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ATTORNEY BLOG: Aug. 16, 2012 decision continues battle of the restatements in product liability actions

By: Stephanie Solomon, Esq.

Lynn v. Yamaha Golf-Car Co., Civil Action No. 2:10-cv-01059 (W. D. Pa. Aug. 16, 2012)

Pennsylvania state and federal courts have remained at odds with regard to the governing law in products liability actions since the Third Circuit Court of Appeals applied the Restatement (Third) of Torts: Products Liability §§ 1 and 2 in the controversial case of Berrier v. Simplicity Mfg., Inc., 563 F.3d 38 (2009), incorrectly forecasting the path Pennsylvania strict products liability law would take by mistakenly predicting that the Pennsylvania Supreme Court, if given the opportunity, would abandon the long-standing Pennsylvania precedent of following the Restatement (Second) of Torts § 402A. Why is this an issue? The answer: because whether the Restatement (Second) or the Restatement (Third) governs your case can be critical to the ultimate result. The Restatement (Third) of Torts: Products Liability §§1 and 2 incorporates certain negligence-based foreseeability concepts into the products liability analysis, arguably opening the floodgates as to the amount of “standard of care” and “risk-utility” evidence a jury may now hear. Dissimilarly, the Restatement (Second) of Torts § 402A’s rigid structure forbids a court to consider negligence principles.

The recent Western District decision in Lynn v. Yamaha Golf-Car Co., Civil Action No. 2:10-cv-01059 (W. D. Pa. Aug. 16, 2012) further precipitates this bizarre situation in which the law is different in Pennsylvania state and federal courts – and also amongst Pennsylvania’s federal district courts – on key issues. Thus, depending on the facts of your case, it is often in the interests of either Defense Counsel (in a pure strict liability design or manufacturing case where a state-of-the art defense may be argued), or Plaintiff’s Counsel (in a case where the Plaintiff is not using the product for its “intended use” or is not the “intended user” of the product) to remove the case to federal court if diversity jurisdiction can be established.

In Berrier, the Third Circuit Court of Appeals predicted that if given the opportunity, the Pennsylvania Supreme Court would change longstanding products liability law by adopting the Restatement (Third) of Torts: Products Liability §§ 1 and 2, thereby replacing § 402A of the Restatement (Second) of Torts. Berrier, 563 F.3d at 60. The Berrier decision was issued while the Pennsylvania Supreme Court considered making precisely that adoption in Bugosh v. I.U. North America, Inc. 942 A.2d 897 (Pa. 2008). However, following the Berrier decision, the Pennsylvania Supreme Court ultimately dismissed the appeal in Bugosh as being “improvidently granted,” leaving governing state law as the Restatement (Second) of Torts.

Since Bugosh, Pennsylvania district courts sitting in diversity have been faced with the decision of whether to apply the Restatement (Third) (and if so, what sections), or whether to apply the basic procedural legal doctrine set forth in Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), which would require the application of Pennsylvania state law – i.e., the Restatement (Second) — while the Pennsylvania Supreme Court continues to “punt” on the issue. First, in the 2011 case of Schmidt v. Boardman Co., 11 A.3d 924, 940 (Pa. 2011), Justice Saylor noted the need to settle the inconsistencies but declined to rule directly on the issue, stating “[t]his case was not selected to address the foundational concerns, and, accordingly, the pathways to global resolution are not developed in significant detail in the briefing,” leaving the “present status quo in Pennsylvania to entail[] the continued application of Section 402A of the Restatement (Second).” Id. at 941. The Pennsylvania Supreme Court was given a second opportunity to end this “judicial volleying” once and for all in Beard v. Johnson and Johnson, 41 A.3d 823 (Pa. 2012). The Court “again recognized the continuing state of disrepair in the arena of Pennsylvania strict-liability design defect law,” however – it again also noted that the appeal at issue involved a “subsidiary issue.” Id. at 836. Thus, the Court refrained from entertaining the appellee’s request to consider adopting the Restatement (Third). Id.

The Third Circuit Court of Appeals ultimately reaffirmed that the Restatement (Third) should apply in Pennsylvania federal cases in Covell v. Bell Sports, 651 F.3d 357, 360 (3d Cir. 2011), a diversity suit involving the defective design of a bicycle helmet. Despite this decision, in the case of Sikkellee v. Precision Airmotive Corp., United States District Judge John E. Jones III of the Middle District of Pennsylvania nonetheless applied the Restatement (Second), opining:

[The] Third Circuit’s prediction in Covell is binding upon federal district courts sitting in diversity absent an affirmative indication from the Pennsylvania Supreme Court that it intends to retain the Restatement (Second) as the law in Pennsylvania. In our opinion, this indication was provided in Beard v. Johnson & Johnson, where the Pennsylvania Supreme Court took notice of the ‘continuing state of disrepair in the arena of Pennsylvania strict-liability’ law and nonetheless declined to take the opportunity to replace the Restatement (Second) with the Restatement (Third).

Sikkelee v. Precision Automotive Corp., No. 4:07cv00886, 2012 WL 2552243, at *9 (M. D. Pa. July 3, 2012).

The recent Western District Lynn decision comes on the heels of the Middle District Sikkelee decision, reaching the exact opposite conclusion. In Lynn, District Judge Hornak hinged his decision on the fact that “the Pennsylvania Supreme Court in Beard did not affirmatively disavow the premise of the Covell decision, along with the principle that the Third Circuit’s predictions regarding Pennsylvania state law are binding on this Court absent a decision of the Pennsylvania Supreme court expressly to the contrary.” Lynn, at *12.

The Lynn case arose from an accident involving two teenage girls who were riding a Yamaha golf cart on residential roads in their neighborhood. Id. at *1. Yamaha’s primary defense was that their use of the cart was not an “intended use,” nor was the young driver an “intended user.” Id. at *10. Applying the Restatement (Second), Judge Hornak noted that Yamaha’s arguments may be valid; however, under the Restatement (Third) they are irrelevant, given that the Restatement (Third) employs the concept of “reasonable foreseeability.” Id. at *17. The application of the Restatement (Third) clearly inured to the Plaintiffs’ benefit, in refusing to restrict recovery only to users or consumers by allowing Plaintiffs’ claims to proceed to trial.

For now, it appears that the decision regarding which restatement should apply will continue to be made on a case-by-case basis by each judge in every federal case in Pennsylvania until the Pennsylvania Supreme Court rules squarely upon the issue. Therefore, it’s critical to the initial case analysis that any attorney with a pending federal strict products liability case or a pending state court case where federal removal is achievable understands the facts of that case before determining whether the Restatement (Second) or the Restatement (Third) best supports their argument.