Melmark, Inc. v. Schutt, No. 78 MAP 2017, ___ A.3d ___, 2019 Pa. LEXIS 2367 (Apr. 26, 2019)

New life breathed into choice-of-law analysis: Travel from there to Pennsylvania for the events at issue gives Pennsylvania the greater interest in the application of its law.

New Jersey residents placed their disabled adult son at a residential care facility located in Pennsylvania. Costs were borne by the local New Jersey school district in which the parents lived, but when the son attained age 21, the source of funding switched from the school district to a New Jersey state agency. The agency directed the parents to move their son to a facility in New Jersey, but they refused, and an administrative process began. Eventually, the son was moved to a New Jersey facility, but for two years he remained at the Pennsylvania facility, which was not paid either by the parents or the New Jersey state agency. The facility filed suit to collect for almost $200,000 in unpaid residential services, under a Pennsylvania statute. The Supreme Court identified a conflict between New Jersey law and Pennsylvania law: New Jersey would exempt the parents from payment based on their age, whereas Pennsylvania would not, based on their means. Under a choice-of-law analysis, the Court noted that Pennsylvania has a connection to the facility, whereas New Jersey has a connection to the parents. However, the principal deciding factor was the travel into Pennsylvania and provision of services there. Without denying New Jersey’s great interest in protecting its citizens, the Supreme Court held that the Pennsylvania facility should not be put in jeopardy of incurring increased costs because of non-payment by visitors from a different state, whose regulatory scheme would exempt them from payment. The Court noted especially the New Jersey agency’s efforts to house the son in New Jersey, which was opposed by the parents.

While the facts involve the sympathetic plight of parents facing substantial costs for necessary treatment of their disabled child, this case provides a helpful analysis of choice-of-law principles applicable generally in many cases. If events bring out-of-staters to Pennsylvania, there is a basis to apply Pennsylvania law. And at the same time, if events bring Pennsylvanians out-of-state, there is a basis to argue that other state’s laws should be applied.


Case Law Alerts, 3rd Quarter, July 2019

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