In 2018, plaintiffs Thomas and Linda Knox, residents of Pennsylvania, paid $32,688 to book a cruise operated by Seven Seas Cruises, d/b/a Regent Seven Seas Cruises ("Regent"). The cruise was scheduled for March 14, 2020 through March 30, 2020.

On March 7, 2020, due to the Covid-19 pandemic, the plaintiffs cancelled their booking. Regent offered the plaintiffs a future cruise credit of $32,688.

Regent ultimately cancelled the cruise on March 13, 2020 and offered all passengers affected by the cancellation the option of a cash refund or a future cruise credit in the amount of 125 percent of the passenger's booking. The plaintiffs requested a cash refund for their booking, but Regent denied the request because they cancelled their booking before Regent's March 13 decision.

The plaintiffs then filed a Complaint against Regent in the Court of Common Pleas of Philadelphia County. Regent timely filed preliminary objections (i.e., moved to dismiss) raising four issues, including the issue of personal jurisdiction. The court sustained the objection.

The court found that it lacked general personal jurisdiction because Regent is a Panamanian corporation with its principal place of business in Florida.

The court also found that although Regent "purposefully directed its activities" at Pennsylvania by advertising there, including sending solicitations to the plaintiffs that led them to book the March 2020 cruise, it lacked specific personal jurisdiction because the litigation did not arise out of or relate to Regent's activities in Pennsylvania. In reaching its decision, the court cited to the U.S. Supreme Court's recent Ford decision, noting that "[n]ot every relationship between a forum state and a foreign defendant will permit the exercise of specific jurisdiction." Instead, the court determined that "specific jurisdiction over a foreign defendant that had purposefully availed itself of the forum-state's laws, [only lies where] the injury-causing incident also occurred in the forum state."

The court found that Regent's decision to cancel the cruise occurred in Florida. The court further found that the plaintiffs had no basis under the cruise contract to request a full cash refund, and therefore the injury-causing incident was not Regent's denial of the plaintiff's request for a refund. Thus, because the evidence established that the alleged injury-causing decisions did not occur in Pennsylvania, the court concluded it could not exercise specific personal jurisdiction over Regent, and dismissed the action.

The court's decision is a positive development for foreign defendants in Pennsylvania, and more particularly in Philadelphia County, which has a reputation as a plaintiff-friendly jurisdiction. We will continue to monitor this case, as the plaintiffs have appealed the decision to the Pennsylvania Superior Court, where it remains pending for disposition.

Knox v. Seven Seas Cruises, S. De R.L., LLC, No. 525, 2021 Phila. Ct. Com. Pl. LEXIS 36 (C.P. Phila. Aug. 10, 2021).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.