A dispute between Penn State and the university's general liability insurer, stemming from the Jerry Sandusky sex-abuse scandal, will play out in the Philadelphia Court of Common Pleas, the state Superior Court has ruled, against the school's wishes.
Pennsylvania Manufacturers' Association Insurance Co., the university's insurer, sued Penn State in Philadelphia in early 2012, seeking a declaratory judgment that would limit defense costs and indemnity for which the university could claim coverage in a civil lawsuit filed by an accuser of Sandusky, the convicted serial child molester and former Penn State assistant football coach.
Penn State followed with its own legal action in the Centre County Court of Common Pleas, alleging PMA breached its contract with the school and acted in bad faith by both initially denying coverage, and then following with a lawsuit. It asked for a Centre County jury to decide all matters triable by jury.
A venue dispute ensued, and PMA moved to coordinate and transfer Penn State's lawsuit to Philadelphia. Penn State lost at the trial level on two occasions.
With its Feb. 21 ruling, a unanimous, three-judge panel agreed with the trial court, which said Philadelphia was a "fair and efficient" venue for Pennsylvania Manufacturers' Association Insurance v. Pennsylvania State University.
The quoted language comes from the 2010 Superior Court case Washington v. FedEx Ground Package System, which Superior Court Judge Anne E. Lazarus said helped dispose of the university's arguments.
In determining venue, court guidelines provide that judges consider the following: whether the common question of fact or law is "predominating and significant to the litigation"; the convenience of the parties, witnesses and attorneys; whether coordination would cause unreasonable delay or expense to a party, or otherwise prejudice a party; efficiency as it relates to judicial facilities and personnel; the perils of duplicative and inconsistent rulings; and the likelihood of settlement if coordination is denied.
Judge Lazarus said the trial court, in finding for PMA, properly "noted that PMA filed its action with the Philadelphia Commerce Court program, which specializes in such actions, and thus would be a more efficient venue than the Centre County courts."
Penn State's main argument was that the trial court did not put enough emphasis on the convenience of its witnesses, which the university said should be the paramount concern.
But Judge Lazarus said the university provided no support for the argument that "convenience" trumps the other elements of the court rules.
She noted the trial court acknowledged it would "present some hardship" for Penn State's witnesses to travel to Philadelphia, but added that the university's counsel, some of whom are from Los Angeles and Chicago, would have an easier time traveling to Philadelphia than to the center of the state.
Having said that, the trial court concluded Philadelphia was not so inconvenient as to warrant coordinating the case in Centre County.
PMA's attorney, Steven Engelmyer of Philadelphia firm Kleinbard Bell & Brecker, said, "We're pleased with the court's decision and look forward to proceeding."
Jerold Oshinsky, a Los Angeles-based Jenner & Block attorney representing the university, said, "We have the opinions, we're studying them and we're considering our options."
Sandusky is serving what is effectively a life sentence after convictions on 45 of 48 counts of sex abuse.