania to be able to recover under the UTPCPL he must allege a “sufficient nexus” with Pennsylvania, and that Plaintiff failed to show such a nexus when he did not have any contacts or transactions with Guardian that related to Pennsylvania. Furthermore, the court found Guardian’s headquarters in Pennsylvania did not form a sufficient nexus, nor did the fact that Guardian’s alleged unlawful conduct (e.g., drafting the “form” agreement and unreasonably interpreting it after cancellation) emanated from Pennsylvania.
The court further found that the choice of law provision in the contract did not expand the protections of the UTPCPL to non-residents. Even assuming that the provision applied beyond breach of contract claims, the court dismissed Plaintiff’s claims, concluding:
The choice of law provision cannot broaden the plain text and explicit scope of the UTPCPL. As noted above, the UTPCPL prohibits “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” 73 P.S. § 201-3. The definition of “trade” and “commerce” is restricted to only apply to conduct which “directly or indirectly affect[s] the people of this Commonwealth.” Id., § 201-2(3). As set forth above, the complaint clearly fails to allege that Plaintiff can be considered a person of this Commonwealth for purposes of the UTPCPL. As such, Plaintiff’s claim under the UTPCPL fails to state a claim under Pennsylvania law.
Id. at 6.
Plaintiff appealed to the Third Circuit, which petitioned the Pennsylvania Supreme Court pursuant to Pa. R.A.P. 3341 to decide questions of state law related to UTPCPL and choice of law contracting provisions.
For more information, contact Kevin McKeon or Dennis Whitaker.