A peculiar situation has developed in Pennsylvania product liability law. In Berrier v. Simplicity Manufacturing, Inc., 563 F.3d 38 (3d Cir. 2009), the Third Circuit predicted the the Pennsylvania Supreme Court would abandon its peculiar form of hyper-strict strict liability and adopt the negligence-based form of product liability described by the Third Restatement of Torts, We blogged about that, here. One reason that the Berrier court had for taking that step was that the Pennsylvania Supreme Court had accepted this question in a case called Bugosh and would soon rule. The Third Circuit attempted to anticipate Bugosh.
In all fairness to the Third Circuit, it only took this step after attempting to certify Berrier to the Pennsylvania Supreme Court and being rebuffed.
Anyway, as we also reported previously, the Pennsylvania Supreme Court surprised just about everyone, and instead of deciding Bugosh one way or the other, dismissed the appeal as improvidently granted. See Bugosh v. I.U. North America, Inc., 971 A.2d 1228 (Pa. 2009).
Since the Bugosh dismissal left Pennsylvania state law unchanged, that created an unusual situation. Pennsylvania state courts continue using the old hyper-strict liability form of product liability in accordance with older state supreme court precedents, while federal courts, bound by Berrier‘s prediction apply the Third Restatement.
Or does it?
In a display of district court self-help the likes of which we’ve never seen before, some judges have simply opted to ignore that Third Circuit’s Berrier opinion as a “mistake” – even though it’s never been overruled by the Third Circuit itself, and the Bugosh dismissal decided nothing at all, leaving the Third Restatement question open. See Milesco v. Norfolk Southern Corp., 2010 WL 55331, at *3 (M.D. Pa. Jan. 5, 2010) (construing Bugosh dismissal as “clear indication that it intends for the Second RST to apply” even though the dismissal “was not accompanied by any rationale”) (Jones, J.); Durkot v. Tesco Equipment, LLC, 654 F. Supp.2d 295, (Mag. E.D.Pa. 2009) (“the Third Circuit’s prediction as to the Pennsylvania Supreme Court’s adopting the Restatement Third simply did not hold true” therefore Berrier “is invalid”) (Hart, Mag. J.); McGonigal v. Sears Roebuck & Co., 2009 WL 2137210, at *4-5 (Mag. E.D. Pa. July 16, 2009) (essentially ignoring Berrier and deciding to continue with old law until Pennsylvania legislature changes it) (Rice, Mag. J.).
It’s pretty rare for a district court simply to refuse to follow binding circuit precedent as “mistaken” where neither the circuit court nor the state supreme court has so decided. It’s especially cheeky for mere magistrate judges to be declaring a court of appeals decision “invalid” – but there you are.
On the other hand, two other courts have considered the same question and consider themselves bound by Berrier: Hoffman v. Paper Converting Machine Co., ___ F. Supp.2d ___, 2010 WL 845984, at *3 (E.D. Pa. March 3, 2010) (“because the Pennsylvania Supreme Court decision in Bugosh was merely a procedural dismissal of the matter, the absence of a substantive decision renders the Third Circuit’s decision in Berrier binding precedent”) (Tucker, J.); Richetta v. Stanley Fastening Systems, 661 F. Supp.2d 500, 507 (E.D. Pa. 2009) (“As Bugosh was a procedural decision on the appropriateness of the appeal, the Court cannot infer that Berrier ‘s prediction that a majority of the Justices of the Pennsylvania Supreme Court would adopt the Third Restatement is now invalid. The true reasoning behind the Pennsylvania Supreme Court’s decision in Bugosh cannot be known, and this Court will not engage in speculation.”) (Golden, J.).
Our view – other than it’s a mess? We think that it’s not the business of a lower court to decide that an appellate court is “mistaken.” That’s not within the lower court’s job description, and more importantly it’s an invitation to chaos. A lower court, when being of such an opinion, should follow the appellate decision, but state its reasons for disagreeing, and if necessary certify the question for immediate appeal. As another recent Eastern District of Pennsylvania decision has held:
When this Court sits in its diversity jurisdiction and applies Pennsylvania law, it is not bound by the decisions of lower Pennsylvania courts when the Third Circuit has predicted that the Pennsylvania Supreme Court will decide an issue differently. See Mansman v. Tuman, 970 F.Supp. 389, 402 (E.D. Pa. 1997) (“The Third Circuit’s interpretation of Pennsylvania law is binding on the district court ….”); Cohen v. Am. Int’l Ins. Co., Civ. A. No. 95-5243,1996 WL 103793, at *3 (E.D.Pa. March 7, 1996) (“The Third Circuit’s prediction of how Pennsylvania’s highest court will rule carries authority independent of intermediate state courts’ decisions.”). . . . [T]his Court is obliged to follow Third Circuit precedent even when it conflicts with decisions of lower Pennsylvania courts.
Stein v. Fenestra America, L.L.C., 2010 WL 816346, at *5 (E.D. Pa. March 9, 2010) (emphasis added).
Moreover, because Bexis was actually involved in Berrier – representing amicus PLAC – we know something about Berrier that none of these courts have picked up on. After Bugosh was dismissed by the Pennsylvania Supreme Court, the loser in Berrier went back to the Third Circuit and asked it specifically to recall the Berrier mandate and reconsider the decision in light of this subsequent development. The Third Circuit declined to do so. Here’s a copy of the Berrier order declining to recall the mandate in light of Bugosh. Thus, contrary to what some decisions seem to assume, the Berrier court itself had a chance to say that its prediction was a mistake in light of the Bugosh dismissal – and it declined that opportunity.