Just in time for Thanksgiving, the Pennsylvania Supreme Court handed down a decision last week in Tincher v. Omega Flex Inc., that will significantly revamp the letter of product liability law in the state, earning high praise from both sides of the bar. In a 137-page opinion, outgoing Chief Justice Ronald Castille surveyed the history of tort law in Pennsylvania, with references as far back as 13th century England. Ultimately the court unanimously overruled a 1978 decision, Azzarello v. Black Brothers Co., which had formalized the state’s distinction between strict liability and negligence. Significantly, the court also decided not to adopt the American Law Institute’s Restatement of Torts, Third, while referencing repeated predictions from the Third Circuit that they would ultimately do so.
In Tincher, a jury returned a $1 million verdict against manufacturer Omega Flex Inc. in response to a homeowners’ allegations that its stainless steel tubing was defective when it left the company’s possession. The plaintiffs, Judith and Terry Tincher, alleged that the tubing caused their house to burn down after the tubing was energized by a nearby lightning strike. Omega Flex appealed and urged adoption of the Third Restatement, given that under that version of the law, “the plaintiff could not simply criticize the existing design; instead, the plaintiff would be required to prove that the manufacturer could and should have adopted a reasonable alternative design.” The Tinchers, meanwhile, responded that the Third Restatement, by considering manufacturers’ obligations, improperly introduced negligence into strict liability cases. The Pennsylvania Superior Court affirmed the jury verdict and refused to adopt the Third Restatement, noting that only the state Supreme Court had the power to do so.
On Wednesday last week the state Supreme Court justices ruled 4-2 against adopting the Third Restatement, but were in complete agreement in overruling Azzarello, a long-maligned decision that stripped juries of the ability to make judgments on the dangerousness of products. The Azzarello case dictated that juries receive instructions to reach conclusions on whether products are defective without undertaking any consideration of a product’s risks and utilities and the reasonableness of the manufacturer’s conduct. The result, according to arguments advanced in Omega Flex’s briefing, is that juries receive no guidance over the key question of whether a product is “safe for its intended use.”
In his ruling, Chief Justice Castille outlined new standards for jury instructions in strict liability cases. Importantly, overruling Azzarello means that judges will no longer be the risk-utility calculators for products, i.e. they will no longer be the ones determining whether the prospect of injury outweighs the cost of an alternative design. Under Azzarello, the trial court made the risk/benefit determination often before the facts were even in evidence. From now on, the determination will be made by the jury based on the facts, bringing Pennsylvania in line with the rest of the country.
While the abolition of Azzarello is considered a boon for the defense bar, the Supreme Court’s decision not to adopt the Third Restatement is seen as a victory for plaintiffs, given that its adoption would have introduced into liability questions of whether a manufacturer acted reasonably in designing the product and whether it could have foreseen the product’s risks. As a result of the ruling, plaintiffs can prove that sellers placed products in a “defective condition” either by showing that they violated a consumer expectation standard or a risk-utility standard. This puts the focus on the product, not the conduct of the manufacturer, and is arguably easier for plaintiffs to prove.
Although both sides stand to gain from this revision of product liability law in the commonwealth, the state Supreme Court’s ruling is by no means the last word. Indeed, Chief Justice Castille’s opinion identified that many of the issues at play with respect to strict liability are ripe for consideration by the General Assembly as a matter of public policy. In the absence of legislative initiative, however, the Court would fill the void.
Furthermore, the ruling ensures that trial judges will still have a substantial role going forward – one that will involve interpreting and articulating components of the revised law. How will the new jury instructions be formulated in a post-Azzarello world? What exactly will the burden of proof look like for plaintiffs and would it be shifted to the defendants under a risk/utility analysis? These issues were left for another day by the Court. Trial judges’ interpretations of these elements will surely not be uniform, and differing approaches employed by the lower courts is likely to cause confusion, at least initially. One thing is certain – Pennsylvania’s appellate courts will have their hands full in the coming years, and ultimately the Pennsylvania Supreme Court will likely have to weigh in again. We here at the Monitor will be watching how this important development plays out in 2015 and beyond.