When a fire ignited at the BP Oil Refinery on the Delaware River in Paulsboro, New Jersey, both the Philadelphia and Westville fire departments responded to the emergency.   Allegedly, during the response effort, Philadelphia’s fire boat caused a large wake that inflicted over $140,000 in damage to Westville’s boat.  Westville’s insurance company, Tri-County Municipal Joint Insurance Fund, paid the claim, but advised Philadelphia it intended to subrogate against them.

The city filed a declaratory judgment action against defendants Westville and Tri-County, seeking to be absolved of any liability for the incident.  The defendants asserted that Philadelphia’s claim was invalid because of a lack of personal jurisdiction. To meet the requirements for personal jurisdiction, an out-of-state defendant must conduct a certain amount of business activity in the state in which the suit is brought.  In this case, either the Westville, a New Jersey municipality, or Tri-State, a New Jersey company, must have conducted sufficient business activities in Pennsylvania for the lawsuit to proceed in the Pennsylvania court.

The Pennsylvania trial court found that the company conducted business to a substantial and acceptable degree in Pennsylvania and thus overruled the Defendant’s assertion of lack of personal jurisdiction.  Additionally, the trial court gave immunity to Philadelphia from all insurance and subrogation claims related to the boat incident.  The Defendants appealed, contending once again that the trial court erred in finding personal jurisdiction for the out-of-state participants.

On appeal, the Court found that Westville’s fire boats patrolled the New Jersey side of the Delaware River without crossing into Pennsylvania waters.  Furthermore, Tri-County only conducted business in New Jersey and provided insurance coverage exclusively to New Jersey municipalities.  Philadelphia argued that Westville’s boats might have at one point crossed over into Pennsylvania and that Tri-County transmitted correspondence regarding the incident to Philadelphia. However, the Court found those activities were not sufficient to confer either general or specific personal jurisdiction over the non-resident defendants.

Therefore, the Court dismissed the case for lack of personal jurisdiction and Philadelphia’s immunity to insurance or subrogation claims for the boat incident was negated.

Thanks to Coleen Hill for her contribution to this post.  For more information, please write to Mike Bono.