Today’s case isn’t drug/device, but it’s something our defense-oriented readers should know about. At the tail end of 2021, the Pennsylvania Commonwealth Court laid this rotten egg: Commonwealth v. Monsanto Co., ___ A.3d ___, 2021 WL 6139209 (Pa. Cmwlth. Dec. 30, 2021) (“CvM”). The Commonwealth Court is a unique Pennsylvania judicial body, mostly devoted to hearing appeals from state governmental bodies, however, it does have original (as opposed to appellate) jurisdiction over certain matters brought by statewide governmental units. CvM was one of those.
In CvM four state agencies, led by the Department of Environmental Resources banded together to sue defendants who, prior to 1977, had manufactured certain chemicals (polychlorinated biphenyls (“PCBs”)) that allegedly had “toxic and environmental persistence.” 2021 WL 6139209, at *1-2. That’s right – CvM is a civil lawsuit over chemicals made 45 or more years ago. That explains why the suit was brought by state agencies − nullum tempus occurrit regi – or “no time runs against the king,” which in the United States, means that the state is not subject to any civil statute of limitations.
But that isn’t, in and of itself, why we’re blogging about CvM. Rather, it is the state’s aggregated use of product liability theories – which cannot be aggregated privately through class actions – as weapons of mass litigation. Instead of using the governmental programs the state is legally obligated to take, or CERCLA, or other existing environmental remedies, CvM permits sweeping use of product liability and similar tort theories involving “widespread contamination” from products sold several decades earlier. Id. at *3. This is not a tort – this is an extra-legislative tax, which Commonwealth agencies seek to impose through the courts, bypassing the legislature altogether.
The state alleges public nuisance, trespass, design defect, failure to warn, negligence, and unjust enrichment. Id. at *4. The defendants moved to dismiss (called “preliminary objections in the nature of a demurrer” in Pennsylvania). Id. at *5. Only trespass, and unjust enrichment – minor theories in most litigation – bit the dust.
First, the defendant challenged the Commonwealth’s ability to pursue “parens patriae” standing, essentially to pursue for itself claims supposedly possessed by Pennsylvania citizens, while simultaneously alleging “damages to Commonwealth property in its proprietary capacity.” 2021 WL 6139209, at *5. CvM had no problem with such mixed representation. That had never happened in Pennsylvania before, but:
Other jurisdictions have afforded states standing in parens patriae to bring common law actions and/or for tort damages against companies that purportedly contaminated the states’ natural resources.
Id. at *8 (finding “persuasive” three federal district courts purporting to apply state law, and a New Hampshire Supreme Court opinion). Not only had the state “sufficiently asserted its own quasi-sovereign interest in preserving its waters, soils, air, fish, wildlife, and the health and well-being of its citizens,” id. at *9, but it could claim standing as a “trustee” under the Environmental Rights Amendment to the Pennsylvania constitution. Id. at *10-11. This was another unprecedented holding. Id. at *10 (“[i]n the absence of Pennsylvania-specific case law, Plaintiffs rely on court decisions from other jurisdictions”).
In addition to unprecedented product liability by parens patriae and the newfound trusteeship, CvM also found that the state could also sue private entities in tort under two Pennsylvania state statutes, the Hazardous Substances Control Act and the Clean Streams Law. Id. at *11. Neither act expressly conveyed such power to sue, but CvM implied causes of action under general enforcement provisions. Id. (citing provisions allowing “other appropriate actions,” actions “to compel compliance,” “orders necessary to enforce,” and to “assess civil penalties”). See Id. at *12 (allowing suit by a state agency despite it being “more of an advocate and less of an enforcer” under its organic statute). Implying a right of action from such general provisions is supposed to be improper. E.g., MERSCORP, Inc. v. Delaware County, 207 A.3d 855, 870 (Pa. 2019). Moreover, “the fact that the agencies’ various enabling statutes offer enforcement options does not necessarily preclude common law actions.” Id. at *14. In sum, CvM found lots of mouseholes in which to hide elephantine civil litigation.
After having labored so mightily to create one of the broadest recognition of implied rights of action we have ever seen, CvM turned to the various causes of action asserted by the state. Here are the results, in a nutshell:
- Public nuisance: A cause of action exists under Restatement (Second) of Torts §821B (1978), and the Clean Streams Law (which authorizes public nuisance declarations). Water pollution is “nuisance per se.” Where a product’s “marketed uses” “inevitably” cause harm the product can expose its manufacturer to public nuisance liability after leaving the manufacturer’s control. Nuisance liability does not require that the “defendants themselves” engaged in polluting activities. 2021 WL 6139209, at *15-20.
- Trespass: Claim failed because the complaint does not allege “an intentional entrance upon land in the possession of another without a privilege to do so.” No “trespassory intent” is pleaded. Id. at *20-21.
- Strict Liability Design Defect: A duty exists to cease further distribution of a product when the manufacturer knows or should know that it is too dangerous to be used by anyone. Nothing in Pennsylvania law prohibits this duty from being owed to the general public. The state is not a “casual bystander.” “[D]umping, spillage, and disposal” can be an actionable intended use of a product. Id. at *21-29. In other words, at least in the environmental context, CvM allows the Commonwealth to seek to ban any product it decides to target.
- Strict Liability Failure To Warn: “A failure to warn includes a continuing duty to warn of dangers of which the manufacturer becomes aware after the product is sold.” The duty to warn “extends . . . to third persons whom the supplier should expect to be endangered” by a product’s use, which in the case of a pollutant can include a “duty to warn the general public.” Id. at *29-33.
- Negligence: Anyone doing an “affirmative act” owes a duty of reasonable care to others to protect them against unreasonable risk of harm arising out of the act. The duty is “not to expose others to risks which are reasonably foreseeable.” Plaintiffs have pleaded “a sufficient relationship” between the defendants’ actions and the state, its citizens and the state’s natural resources such that the defendant manufacturers owed a duty to the state and its citizens as a whole. Id. at *33-36.
- Unjust Enrichment: Claim failed because the complaint does not allege any benefit conferred on the defendant by the plaintiffs. Id. at *36-37.
- Continuing Tort: Violation of a post-sale duty to warn can be a continuing tort. Id. at *37-38.
Not only does CvM permit, on a wholesale basis, the state to pursue a host of novel – at least for a governmental plaintiff – supposedly “common-law” tort claims based on an unprecedented form of statutory standing, it allows expansive damages as well. First CvM disposed of the “municipal cost recovery rule” despite having previously recognized this limitation on governmental recovery. 2021 WL 6139209, at *40. Finding no binding Pennsylvania precedent specifically addressing “environmental damage,” CvM exempted all such claims:
The municipal recovery rule does not expressly prohibit public entities, or a state trustee of natural resources, in particular, from recovering damages for injuries to public resources.
Nor was the state, as a plaintiff, limited to “recovery costs” as provided by the statutes that CvM previously cited as the basis for its standing to sue.
The [statute] does not expressly limit damages to only natural resources belonging to the Commonwealth but, rather, appears to authorize damages for natural resources that the Commonwealth and/or the federal government and/or any local governments manage, hold in trust, or otherwise control. . . . Further, [the Statute] declares that it does not stop the Commonwealth from seeking other existing and cumulative rights and remedies.
Id. at *41 (citation omitted). As parens patriae, the Commonwealth could also “recover damages for harm to natural resources that it does not own.” Id. at *42. Indeed the state’s “interest in its natural resources that surpasses its citizens’ titles.” Id. (citation omitted). Such “surpassing” means:
[W]hile possessory interests are usually for individual owners themselves to protect, when the harm to such interests is as widespread as alleged in the state’s complaint, it counts as injury not just to the affected individuals, but to the state as a whole.
Id. (citations omitted). Once again, CvM cited no Pennsylvania precedent in support of these rulings. Thus, CvM allows the state to usurp any private claims that might also exist, and to avoid the statute of limitations for claims that private owners can no longer assert.
Finally, in another unprecedented ruling, CvM holds that the economic loss rule also does not apply to actions for environmental damage – despite at least three contrary decisions by the co-equal Pennsylvania Superior Court. Id. at *42 (rejecting defendants’ reliance on Duquesne Light Co. v. Pennsylvania American Water, Co., 850 A.2d 701 (Pa. Super. 2004), General Public Utilities v. Glass Kitchens of Lancaster, Inc., 542 A.2d 567 (Pa. Super. 1988), and Aikens v. Baltimore & Ohio Railroad Co., 501 A.2d 277, 279 (Pa. Super. 1985)). Instead, “by implication,” CvM extended a case that had limited the economic loss rule in cases of private financial losses to claims brought by the government. 2021 WL 6139209, at *42.
By implication, where the Pennsylvania Supreme Court has not expressly settled an issue of public policy, there is no basis on which the intermediate appellate courts must foreclose the complainants’ opportunity to prove their case.
Id. at *42.
We have rarely seen such an expansive judicial fiat. At least in the environmental field, the government is now a litigation Leviathan, permitted to sue just about anybody, over anything, at any time – whether or not it even owns the property allegedly injured. And it may do so using theories of liability, and in particular negligence and strict liability, that were previously limited to private product liability litigation. And make no mistake about it, if not reversed (and CvM is not even an appealable order), this case involving a chemical that hasn’t been sold in 45 years is only the opening gambit in what could result in socialism by litigation. Moreover, if the government can use theories of liability previously limited to private litigants, then (following the camel’s nose into the tent) private litigants will inevitably also seek to wield these weapons of mass litigation – and they’ll take aim at our clients, too, not just environmental (including climate change) defendants.
Nor was the Commonwealth Court panel that made these rulings a bunch of wild-eyed leftists. For better or worse, Pennsylvania elects its judges, and of the seven judges that sat on CvM – none of whom dissented on any of the pro-plaintiff liability holdings – six of them were elected as Republicans.