In honor of the Pennsylvania Supreme Court’s recent grant of an appeal on the Restatement (Second)/Restatement (Third) in Tincher v. Omega-Flex, we are republishing as a guest post a very good article (pre-Tincher, of course) that we recently read on this topic written by Dan Cummins of Foley Comerford & Cummins, who also writes the Tort Talk blog on Pennsylvania tort law issues. Here is Dan’s take on where we stand – or stood before the Supreme Court’s recent action, so here goes….
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As of the writing of this article in January of 2013, confusion is reigning in the Commonwealth of Pennsylvania on the uncertain issue of whether the Restatement (Second) of Torts or the different analysis set forth in the Restatement (Third) of Torts should be utilized in Pennsylvania products liability cases. This uncertainty is the result of an ever-growing split of authority not only between the Pennsylvania state and federal courts, but also among, and even within, the different federal district courts across the Commonwealth.
The situation has now spiraled downward to the point that litigants with cases pending in the Pennsylvania federal court system have to research whether the particular federal district court judge presiding over the case has previously issued a decision on the issue in order to determine which Restatement standard will be applied in that case. While one Pennsylvania federal court judge has politely noted that this area of the law in Pennsylvania is in a “state of flux,” See Sikkelee v. Precision Automotive, Inc., 876 F. Supp. 2d 479, 489 (M.D. Pa. 2012 Jones, J.). another has more aptly described Pennsylvania products liability law as being “a maze of uncertainty.” See Samson v. Crown Equipment, 2:10-CV-0958, 2012 WL 3027989 (W.D. Pa. 2012 Hornak, J.).
Which standard is applied could make or break a case. Although the Restatement (Second) favors strict liability concepts over negligence principles in the products liability context, the Restatement (Third) decreases the impact of concepts such as “intended use” and “intended user” and places a greater emphasis on the negligence principle of “reasonable foreseeability.” All of these changes in the Restatement (Third) arguably shift the balance in favor of manufacturer defendants in personal injury cases based upon allegations that a defective product was the cause of the injury.
As noted below, under the current status of Pennsylvania products liability law, whether the case will be governed by the Restatement (Second) of Torts or the Restatement (Third) of Torts depends upon whether the case is in state or federal court, and if the case is in federal court, the answer may further depend upon which particular federal district court judge is presiding over the case.
The Restatement (Second) of Torts § 402A Standard
It is safe to say that most Pennsylvania lawyers now practicing law now were trained on products liability issues in law school through a detailed study of the parameters of Section 402A of the Restatement (Second) of Torts. This section of the Restatement (Second) of Torts, which first came back into play in 1965, provides, in pertinent part, that “[o]ne who sells any product in a defective condition unreasonably dangerous to the user or consumer” may be held strictly liable to the injured party even if the “seller has exercised all possible care in the preparation and sale of this product.” Restatement (Second) of Torts § 402A (1965).
At the time it was published, Section 402A of the Restatement (Second) of Torts codified a new strict liability cause of action against manufacturers to be considered in addition to the other previously viable causes of action, such as negligence and breach of warranty. Section 402A also expanded the scope of possible liable parties to also include all sellers in the distribution process related to the dissemination of the product to the public at large.
The Pennsylvania Supreme Court has consistently applied Section 402A of the Restatement (Second) of Torts to Pennsylvania products liability cases since its 1966 decision in the case of Webb v.
Zern. See Arthur L. Bugay & Craig L. Bazarsky, The Future of Pennsylvania Products Liability as Applied by Federal and State Courts: Covell v. Bell Sports, Inc. Volume LXXXIII, No. 4 The PA Bar Assoc. Quarterly p. 139, 140 (October 2012) citing Webb v. Zern, 220 A.2d 853 (Pa.).
Under the Restatement (Second) of Torts analysis, manufacturer defendants are held to be strictly liable for any manufacturing defects in their products. With regards to design defect claims, since approximately 1984, the Pennsylvania courts have used a risk-utility analysis to initially determine, as a matter of law, whether a product may be considered by the jury to be defective. Bugay, supra at p. 143 citing with “See” signal Daumbacher v. Mallis, 485 A.2d 423, n. 6 (Pa.Super. 1984) and Surace v. Caterpillar, Inc. 111 F.2d 1039 (3d Cir. 1997).
If the case makes it beyond this threshold finding, the matter will be permitted to proceed to the jury for a determination as to whether a product’s design was defective and the cause of the injury alleged. Id.
The Restatement (Third) of Torts § 2 Standard
The Restatement (Third) of Torts was published in 1998. Id. Under Section 2 of the Restatement (Third) of Torts, recognized product defects that may subject a defendant to liability include manufacturing defects, design defects, and failure to warn defects. Id. [Citations omitted].
In Section 2 of the Restatement (Third) of Torts, the definition of a manufacturing defect is essentially identical to that contained in the Restatement (Second), i.e., strict liability is owed to the injured party for any injuries caused by a manufacturing defect of the product. Id.
However, in contrast to the principles espoused under the Restatement (Second) of Torts, claims asserting a design defect or a failure to warn are to be analyzed with reference to negligence principles and concepts delineated under the Restatement (Third) of Torts. Id.
For example, under design defect cases governed by the Restatement (Third) of Torts, the strict liability analysis is altered by the inclusion of negligence-based principles, including consideration of the viability of a “reasonable alternative design.” Id. citing Restatement (Third) of Torts § 2 (1998). More specifically, the Restatement (Third) of Torts: Products Liability, § 2(b) states, in pertinent part, that a product is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a predecessor in the commercial chain of distribution, and that the omission of the alternative design renders the product not reasonably safe.
Stated otherwise, while the analysis of design defect cases under the Restatement (Second) of Torts focuses on the actual design of the product, the basis for liability under the Restatement (Third) of Torts in this context includes a consideration of the reasonableness of the defendant’s conduct. Bugay supra at p. 144. Essentially, while Restatement (Second) standard focuses on an intended user making an intended use of the product, the Restatement (Third) places the emphasis of the analysis on the foreseeable risks of harm and whether an alternative design could have minimized or eliminated that risk. Hoffman v. Paper Converting Mach. Co., 694 F. Supp. 2d 359, 365 (E.D. Pa. 2010).
Another difference with the Restatement (Third) of Torts in the products liability context is that, under Restatement (Third) analysis, the plaintiff’s own acts or omissions, i.e., contributory negligence, are made an important part of the analysis of whether or not a product should be determined to be defectively designed. Id.
Overall, with the movement away from strict liability towards a more negligence-based analysis in the Restatement (Third) of Torts, it would appear that most defendants in products cases would advocate for the adoption and application of the Restatement (Third) standard. In contrast, most plaintiffs would likely favor the strict liability analysis under the Restatement (Second).
It should be noted, however, that the emphasis in the Restatement (Second) that the plaintiff be an intended user of the product serves to bar any recovery to bystanders injured by a product thereby making the Restatement (Third) a more favorable standard for that particular class of plaintiffs.
Overall, there can be no dispute that, with the substantive differences between the two standards, the decision on which standard should be applied could have a significant impact on the admissibility of evidence and, consequently, the outcome of particular products liability cases.
How The Split of Authority Developed
Pennsylvania courts, up until recently, have consistently followed the doctrine of stare decisis and have applied the Restatement (Second) of Torts analysis in products liability cases since as far back as 1966. However, a recent slew of federal court decisions attempting to predict which Restatement of Torts the Pennsylvania Supreme Court would adopt if presented with the issue again has left this area of the law filled with unfortunate uncertainty and confusion.
These efforts by the federal courts to predict how the Pennsylvania Supreme Court would address the Restatement (Second) versus the Restatement (Third) issue may have been borne out of signals from the Pennsylvania Supreme Court itself that perhaps the time has come to consider Restatement (Third) of Torts products liability standard as the law of the land.
For example, as far back as 2003, Pennsylvania Supreme Court Justice Thomas G. Saylor, in his concurring opinion in the case of Phillips v. Cricket Lighters, 841 A.2d 1000 (Pa. 2003). criticized the “ambiguities and inconsistencies” that had arisen in recent times with the Restatement (Second) analysis and stated that Pennsylvania’s products liability law “demonstrate[d] a compelling need for consideration of reasoned alternatives, such as are reflected in the position of the Third Restatement.” Id. at 1000.
Yet, through at least 2008, the Pennsylvania Superior Court and the Pennsylvania Supreme Court had repeatedly rejected requests for the adoption of the Restatement (Third) analysis in several products liability cases. Bugay supra at p. 146-147 citing with “See” signal DeSantis v. Frick Co.,745 A.2d 624 (Pa. Super. 1999); Phillips v. Cricket Lighters, supra, and with “See also” signal Bugosh v. I.U. N.A., Inc., 942 A.2d 897 (Pa. 2008).
Then in 2008, the Pennsylvania Supreme Court agreed to hear the appeal in the case of Bugosh v. I.U. North America, Inc. to specifically address the issue of whether the Restatement (Third) of Torts should be adopted in the products liability context. 942 A.2d 897 (Pa. 2008). The Superior Court in Bugosh had refused to overrule “established authority” supporting the application of the Restatement (Second) and rejected the defendant’s assertion that the Restatement (Third) should be adopted.
While this issue was pending before the Pennsylvania Supreme Court in Bugosh, but not yet decided, the same issue came before the United States Third Circuit Court of Appeals in the case of Berrier v. Simplicity Manufacturing, Inc. Bugay supra at p. 140 citing Berrier, 563 F.3d 38 (3d Cir. 2009). The Third Circuit Court of Appeals boldly predicted in Berrier that the time had come where the Pennsylvania Supreme Court would indeed adopt the Restatement (Third) of Torts as the new standard to apply in products cases. Berrier, 563 F.3d at 53-54.
However, in June of 2009, the Pennsylvania Supreme Court dismissed the appeal in the Bugosh case as improvidently granted and never reached the issue of whether or not to adopt the Restatement (Third) of Torts. 971 A.2d 1228, 1229 (Pa. 2009). In that decision to dismiss the appeal, Justice Saylor again voiced his desire to adopt the Restatement (Third) in a lengthy and strongly worded dissent. Id. at 1241 (Saylor, J., dissenting).
The prediction by the Third Circuit Court of Appeals in Berrier followed by the dismissal of the appeal in Bugosh created confusion amongst the Pennsylvania federal district court judges who faced the same issue thereafter. Bugay supra at p. 148. After Bugosh, federal district court judges across the Commonwealth of Pennsylvania, with some of them even from the same district court bench, began to diverge on the question of which Restatement to follow.
Then, in its more recent decision in 2011 on the issue in the case of Covell v. Bell Sports, Inc., 651 F.3d 357, 365 (3d Cir. 2011) the Third Circuit again predicted that the Pennsylvania Supreme Court would adopt the Restatement (Third) if squarely faced with the issue. The Third Circuit seemed to stand fast to this position again in a footnote contained in its denial of an appeal in the case of Sikkelee v. Precision Automotive. See 2012 WL 5077571 (3d Cir. 2012). Since the issuance of the Covell decision by the Third Circuit Court of Appeals reiterating this prediction, the lower federal courts have continued to issue conflicting decisions on which Restatement analysis to apply in products cases.
In 2011, the Pennsylvania Supreme Court issued its decision in Schmidt v. Boardman Co., 11 A.3d 924 (Pa. 2011), in which the court acknowledged that “foundational problems” existed in Pennsylvania products liability law based upon the Restatement (Second) of Torts. 11 A.3d at 940–41. However, the court noted that the case before it was not selected to address those “foundational concerns.” Id.
As such, the debate was not concluded in that case.
Yet, a study of the jurisprudence on this issue reveals that, in 2012, the Pennsylvania Supreme Court did have another opportunity to address the issue in the case of Beard v. Johnson & Johnson, Inc., 41 A.3d 823 (Pa. 2012); see also Schmidt v. Boardman Co., 608 Pa. 327, 11 A.3d 924, 941 (Pa. 2011) (“Notwithstanding the Third Circuit’s prediction, however, the present status quo in Pennsylvania entails the continued application of Section 402A of the Restatement Second, subject to the admonition that there should be no further judicial expansions of its scope under current strict liability doctrine.”).
In Beard, the Pennsylvania Supreme Court again chose not to adopt the Restatement (Third) as had been repeatedly predicted by the Pennsylvania federal appellate court. In the Beard decision, Pennsylvania Supreme Court Justice Max Baer clearly stated that “the current law of Pennsylvania … is §402A of the Restatement (Second) of Torts.” Id. at 839; see also Bugay supra at p. 148-149 citing Barnish v. KWI Bldg. Co., 980 A.2d 535 (Pa. 2009), as another example of a case in which the Supreme Court did not criticize the application of the Restatement (Second) analysis to the case presented.
But the Beard decision was not a definitive decision on the issue as it sent out some mixed signals from Justices on Pennsylvania’s highest court. In his majority opinion in Beard, Justice Thomas G. Saylor, joined by Chief Justice Ronald D. Castille along with Justices J. Michael Eakin and Joan Orie Melvin, wrote in a footnote, “It may be cogently argued that risk-utility balancing is more legitimately assigned to a jury,” referring to the approach endorsed by the Restatement (Third) of Torts. 41 A.3d 838, n. 18.
Also, Justice Baer filed a concurring opinion in Beard, which Justices Debra Todd and Seamus P. McCaffery joined, in which he attempted to “distance” himself from what he viewed as Justice Saylor’s rejection of the standard in Section 402A of the Restatement (Second) calling for a risk-utility analysis to be performed by judges. Id. at 839.
As noted in greater detail below, there has developed a split of authority in each of the branches of the federal district courts of Pennsylvania. While some of the federal district court judges have opted to follow the most recent pronouncement on the issue by the Pennsylvania Supreme Court in the Beard case favoring the Restatement (Second) analysis, still other federal court judges believe they are duty bound to follow the contrary Third Circuit’s predictions in the Berrier and Covell decisions as being binding precedent upon them in favor of the application of the Restatement (Third) standards until a subsequent, contrary decision is handed down by a Pennsylvania state appellate court.
The U.S. Federal Court for the Eastern District of Pennsylvania
In a March of 2010 decision in the case of Hoffman v. Paper Converting Mach. Co., 694 F. Supp. 2d 359, 364-65 (E.D. Pa. 2010), Judge Petrese B. Tucker of the Eastern District Federal Court of Pennsylvania, noting that, as of that time, the Pennsylvania Supreme Court had dismissed the appeal in Bugosh without deciding the issue, opted to follow the Third Circuit Court of Appeals reference to the Restatement (Third) in Berrier as “binding precedent.” In so ruling, Judge Tucker cited Richetta v. Stanley, 661 F. Supp.2d 500 (E.D. Pa. 2009 Golden, J.), and Martinez v. Skirmish, U.S.A., Inc., 2009 WL 1437624 (E.D. Pa. 2009 Padova, J.) with approval. The Third Circuit’s prediction on the adoption of the Restatement (Third) was also followed by Judge William H. Yohn, Jr. in Xia Zhao v. Skinner Engine Co., 2:11-CV-07514-WY, 2012 WL 5451817 (E.D. Pa. 2012).
Other judges in the Eastern Federal District of Pennsylvania have come to the contrary decision that Section 402A of the Second Restatement remains the law of Pennsylvania in light of the fact that the Third Circuit’s prediction that the Pennsylvania Supreme Court will adopt the Restatement (Third) as the law of the land has not come to pass. Thompson v. Med-Mizer, Inc., 10-CV-2058, 2011 WL 1085621 (E.D. Pa. 2011 Gardner, J.) (“This court is not required to follow the Third Circuit’s prediction where ‘the state’s highest court issues a decision contradicting that prediction or state intermediate appellate court’s decisions subsequently indicate that prediction has not come to pass.’”), citing Sweitzer v. Oxmaster, Inc., 2010 WL 5257226, at *3–4 (E.D.Pa. 2010 Pratter, J .) and Durkot v. Tesco Equipment, LLC, 654 F.Supp.2d 295, 298–299 (E .D. Pa.2009 Hart, M.J.).
In a more recent decision, Eastern District magistrate judge Henry S. Perkin also referred to the Restatement (Second) analysis in the case of Carpenter v. Shu-Bee’s, Inc., CIV. A. 10-0734, 2012 WL 2740896 (E.D. Pa. 2012 Perkin, M.J.).
It is noted, however, that in an even more recent decision in the above-referenced Eastern District Court decision in Thompson v. Med-Mizer, Inc., 10-CV-2058, 2011 WL 1085621 (E.D. Pa. 2012 Perkin, M.J.), Magistrate Judge Perkin, who took over that case as it came into trial, ruled in favor of applying Restatement (Third) in light of Third Circuit’s more recent Order issued in Sikkelee case advocating that standard.
The U.S. Federal Court for the Western District of Pennsylvania
This split of authority is also evidenced in the Western District of Pennsylvania. Those Pennsylvania Federal Western District Court judges who have presently chosen to follow the Restatement (Second) in products liability cases contrary to the Third Circuit’s analysis include Judge Nora Barry Fischer in Gross v. Stryker, 858 F.Supp.2d 466 (W.D. Pa. 2012), Judge Arthur J. Schwab of the Western
District in both Konold v. Superior International Industries, 2012 WL 5381700 (W.D. Pa. 2012), and Schif v. Hurwitz, 2012 WL 1828035 (W.D. Pa. 2012).
The Western Federal District Court Judges who have chosen to instead apply the Restatement (Third) under the Third Circuit’s predictions in the Berrier and/or Covell decisions include Judge Mark R. Hornak of the cases of Sansom v. Crown Equipment, 2012 WL 3027989 (W.D. Pa. 2012), and Lynn v. Yamaha Golf-Car, 2012 WL 3544774 (W.D. Pa. 2012), along with Judge Donetta W. Ambrose in Zollars v. Troy-Built, 2012 WL 4922689 (W.D. Pa. 2012), and Judge Maurice Cohill Jr. in Spowal v. ITW Food Equipment Group, C.A. 10-187, ECF No. 52 (W.D. Pa. 2012).
The U.S. Federal Court for the Middle District of Pennsylvania
Federal judges in the Middle District of Pennsylvania have also split on the issue of which Restatement should be adopted in products cases. Middle District Judge A. Richard Caputo has repeatedly ruled that, based upon the Covell court’s pronouncement that Berrier remains the controlling formulation of the law for district courts in this Circuit, and given that the Pennsylvania Supreme Court has not issued a decision to the contrary, the Restatement (Third) of Torts should be applied in Pennsylvania Federal Middle District products liability cases as repeatedly predicted by the Third Circuit Court of Appeals. See Vaskas v. Kenworth, 3:10 CV-1024, 2013 WL 101612 (M.D. Pa. 2013 Caputo, J.); Giehl v. Terex Utilities, CIV.A. 3:12-0083, 2012 WL 1183719 (M.D. Pa. 2012 Caputo, J.).
Meanwhile, Judge John E. Jones III of the Middle District issued a contrary decision in the case of Sikkelee v. Precision Automotive, 876 F. Supp.2d 479 (M.D. Pa. 2012), in which he chose to instead follow the Restatement (Second) in products liability cases contrary to the Third Circuit’s predictions. In Sikkelee, Judge Jones respectfully noted that federal district courts are not required to follow predictions by the Third Circuit where that prediction does not appear to have been realized in state court precedent. In the appeal of Judge Jones’ decision in Sikkelee, the Third Circuit again noted in its own en banc decision denying a petition for clarification on the appeal that federal district courts in Pennsylvania should continue to apply the Third Restatement. 2012 WL 5077571 (3d Cir. Oct. 17, 2012) (en banc) citing Covell, supra, and Berrier, supra.
Pennsylvania State Courts
With the law being in a state of flux and the federal court decisions creating a maze of uncertainty, litigants are required to monitor the status of this issue with the Pennsylvania Supreme Court in order to determine how this issue may ultimately play out.
As noted above, the most recent, on-point pronouncement by the Pennsylvania Supreme Court on the Restatement (Second) versus (Third) debate is the court’s decision in Beard v. Johnson
& Johnson, 41 A.3d 823 (Pa. 2012) in which the court reiterated, as it has since 1966, that the standards set forth in § 402A of the Restatement (Second) of Torts are to be applied in Pennsylvania products liability cases.
In its more recent decision in the case of Reott v. Asia Trend, Inc., 55 A.3d 1088 (Pa. 2012), a shorthanded Pennsylvania Supreme Court Justice Joan Orie Melvin was suspended from the court in 2012 to address criminal allegations filed against her pertaining to charges that she used legislative and judicial staff to perform work on her campaign for her seat on the Pennsylvania Supreme Court bench. issued a 5-1 decision recognizing that “highly reckless” conduct is an affirmative defense in products liability cases under which defendants could attempt to avoid liability by showing that a plaintiff’s highly reckless conduct was the sole or superseding cause of the plaintiff’s injuries. In so ruling, the majority, in an opinion written by Justice Max Baer, relied upon Section 402A of the Restatement (Second) of Torts.
Accordingly, the Reott decision can be read as lending further support to the proposition that the Restatement (Second) remains the law of the land in Pennsylvania products cases. However, it should also be noted that Reott was analyzed as a manufacturing defect case and both the Second Restatement and Third Restatement are in agreement that strict liability applies in manufacturing defect cases. The conflict between the two Restatements arguably requires a square decision by the Pennsylvania Supreme Court in a design defect case to finally conclude the matter once and for all.
It is also noted that, as of the writing of this article in January of 2013, the Pennsylvania Supreme Court has granted allocatur to hear the appeal in the case of Lance v. Wyeth, 15 A.3d 429, 430 (Pa. 2011) in which it may have yet another opportunity to squarely address the Restatement (Second) versus (Third) issue. The hope remains that the Wyeth court will tackle and finally resolve the issue once and for all when it announces its decision. A concern in this regard is that the Pennsylvania Supreme Court remains short one Justice on account of Justice Orie Melvin’s current suspension from the bench which could lead to an equally split decision by the Pennsylvania Supreme Court on this all-important issue. A plurality decision in this regard will do little to end the dispute and would unfortunately represent a missed opportunity resolve this debate once and for all.
This article was previously published in the Westlaw Journal: Automotive, Vol. 32, Issue 17 (Feb. 12, 2013) and is reprinted at the link with permission.
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A few comments by Bexis: (1) the Third Restatement is also more pro-plaintiff than Pennsylvania law on the post-sale duty to warn, since the Third Restatement does not require a defect at sale, whereas Pennsylvania law does, DeSantis v. Frick Co., 745 A.2d 624 (Pa. Super. 1999); (2) the Third Circuit should get a little more credit, since in Berrier it first tried to certify the Restatement (Third) question to the Pennsylvania Supreme Court, but had the attempted certification rejected in light of Bugosh, and only after that did it venture to predict Pennsylvania law; and (3) because the Pennsylvania Supreme Court in Hahn v. Richter, 673 A.2d 888 (Pa. 1996), exempted prescription medical products from strict liability altogether, the Restatement question is not before the court in Lance.