A recent ruling from a Philadelphia judge has delivered a pretty clear message to Penn State in an ongoing venue dispute the university is having with its insurer: If you’re going to litigate, do so in Philadelphia.
The protracted venue battle is tied to litigation over coverage claims stemming from lawsuits related to the Jerry Sandusky sex-abuse scandal and Philadelphia Court of Common Pleas Judge Gary S. Glazer’s ruling is the fourth adverse ruling the university has received on the issue of venue. (The list includes a decision from the Pennsylvania Superior Court.)
Penn State and the insurer, Pennsylvania Manufacturers’ Association Insurance Co., have been in court since January of last year after the first civil suit naming the university was filed by an accuser of Sandusky, the former Penn State assistant football coach and convicted serial child molester at the center of the scandal.
The litigation is over PMA’s responsibility to provide coverage for Penn State’s court costs and damages related to that claim. PMA, one of the university’s general liability carriers for decades, first filed suit in Philadelphia in January of last year seeking to limit coverage; Penn State has twice filed cases in Centre County, alleging breach of contract and other claims.
Though it is not an injunction, Glazer’s order April 11 appears to be its functional equivalent.
"If the parties file any additional coverage actions involving similar underlying claims against [Penn State] they shall file them in Philadelphia County," Glazer said in a footnote to the order.
The ruling follows a motion from PMA in which the insurer again asked the court to coordinate the cases (its action and those of Penn State) in the First Judicial District.
At the time, PMA had also asked the court to grant sanctions against Penn State, claiming the university was engaging in frivolous litigation and delay tactics and acting in disregard of court orders. PMA asked the court to force Penn State to pay its legal fees and costs in connection with legal work on the venue dispute after the Superior Court had already ruled in PMA’s favor.
While Glazer said in the footnote that PMA’s argument was "interesting," the judge denied the motion for sanctions and urged the parties to focus on the merits of the case and not on "collateral issues."
A short timeline of the case, leading up to two recent motions from PMA, reads as follows:
PMA initiated litigation in Philadelphia in January of last year seeking to limit coverage. Penn State followed by filing its own action in Centre County against PMA, alleging breach of contract and other claims and asking that a Centre County jury hear all issues triable by a jury. PMA then moved to coordinate the actions, asserting the two cases involved the same issues. Two Philadelphia judges issued separate orders on the issue in April of last year, both in favor of PMA.
First, in a two-paragraph order, Judge Arnold L. New granted PMA’s request to coordinate and transfer the Penn State lawsuit to Philadelphia to eschew what he called the "unavoidable risk" of the courts issuing contradictory decisions in the two cases.
Then, Glazer issued an order denying Penn State’s motion to transfer proceedings to Centre County.
It was New’s initial order that Penn State appealed to the Superior Court.
Between Penn State’s filing of the appeal and the Superior Court’s eventual ruling in PMA’s favor, a Philadelphia judge rejected an effort by PMA to amend its complaint to add an additional accuser — "John Doe C" — reasoning that to do so, ostensibly for a host of accusers, could stall the insurance case for years.
The Superior Court then rejected Penn State’s appeal, holding the lower court did not abuse its discretion. In its February 21 ruling, the three-judge panel agreed with the trial court that pursuant to Rule 213.1, Philadelphia was a "fair and efficient" venue. Meanwhile, last week, an attorney for the university said Penn State has a petition pending with the Superior Court to have its appeal reconsidered by an en banc panel of the court.
After losing before the three-judge panel, Penn State filed a second action in Centre County alleging the same claims as its first case. But the new lawsuit encompassed the claims and coverage issues related to another 30 claimants who have contacted the university, at least according to the lawsuit, claiming it is liable for the abuse they allege they encountered at Sandusky’s hands.
PMA, according to its recent court filings, wrote a letter to Penn State after the case was filed requesting that Penn State pull the second action filed in Centre County by March 13. The university, according to PMA’s motion for sanctions and the prothonotary’s office, refused.
On March 14, PMA filed the motion for sanctions and asked the court to coordinate and transfer Penn State’s case.
Last week, Glazer ruled to coordinate and transfer the proceedings but declined to hit Penn State with sanctions.
PMA’s attorney, Steven Engelmyer of Philadelphia firm Kleinbard Bell & Brecker, said Glazer’s order appears to put the finishing touches on the venue battle.
"We are pleased that the court’s order once and for all determines that Philadelphia is the appropriate venue for this coverage dispute," Engelmyer said.
That is, of course, unless Penn State appeals.
Reached for comment, one of Penn State’s coverage attorneys could not comment on whether the university would be appealing Glazer’s April 11 order.
Jerold Oshinsky, of Jenner & Block in Los Angeles, did say the court properly denied PMA’s motion for sanctions.
"We thought the motion for sanctions was ill-founded and we’re delighted it was denied," Oshinsky said. "As far as other issues are concerned, we have to discuss them with our client."