Will The Pennsylvania Supreme Court Ever Adopt The Restatement Third Of Torts In Strict Liability Cases? Will Somebody Properly Ask The Question?

Pennsylvania – Product Liability

Key Points:

• The Court defines one issue in Pennsylvania's confusing strict liability law: a trial court's threshold risk-utility analysis must consider all intended uses of a multi-use product, not just the one involved in the claim.
• But four justices may be lining up to adopt the Third Restatement version, if the right case comes along, and the parties haven't waived the issue.

Beard v. Johnson and Johnson, 35 WAP 2010 __ Pa. __ (March 22, 2012), is yet another decision in which the Court acknowledges, but declines to address, what perhaps four of its justices now believe to be the state of "disrepair" in Pennsylvania's unique strict liability design-defect law. The Court has conceded its attempt to keep its strict liability law free of negligence concepts has created confusion in the lower courts, particularly in how they are to perform the risk-utility balancing task before allowing such cases to proceed.[i] In the fractured 2003 Philips^[ii] decision, Justice Saylor and two of his colleagues argued that Pennsylvania should adopt Section 2 of the Restatement (Third) of Torts, which openly acknowledges the use of negligence principles in evaluating jury questions of product defect and intended users. Five years later the court granted review in Bugosh[iii] to specifically address whether it should apply the Third Restatement, then changed its mind, dismissing the appeal (likely based in part on a question of waiver of the issue on appeal).[iv] In the meantime, the Third Circuit has continued with its prediction that the Pennsylvania Supreme Court will eventually come together on the issue and adopt the Third Restatement formulation.[v]

But while waiver^[vi] allowed the court to again avoid this looming issue in the recent Beard decision, it does serve to clarify a subsidiary issue in the existing law.^[vii] Beard holds that when the trial court performs its risk-utility balancing before allowing the case to proceed in strict liability, it is "not restricted to considering a single use of a multi-use product" but all its intended uses. [Slip op at 45.] It also suggests the quantum of evidence that a plaintiff must present to the trial court in performing its Azarello risk-utility balancing task before allowing a case to proceed in strict liability.

The product involved in Beard was an articulating endoscopic linear cutter, described as a "linear cutting and stapling instrument." The manufacturer marketed it for use in both endoscopic as well as more traditional open surgical procedures, and in this case, it was used in an open gastric bypass procedure. When the patient "experienced complications" after the procedure, the surgeons reentered her abdomen, found that staples were missing, attributing the problem to "mechanical staple failure" in the operative report. The patient developed sepsis and died.

The case against the manufacturer proceeded on both product malfunction and design defect theories. The defendant preserved challenges to the claims by a timely nonsuit motion (the decision doesn’t mention a motion for directed verdict). The jury ultimately returned a multi-million dollar verdict on the design defect claim. The defendant filed post-trial motions asserting, among other things, that the strict liability case should not have proceeded because the trial court had not performed, or properly performed, a risk-utility analysis. The trial court denied the motions.

On appeal, the Superior Court vacated the design defect award, directing the trial court to enter judgment notwithstanding the verdict in favor of the manufacturer. It rejected the trial court's conclusory post-trial explanation as a proper risk-utility balancing under Azarello. In conducting its own risk-utility review of the evidence – as presented at trial and not restricted to the plaintiff's allegations – it concluded there was "only a minor likelihood that danger would occur and there is no feasibility of a safer design that would enable the product to accomplish its goal."[viii] The Superior Court, in part, relied on the lack of any expert testimony explaining how the plaintiff's proposed alternative design additions would have affected the utility of the product when used as an endocutter as well as when used in this open procedure.

The Supreme Court, in accepting the plaintiff's appeal, considered the argument that the Superior Court’s risk-utility was just as conclusory and flawed and whether it should have restricted its review to the use involved in the case. Other than recounting all of the arguments, the Supreme Court offers little guidance on the proper conduct of a risk-utility analysis by a trial court, except to agree with the defendant that “the dearth of manufacturing and economic information on this record left those courts with little else to do but draw somewhat abstract conclusions.”[ix]

Only a single, narrow issue of strict liability law was resolved in Beard, stated in a single sentence: that where a product is designed to have multiple functions, they must be considered in the threshold risk-utility task performed by the trial court. The decision should also remind practitioners that plaintiffs have the obligation to present proper evidence in the form of data and qualified expert opinions in performing risk-utility analysis, that trial courts are obliged to consider this evidence, and that defendants must preserve challenges to such evidence and court rulings at every stage of the proceedings.

The decision continues to leave the question of Third Restatement adoption in limbo. Justice Saylor, writing for the Court, once again criticized the "disrepair" of Pennsylvania's strict liability design defect law, argued for a revamping of its "foundational principles," now joined in that sentiment by Chief Justice Castille, along with Justices Eakin and Orie Melvin. Justice Baer’s concurrence, joined by Justices Todd and McCaffery, noted the appellant had waived the Restatement Third issue by failing to include it in his Rule 1925(b) statement defining the appeal issues. These justices also distanced themselves from Justice Saylor's criticisms of the law, as well as the lead opinion’s footnote suggesting the risk-utility issue should have been addressed by the jury, pointedly "express[ing] no opinion on the merits of the adoption of the Restatement Third." Id. at 46. Thus, the decision offers limited but useful guidance in a corner of products liability law, but it does not disturb the Third Circuit's Berrier prediction (although the concurrence somewhat clouds that prediction). But it may serve as a cautionary tale for practitioners and clients to consider: in every appropriate case, the issue of whether Pennsylvania should adopt the Third Restatement's reasonableness-based, risk-utility balancing test as the standard for judging product defect, allowing the jury to address the issue, must be preserved at every stage of litigation. In Beard, the Court has again refused to consider the issue in part because the defendants failed to properly preserve it. Of course, the members of our firm's appellate department will help in developing case strategy and trial presentation to properly frame these and other issues for eventual appeal. We are pleased that clients are increasingly involving appellate counsel early in complex, high-exposure cases, through trial, post-trial as well as eventual appeal, to help insure that our clients secure every advantage of existing and developing law.

*Jim is a shareholder in our Philadelphia, Pennsylvania, office who can be reached at 215.575.2703 or jwgicking@mdwcg.com.

Defense Digest, Vol. 18, No. 2, June 2012