In Danganan v. Guardian Protections Services, a unanimous opinion authored by Chief Justice Saylor, the Pennsylvania Supreme Court has overturned the long-held understanding that the Commonwealth’s consumer protection statute, the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) can only be employed by citizens of the Commonwealth. Instead, the Court found that a citizen outside the Commonwealth may use the statute against Pennsylvania businesses for transactions that occurred outside of Pennsylvania. The matter came to the Court by way of a question certified by the United States Court of Appeals for the Third Circuit, focused on the reach of the UTPCPL. Jobe Danganan, a Washington, D.C. resident who moved to California, sued Guardian Protection Services, a Pennsylvania headquartered business, for continuing to bill him through the term of the Agreement for home protection services at his home in D.C., despite his attempts to cancel the contract when he moved to California. The contract used by Guardian to continue to charge Danganan fees had a choice of law provision mandating that the Agreement be governed by the laws of Pennsylvania.
In reaching his conclusion, Chief Justice Saylor focused on the definitions of the terms “person” and “trade and commerce” found within the statute and determined that they did not denote a specific geographic requirement. The UTPCPL generally provides, in pertinent part, that “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce…are…unlawful.” §73 P.S. 201-3. The UTPCPL permits any “person” to bring a private cause of action against another “person” for violation of the statute. 73 P.S. §201-9.2(a). Further, the statute defines “person” as “natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations and any other legal entities.” That term is employed to describe both the alleged victims and purported violators of the statute. 73 P.S. §201-2(2). Further, the terms “trade” and “commerce” are defined within the statute as “the advertising, offering for sale, sale or distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value wherever situate, and includes any trade or commerce directly or indirectly affecting the people of this Commonwealth.” 73 P.S. §201-2(3).
Chief Justice Saylor specifically determined that the clause “directly or indirectly affecting the people of this Commonwealth” did not modify the preceding terms, but rather it was appended to the end of the definition and is preceded by the phrase, “and includes,” indicating an inclusive and broader view of trade and commerce than expressed by the preceding language. In making this determination, Chief Justice Saylor rejected Guardian’s arguments related to the sufficient nexus theory, requiring that the UTPCPL would only apply to non-residents if there was a sufficient nexus between the transaction or injury and the forum state, such that the improper conduct substantially and primarily occurred within the Commonwealth. Guardian argued that this would be consistent with the statute’s stated purpose of protecting Pennsylvanians. However, the Court determined that the sufficient nexus test had no textual basis in the language of the UTPCPL, and thus, rejected its application. Accordingly, a non-resident of the Commonwealth may now bring a cause of action under the UTPCPL against a Pennsylvania business based upon out-of-state transactions or conduct.