PENNSYLVANIA: PHILADELPHIA & SURROUNDS: An Introduction to Litigation: General Commercial
Pennsylvania Litigation Trends to Watch in 2025
Pennsylvania courts produced larger verdicts in 2024 than 2023, continuing a trend that has existed since the beginning of the COVID pandemic. In Philadelphia alone, juries returned 12 verdicts of USD10 million or higher, with most involving product liability or medical malpractice. These growing verdicts continue to show jurors’ anti-corporate sentiment, and a willingness to punish corporations and award significant amounts to sympathetic individuals. Two of the 12 eight-figure-plus verdicts that came out of Philadelphia in 2024 have been met with successful post-trial challenges from defendants. In one case, a judge reduced a USD2.25 billion Roundup verdict to USD404 million, and in the other, a judge ordered a new trial in a medical malpractice case where a jury had awarded USD45 million against a hospital. On the other hand, the Pennsylvania Superior Court recently upheld a USD177.3 million judgment in the first Roundup case to go to trial in the state, detailed below.
The Pennsylvania courts continue to see a high level of activity in biotech and pharmaceutical litigation. The generic pharmaceutical pricing antitrust litigation continues in the Eastern District of Pennsylvania (although some states’ attorneys general were permitted to refile in their home states), while over 350 weight loss drug side effects cases, including Ozempic and Mounjaro product liability litigation, have been consolidated in EDPA multidistrict litigation. In August, the University of Pennsylvania sued BioNTech in federal court for allegedly withholding royalties on Penn’s patented COVID-19 vaccine technology used by BioNTech and Pfizer, although that case appeared to have settled by year end.
The Pennsylvania courts issued several significant rulings in 2024:
Pennsylvania federal and state appeals courts disagree in Monsanto Roundup litigation
Monsanto has seen starkly divided results in the Pennsylvania courts in its defense of the Roundup product liability litigation. Plaintiffs have won verdicts in the Philadelphia Court of Common Pleas of USD177.3 million, USD3.5 million, USD2.25 billion (later reduced to USD404 million) and USD78 million, while Monsanto won defense verdicts in the other three cases.
Monsanto is now appealing the adverse trial court verdicts involving its Roundup product because the plaintiffs have argued that Roundup’s labeling should have included a cancer warning, while Monsanto asserts that federal law bars the plaintiffs’ state-based claims. According to Monsanto, Pennsylvania’s duty to warn is preempted because it imposes different requirements than those imposed by the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). Monsanto has been asserting that the US Environmental Protection Agency (EPA) must preapprove pesticide labels, and including a cancer warning on Roundup’s products would contravene the EPA’s regulations.
In August 2024, the US Court of Appeals for the Third Circuit split with several other circuit courts when it agreed with Monsanto’s argument in Schaffner v Monsanto. The Third Circuit unanimously ruled that federal law expressly preempts the failure-to-warn claim in that case and in all other Roundup cases in Pennsylvania.
With that federal court appellate win in hand, Monsanto made the same argument to the Pennsylvania Superior Court, challenging the USD177.3 million Philadelphia jury verdict in Caranci v Monsanto. The Superior Court did not agree. The Superior Court issued a 40-page precedential opinion unanimously ruling that a Pennsylvania failure-to-warn claim does not impose additional requirements to those laid out in FIFRA. The Superior Court held that the Schaffner court overlooked parts of FIFRA prohibiting companies from selling pesticides that do not contain adequate health warnings.
The Caranci opinion marks the first time a Pennsylvania appeals court has weighed in on a Roundup verdict, and indicates how the court may rule in other cases that are on appeal (including the other winning plaintiff verdicts from the Philadelphia Roundup mass tort litigation of USD3.5 million, USD2.25 billion – later reduced to USD404 million – and USD78 million).
Pennsylvania Supreme Court denies arbitration in partnership dispute under PULPA
The Pennsylvania courts continued their strict interpretation of the Pennsylvania Uniform Limited Partnership Act (PULPA) in shareholder disputes. In MBC Development v Miller, 316 A.3d 51 (Pa. 2024), a limited partner in two limited partnerships made demands on the partnerships under PULPA, asking that they file derivative actions against leadership to enforce their rights relating to certain alleged breaches of their limited partnership agreements and breaches of fiduciary duties, and sought other equitable relief, including an accounting. In response, the limited partnerships appointed a special litigation committee under PULPA to investigate the claims and determine whether it was in the best interests of the limited partnerships to pursue those claims. In its final report, the special litigation committee concluded that the limited partnerships should not pursue any of the claims alleged by the limited partner.
The limited partner then filed a demand for arbitration before the American Arbitration Association, based on provisions in the limited partnership agreements that “any dispute or controversy arising under or in connection with” the agreements “shall be settled exclusively by arbitration.” In response, the limited partnerships and their controlling entities filed a petition to permanently stay arbitration in favor of a Pennsylvania state court adjudication, citing the provisions of PULPA that require any challenge to a special litigation committee’s determination to be subject to jurisdiction of Pennsylvania state courts.
Notwithstanding the limited partnership agreements’ broad arbitration provisions, the Pennsylvania Superior Court held that the parties to those agreements elected that they would be governed by Pennsylvania law, and therefore chose to follow the special litigation committee procedure outlined in PULPA, which took the parties’ dispute outside the scope of the arbitration clause.
The MBC Development decision stands apart from other Pennsylvania appellate rulings that strongly support enforcing arbitration agreements because it was issued in the narrow context of actions brought under PULPA. For parties seeking to avoid the special litigation committee process in the Pennsylvania court, it may be wise to be specific about that carve-out in an arbitration clause.
Pennsylvania Supreme Court to decide enforceability of online arbitration agreements
The Pennsylvania Supreme Court recently agreed to review the Superior Court’s 2023 decision in Chilutti v Uber Technologies, Inc. In Chilutti, a divided panel of the Superior Court (and later the Superior Court en banc) ruled that Uber could not enforce a binding arbitration agreement buried in hyperlinked “terms and conditions.” The majority determined that such provisions, when not clearly communicated, deprive parties of their constitutional right to a jury trial. The Superior Court held that Pennsylvania courts must apply a “stricter burden of proof” when asked to enforce an arbitration agreement in a company’s online terms and conditions.
That Chilutti decision has been the source of a split between Pennsylvania’s state and federal courts. While Pennsylvania’s state courts have been following the Superior Court’s holding, its federal courts have opted not to apply the ruling.
The Pennsylvania common pleas courts have followed the Superior Court, holding that various online arbitration agreements were unenforceable under the Chilutti standard.
At the federal level, however, US district judges in Pennsylvania are disregarding Chilutti. At least three Pennsylvania federal judges have rejected arbitration clause challenges that were based on Chilutti. In April 2024, the Middle District of Pennsylvania upheld an arbitration clause despite determining that it would likely be invalid under Chilutti.
In that case, Deiffenbach v Upgrade, the federal court held that Chilutti runs afoul of the FAA and US Supreme Court precedent by appearing to treat arbitration contracts differently from other contracts. The federal court expressed doubt that the Superior Court’s decision would hold up on appeal, writing that it “appears to run counter to law favoring arbitration that has been recognized by the Pennsylvania Supreme Court and it is therefore not clear that the Pennsylvania Supreme Court will adopt the stricter standard set forth in Chilutti.” In August 2024, the Western District of Pennsylvania came to the same conclusion and enforced the online arbitration clause in Happy v Marlette Funding, writing: “It is not at all clear that the Pennsylvania Supreme Court will uphold the Superior Court’s adoption of a stricter standard.”
The Pennsylvania Supreme Court agreed to review the Chilutti case in August 2024. The parties completed briefing in January 2025, but the case has yet to be scheduled for oral argument.
Pennsylvania Supreme Court permits lost profit damages beyond non-compete period
The Pennsylvania Supreme Court ruled in a February 2024 opinion in Vinculum, Inc. v Goli Technologies, LLC that a plaintiff’s lost profits damages are not limited to the length of a non-compete provision in a consulting agreement.
The consulting agreement between Goli Tech and Vinculum included a non-compete clause, prohibiting Goli Tech from soliciting or conducting business with PennDOT or competing with Vinculum, for one year following the termination of the consulting agreement. The Court of Common Pleas of Bucks County ruled, and the Superior Court affirmed, that Goli Tech breached the non-compete provisions, but limited Vinculum’s damages to one year of lost profits because that was the length of the restrictive covenants. (The issue of injunctive relief was resolved early in the case, when the common pleas court denied a motion for preliminary injunction seeking enforcement of the covenants because monetary damages were calculable.)
On appeal, the Supreme Court held that an “absolute bar” on damages beyond the term of the non-compete provision was inappropriate, unless the contract at issue expressly limits recoverable damages to those incurred during the non-compete period. Accordingly, the court held that Vinculum should be permitted the opportunity to seek and prove all “ordinary, foreseeable, and certain damages that flow from” Goli Tech’s breach, including “future lost profits extending from the non-compete period,” regardless of the length of the non-compete clause (although no relief was granted on this point because the Supreme Court also found that Vinculum had failed to present proof of damages after the one year mark). The court’s refusal to enforce a bright-line bar to such damages is significant, as it allows plaintiffs in restrictive covenant cases to seek compensation that extends beyond the timeframe originally contemplated in the contract.