Compliance with Industry or Government Standards Inadmissible in Pennsylvania Design Cases

By and on February 14, 2024

The Pennsylvania Supreme Court’s recent decision in Sullivan v. Werner Co., 206 A.3d 846 (Pa. Super 2023) dealt a blow to defense interests by reaffirming that compliance with governmental standards is not admissible in strict liability cases.

The holding in Sullivan confirmed that evidence of industry and governmental standards remains inadmissible following the Pennsylvania Supreme Court’s holding in Tincher v. Omega Flex, 104 A.3d 328 (2014). Tincher confirmed the adoption of Section 402A of the Restatement (Second), which imposes strict liability on sellers of an unreasonably dangerous product. Notably, Tincher overruled Azzarello v. Black Brothers Co., Inc., 391 A.2d 1020 (1978), which previously held, in part, that the “unreasonably dangerous” standard poses a legal question. Under Tincher, the “unreasonably dangerous” inquiry is a question of fact requiring a jury to determine if a product is defective.

Following Tincher, uncertainty lingered as to whether the overruling of Azzarello also overruled the “Lewis Rule,” under which evidence of industry and governmental standards is inadmissible in strict product liability cases. Lewis v. Coffing Hoist Div., Duff-Norton Co., Inc., 528 A.2d 590 (1987), However, the Lewis Rule was developed before Tincher, while Azzarello was still controlling precedent, thus creating confusion and requiring the Pennsylvania Supreme Court to resolve an issue that has plagued litigants in strict liability litigation for a decade.  

The Sullivan court closely examined two tests created by Tincher to determine whether a product is unreasonably dangerous: (1) whether the product danger exceeds the expectations of an ordinary consumer (the “consumer expectation test”) and (2) whether the risk of danger outweighs the utility of a product (the “risk-utility test”). It is important to note that Tincher rejected any application of traditional negligence concepts in strict liability litigation, meaning that a product seller can still be strictly liable even if it exercised due care or acted reasonably in a manner that would usually preclude negligence liability under Pennsylvania law. 

The Sullivan court confirmed that the Lewis Rule still applies post-Tincher, even though Lewis rested on the negligence-based concepts of Azzarello. The Supreme Court reasoned that Tincher is not compatible with a rule permitting trial evidence of industry-standard compliance, bootstrapping the Lewis Rule into a more modern post-Tincher standard. Compliance is “irrelevant if a product is designed with all possible care….because the manufacturer is still liable if the product is unsafe.”

The Sullivan decision is yet another example of Pennsylvania common law reinforcing the wall between strict liability and negligence theories. Defendants may be liable for selling a dangerous product, even if the defendants designed the product reasonably and with the utmost due care and compliance with governmental standards. What Sullivan did not address, however, is the role that certain federal preemption rules—such as those found in the Federal Hazardous Substances Act or Food and Drug Administration regulations—may have on defective product cases. It may be another ten years before the Supreme Court has an opportunity to address these types of issues, and, until then, uncertainty created by Tincher will continue to affect strict product liability litigation in the Commonwealth.

If you have any questions about this legal update or any other legal developments, please contact the authors or Gordon Rees Scully Mansukhani’s Environment/Toxic Tort practice group for more information.

Filed under Compliance with Government Standards, strict liabilitly Tagged with ,

U.S. Supreme Court Changes Jurisdictional Landscape in Holding that Consent-by-Registration Laws Suffice to Allow General Personal Jurisdiction over Corporate Defendants

By , and on June 30, 2023

U.S. Supreme Court Rejects Challenge to Pennsylvania’s Corporate Consent-by-Registration Statute, Allowing Suits Against Foreign Companies Whether Arising from Acts in Pennsylvania or Elsewhere

The U.S. Supreme Court on June 27 in Mallory v. Norfolk Southern Railway Co., Case No. 21-1168 (2023) affirmed a statute that grants state courts general personal jurisdiction over out-of-state companies registered to do business in the state, even when an alleged injury occurred elsewhere, by virtue of registration alone.  The Court rejected an out-of-state railway company’s Fourteenth Amendment Due Process challenge to Pennsylvania’s consent-by-registration statute.  For a company registered as a foreign corporation in Pennsylvania, this is now the equivalent of being headquartered there, and that company may be hauled into court in Pennsylvania for any suit, whether the suit arises from acts in Pennsylvania or anywhere else in the country. 

Expected Impact on Corporate Clients

We expect there to be an immediate impact on corporate clients with presences in consent-by-registration states, with filings based solely on the fact that the corporation is registered to do business in the state.  Presently, Pennsylvania and Georgia have consent-by-registration laws for out-of-state corporations that have been upheld.  We will be watching to see whether other state legislatures amend their corporate registration statutes to impose consent to jurisdiction by way of registration. 

1917 Precedent Upheld as Basis for Opinion

The Court in Mallory held that its century-old decision in Pennsylvania Fire Insurance v. Gold Issue Mining, 243 U.S. 93 (1917) – which allowed a Pennsylvania insurer to be sued in Missouri by an out-of-state plaintiff on an out-of-state contract – remains controlling precedent.  The Court reasoned that Pennsylvania’s law, like the Missouri law upheld in Pennsylvania Fire, explicitly provides that registration to conduct business as an out-of-state corporation allows state courts to exercise general personal jurisdiction over an out-of-state corporation as if it were a domestic corporation. 

Factual Background and Statutory Scheme

Virginia resident Robert Mallory sued his former employer, Norfolk Southern, after being diagnosed with cancer that he attributed to his work as a freight-car mechanic in Ohio and Virginia.  Norfolk Southern, incorporated and headquartered in Virginia, claimed that a Pennsylvania court’s exercise of personal jurisdiction over it would violate the Due Process Clause of the Fourteenth Amendment.  Mr. Mallory pointed to Norfolk Southern’s corporate registration and presence in Pennsylvania, including that the company manages over 2,000 miles of track, operates 11 rail yards, and runs 3 locomotive repair shops in the Commonwealth. 

Pennsylvania law provides that a foreign corporation may not conduct business in the Commonwealth until it registers with the Pennsylvania Department of Business.  15 Pa. Cons. Stat. §411(a).  Pennsylvania’s long-arm statute allows Pennsylvania courts to exercise general personal jurisdiction over foreign corporations that are registered in Pennsylvania on “any cause” in the Commonwealth’s courts.  42 Pa. Cons. Stat. §5301(b).

Jurisdiction Held to be Appropriate Based on Corporate Registration

The Pennsylvania Supreme Court held that this statutory scheme violates the Due Process Clause because it grants general personal jurisdiction over foreign corporations without an affiliation that is so continuous and systematic as to render the foreign corporation essentially at home in Pennsylvania, and because compliance with Pennsylvania’s mandatory registration requirement does not constitute voluntary consent.

In vacating the Pennsylvania Supreme Court’s judgment and remanding the case, the Court held that Pennsylvania Fire remains the law and that jurisdiction was appropriate over Norfolk Southern.  The Court leaned heavily on its 1917 precedent for the proposition that statutes requiring corporate “consent” to jurisdiction do not violate the Due Process Clause of the Fourteenth Amendment.  The Court reasoned that a Certificate of Authority to do business within the Commonwealth confers benefits and burdens shared by domestic corporations, including amenability to suit in state court on any claim regardless of how much business a company actually conducts in Pennsylvania. 

Intervening Jurisdictional Decisions

The Supreme Court found that the Pennsylvania Supreme Court improperly concluded that intervening decisions implicitly had overruled Pennsylvania Fire.  Specifically, Norfolk Southern had argued that International Shoe, 326 U.S. 310 (1945), and others undermined Pennsylvania Fire.  The Court disagreed, stating:

All International Shoe did was stake out an additional road to jurisdiction over out-of-state corporations . . . . Pennsylvania Fire held that an out-of-state corporation that has consented to in-state suits in order to do business in the forum is susceptible to suit there.  International Shoe held that an out-of-state corporation that has not consented to in-state suits may also be susceptible to claims in the forum state based on “the quality and nature if its activity” in the forum.

The Court also rejected Norfolk Southern’s argument that requiring companies to face suits in Pennsylvania would violate the “fair play and substantial justice” principle in International Shoe, pointing to Norfolk Southern’s tracks crisscrossing Pennsylvania, the freight tonnage it moved, and its many facilities in the Commonwealth.  The plurality specifically held that Pennsylvania Fire (holding that an out-of-state corporation that has consented to in-state suits to do business in a forum is susceptible to suit there) and International Shoe (holding that an out-of-state corporation that has not consented to in-state suits may be susceptible to claims in the forum State based on the quality and nature of its activity in the forum) “sit comfortably side by side.” 

Auto-Jurisdiction Based on Corporate Registration

Until Mallory, general personal jurisdiction over a corporation could be found in two very distinct places:  (1) the state of a company’s headquarters, and (2) the state of a company’s incorporation.  Mallory now also will allow a corporation to be hauled into court in any state in which it has consented to jurisdiction.  It is very clear now that state statutes explicitly requiring a company to submit to state court jurisdiction are viable and constitutional, thus creating auto-jurisdiction for any and all lawsuits where such statutes exist, regardless of where the actual basis for a suit arises or the residency of the plaintiff.

Immediate and Potential Practical Impacts of Decision

What do we make of states that simply require a company to have a registered agent of service?  Is that enough to create automatic general personal jurisdiction?  The Court did not answer that question directly, but based on its heavy reliance on Pennsylvania Fire, it appears the Court may venture there in the future.  The practical and immediate impact of this opinion is all but certain – plaintiffs will view it as a license to forum-shop in favorable jurisdictions with little actual connection to a venue, likely resulting in a near-term increase in forum shopping and challenges to general personal jurisdiction.

Of additional concern is the Court’s repeated citation to facts regarding Norfolk Southern’s continuous and expansive business presence in Pennsylvania as justification for the fairness of making it open to suit in the Commonwealth.  Is this a glimpse at the majority’s future plans to extend general personal jurisdiction over all corporations in any state in which those companies choose to do business?  The Court made the point several times that Norfolk Southern has taken full advantage of the business opportunities that Pennsylvania has to offer as if it were a domestic corporation and thus must also suffer the burdens of a domestic corporation.  In the modern world of extensive e-commerce, one must wonder whether a future court may hold simply that by selling products online a company has consented to jurisdiction in any place where someone may access the internet.

The future of corporate personal jurisdiction is now unclear.  This will undoubtedly lead to rampant forum shopping by plaintiffs, with plaintiffs bringing suits in states with jurisdictional consent statutes where the state’s laws are favorable to plaintiffs.  Product liability and toxic tort defendants will be at significant risk of being sued in courts with plaintiff-friendly rules on issues like apportionment of liability, expert witness qualifications, and causation burdens of proof, regardless of that forum’s actual relationship to the underlying facts of a case.  This decision will increase the unpredictability of doing business across state borders.  Companies may start to think long and hard about registering an agent for service in a state with a jurisdictional consent statute or even do business there at all, with impacts on the economic health of the state.

Moreover, Mallory may leave the door open for state courts to determine that registration is a significant – perhaps even dispositive – part of any “purposeful availment” determination for specific personal jurisdiction, even if not general jurisdiction as in this case.

Prior Related Posts

For our prior posts on this case, please see Personal Jurisdiction: Open Season on Forum Shopping? and Supreme Court of Pennsylvania to Address Whether Registration of Out-of-State Businesses Creates General Jurisdiction | Environmental and Toxic Tort Defense Insight (ettdefenseinsight.com).

Filed under Uncategorized

Supreme Court of Pennsylvania To Address Whether Registration of Out-of-State Businesses Creates General Jurisdiction

By and on November 24, 2020

Pennsylvania’s unique corporate registration statute may be on the chopping block after a three-judge Superior Court panel in Mallory v. Norfolk Southern Railway agreed to transfer a jurisdictional dispute to the Commonwealth’s Supreme Court pursuant to a provision in the Pennsylvania Judiciary Code that gives the Supreme Court exclusive jurisdiction over any appeal from a trial court decision finding that a statute is “repugnant to the Constitution.” 42 Pa. C.S. § 722(7).

The key issue in Mallory v. Norfolk Southern Railway is whether Pennsylvania courts may constitutionally exercise general personal jurisdiction over out-of-state corporations simply because they register to conduct business in the Commonwealth of Pennsylvania. Pennsylvania law provides that a foreign corporation may not do business in the Commonwealth until it registers with the Pennsylvania Department of Business pursuant to 15 Pa.C.S.A. § 411. The Pennsylvania long-arm statute provides that general personal jurisdiction may be exercised over a foreign corporation in three circumstances: (1) incorporation under or qualification as a foreign corporation; (2) consent; and (3) the carrying on of a continuous and systematic part of its general business in Pennsylvania. 42 Pa. C.S. § 5301(a)(2). These statutes construed together appear to require foreign corporations to submit to the court’s general jurisdiction as a condition for doing business in Pennsylvania.

This is a hotly contested issue in Pennsylvania, and courts have struggled to reach a consensus as to whether the corporate registration and long-arm statutes comport with the U.S. Supreme Court’s holding in Daimler, which mandates that an out-of-state corporation is not subject to general jurisdiction unless it is registered to conduct business in or has its principal place of business in the forum.

In Mallory, the plaintiff (a resident of Virginia) filed suit in the Philadelphia Court of Common Pleas against his employer Norfolk Southern Railway (Virginia corporation with its principal place of business in Virginia) alleging violations of the Federal Employers’ Liability Act after allegedly being exposed to carcinogens while working at Norfolk’s locations in Ohio and Virginia. Norfolk filed Preliminary Objections seeking to dismiss the complaint for lack of personal jurisdiction. Plaintiff argued that Norfolk consented to general personal jurisdiction pursuant to 42 Pa.C.S.A § 5301 by registering to do business in Pennsylvania.

Judge Arnold New granted Norfolk’s Preliminary Objections for two reasons. First, he found that the Pennsylvania corporate registration statute does not comport with federal due process because it allows Pennsylvania to exert general jurisdiction over out-of-state entities that are not “at home” in the Commonwealth. This unique rule creates a federalism issue because it allows Pennsylvania courts to interfere with the right of other states to render verdicts against their own corporate citizens. Second, the corporate registration statute compels out-of-state entities to subject themselves to general jurisdiction as a condition of doing business in Pennsylvania. Judge New reasoned that this is contrary to U.S. Supreme Court law, which “made clear that a state cannot claim general jurisdiction over every corporation doing business within its borders… By wrapping general jurisdiction in the cloak of consent, Pennsylvania’s mandated corporate registration statute attempts to do exactly what the United States Supreme Court prohibited in Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011), BNSF Ry. Co. v. Tyrrell, 137 S. Ct. 1549 (U.S. 2017) and Daimler AG v. Bauman, 571 U.S. 117 (U.S. 2014).”

Judge New’s ruling is consistent with an overwhelming majority of courts throughout the country that have considered this same issue. See, e.g., Brown v. Lockheed Martin Corp., 814 F.3d 619, 636 (2d Cir. 2016) (“[T]he analysis that now governs general jurisdiction over foreign corporations…suggests that federal due process rights likely constrain an interpretation that transforms a run-of-the-mill registration and appointment statute into a corporate ‘consent’” to general jurisdiction); Lanham v. BNSF Ry. Co., 939 N.W.2d 363, 371 (Neb. 2020) (“[T]reating BNSF’s registration to do business in Nebraska as implied consent to personal jurisdiction would exceed the due process limits prescribed in [Goodyear and Daimler]”); Dutch Run-Mays Draft, LLC v. Wolf Block, LLP, 164 A.3d 435, 444 (N.J. Super. Ct. – App. Div. 2017) (“We now join the many courts that have circumscribed the view of general jurisdiction post-Daimler.”).

Pennsylvania law is unique in that it permits courts to exert general jurisdiction over out-of-state defendants solely on the basis that those entities registered to conduct business in Pennsylvania. Product defendants in Pennsylvania have for several years urged the appellate courts to align Pennsylvania law with U.S. Supreme Court law by overturning the relevant business registration and long arm statutes because those laws improperly compel foreign companies to consent to general jurisdiction though they are not “at home” in Pennsylvania. The Superior Court’s decision to transfer Mallory to the Supreme Court is a big step that we hope signals a change in controlling Pennsylvania law.

From a practical standpoint, Philadelphia has long been viewed around the country as a plaintiff-oriented jurisdiction that is a favorable forum to prosecute product liability and mass tort litigation. The Supreme Court’s ruling in Mallory has the potential to end such blatant forum shopping.

Filed under Jurisdiction, Pennsylvania, Strict Liability

PA Appellate Court Declines Opportunity to Re-Evaluate State Registration Statute Under Daimler

By and on July 6, 2020

The PA Superior Court of Pennsylvania – the Commonwealth’s intermediate appellate court – recently issued its long-awaited en banc opinion in Murray v. Am. Lafrance. A copy of the decision is attached HERE.

They key issue in Murray was whether an out-of-state company that registers to do business in Pennsylvania consents to general personal jurisdiction. The Pennsylvania corporate registration statute purports to confer consent to general jurisdiction over an out-of-state entity in exchange for the ability to conduct business within the Commonwealth. This issue has been hotly contested in recent years within Pennsylvania, with several courts finding that the registration statute is unconstitutional under U.S. Supreme Court precedent in Daimler, which provides that an out-of-state defendant is only subject to general jurisdiction where it is incorporated or maintains a principal place of business.

Despite the holding in Daimler, the Superior Court recently found in another matter that registration to conduct business in Pennsylvania establishes consent to general jurisdiction in the Commonwealth in a manner than comports with due process. Many defense-oriented commentators hoped that Murray would provide an opportunity for the Superior Court to reverse its prior rulings in accordance with Daimler.

In Murray, the trial court originally dismissed an out-of-state defendant for lack of general personal jurisdiction under Daimler, and on rehearing en banc the Superior Court upheld the order, but refused to resolve the mandatory consent to general jurisdiction issue, finding instead that Plaintiffs waived the argument by failing to raise it at the trial level. Although the Superior Court affirmed the order dismissing the out-of-state defendant for lack of personal jurisdiction, it did not address the merits of plaintiff’s argument that the defendant consented to jurisdiction by registering to conduct business in Pennsylvania.

Unfortunately for out-of-state product defendants that are registered to conduct business in Pennsylvania, the state of the law is such that consent by registration is still a sufficient basis for plaintiffs to assert general jurisdiction over out-of-state defendants in Pennsylvania, even after the Daimler decision appeared to reject this approach.

As this blog has previously reported, other states have rejected registration by an out-of-state defendant as consent to jurisdiction.

Filed under Jurisdiction, Pennsylvania

Not Fair in Pennsylvania (Update) – The Pennsylvania Supreme Court Rules That Fair Share Act Does Not Allow Fault-Based Apportionment in Strict Liability Cases

By on March 27, 2020

In a decision that will reshape Pennsylvania products liability cases, the Pennsylvania Supreme Court has ruled that the Fair Share Act does not require pro rata percentage apportionment of damages among codefendants in proportion to fault. Instead, in asbestos and perhaps other strict liability cases, damages are to be split per capita, equally among defendants and a limited set of other responsible parties.

The Fair Share Act

The proper method by which shares of liability are allocated to asbestos defendants (and strict liability defendants more generally) was unclear for some time in the Commonwealth of Pennsylvania. The Fair Share Act, passed in 2011, apparently clarified the issue by eliminating joint and several liability apportionment in most tort cases.

[E]ach defendant shall be liable for that proportion of the total dollar amount awarded as damages in the ratio of the amount of that defendant’s liability to the amount of liability attributed to all defendants and other persons to whom liability is apportioned.

42 Pa. C.S. §7102(a.1). This provision appears to make “pro rata” or “apportioned” allocation of fault the default mechanism for allocating liability in Pennsylvania.

The statute further provides that “a defendant’s liability shall be several and not joint, and the court shall enter a separate and several judgment in favor of the plaintiff and against each defendant for the apportioned amount of that defendant’s liability.” This provision makes all tortfeasors severally liable to the injured party except in a few defined circumstances, such as where a defendant is found more than 60% liable.

The Fair Share Act specifically applies to “actions for strict liability,” but trial courts have inconsistently applied pro rata allocation in asbestos strict liability cases, often relying upon the language from a prior version of the Fair Share Act which apportioned fault amongst strictly liable defendants on a per capita basis, such that each defendant is equally responsible for a portion of the verdict (e.g. five defendants would each be 20% liable) without regard to degrees of fault.

Roverano Lower Court Decisions

A Philadelphia jury awarded $6.4 million to a former utility worker and his wife following an asbestos (lung cancer) trial. The trial court ruled that the Fair Share Act did not apply and apportioned the judgment equally (per capita) among the eight tortfeasors. The two remaining defendants at trial appealed, arguing that pro rata allocation was required under the Fair Share Act. The Superior Court, Pennsylvania’s intermediate appellate court, sided with the defendants and reversed.

Roverano Supreme Court Decision

On February 19, 2020, a majority of the Supreme Court of Pennsylvania held that the Fair Share Act requires trial courts to apportion liability equally (per capita) among strictly liable joint tortfeasors in asbestos litigation. [The majority opinion can be found here.] The court also ruled that the Fair Share Act allows defendants to include bankrupt entities on the verdict sheet and apportion liability against them, subject to (1) appropriate proof against the bankrupt entity and (2) provided that the bankrupt entity was joined as a defendant. Per capita allocation against a bankrupt entity is also permitted if that entity entered into a release with the plaintiff. Under the Supreme Court’s logic, the same rule should apply to settling codefendants, provided non-settling parties make the appropriate proofs against each settling entity.

Justice Wecht’s concurring opinion [found here] explained that the Fair Share Act was never intended to repeal a common law strict liability rule that compelled trial courts to apportion strict liability verdicts on a per capita basis. The use of the term “strict liability” was only “intended to eliminate joint and several liability for strict liability cases as well as for negligence actions.” Justice Wecht reasoned that “in providing that strict liability would apply to defendants severally rather than jointly, the General Assembly neither said nor clearly implied that it intended to displace per capita apportionment in strict liability cases.” Like the majority, Justice Wecht believes that it is too scientifically difficult to apportion fault in asbestos cases on a pro rata basis – that juries and trial courts cannot fairly apportion relative fault in asbestos and other toxic tort cases.

Impact on Products Liability Litigation in Pennsylvania

The Supreme Court did not explicitly state whether its holding is limited to asbestos and toxic tort cases, where scientific and exposure issues arguably make it difficult to fairly assign fault-based liability (though juries seem perfectly capable of the task in most other jurisdictions), or whether per capita allocation applies across the board to all strict liability defendants in Pennsylvania.

Three major effects of Roverano are likely: (1) to increase settlement pressure on nominal defendants facing per capita liability allocation at trial; (2) to incentivize defendants to join additional parties to spread liability amongst as many defendants as possible; (3) to change the way cases are tried, for example “pointing the finger” at more culpable parties.

Many commentators believe that the Supreme Court intended Roverano as a special rule in cases where damages and liability cannot reasonably be divided between multiple defendants. If true, the Fair Share Act would still apply to other types of strict liability cases, such as those involving industrial equipment, hard consumer goods, etc. On the other hand, if Roverano has broad applicability to all forms of strict liability cases, it will lead to a drastic change in the way that product defendants negotiate settlements. This interpretation of Roverano could lead to an explosion of third-party litigation, especially in complex products cases implicating numerous product distributors, component part manufacturers, etc.

Filed under Apportionment, Asbestos, Pennsylvania, Per Capita, Pro Rata, Strict Liability

Not Fair in Pennsylvania: Application of The Pennsylvania Fair Share Act to Strict Liability Cases Reviewed by State Supreme Court

By and on March 11, 2019


In Pennsylvania, the proper method by which shares of liability are allocated to asbestos defendants (and strict liability defendants more generally) has been unclear for some time. The Supreme Court of Pennsylvania heard argument on March 6, 2019 in a case that should clarify matters and provide some certainty regarding the Pennsylvania Fair Share Act.

Background

The Pennsylvania legislature passed the Fair Share Act in 2011, eliminating joint and several liability from most tort cases. See 42 Pa. C.S. §7102. Under the Fair Share Act, each defendant is only liable for its apportioned amount of lability:

Where recovery is allowed against more than one person, including actions for strict liability, and where liability is attributed to more than one defendant, each defendant shall be liable for that proportion of the total dollar amount awarded as damages in the ratio of the amount of that defendant’s liability to the amount of liability attributed to all defendants and other persons to whom liability is apportioned under subsection (a.2).

42 Pa. C.S. §7102(a.1). From a practical standpoint, this provision of the Fair Share Act makes “pro rata” or “apportioned” allocation the default mechanism for allocating liability amongst tortfeasors in Pennsylvania.

Subsection (a.2) provides that “a defendant’s liability shall be several and not joint, and the court shall enter a separate and several judgment in favor of the plaintiff and against each defendant for the apportioned amount of that defendant’s liability.” 42 Pa. C.S. §7102(a.2). This provision eliminates joint and several liability and makes all tortfeasors severally liable to the injured party except in a few defined circumstances. For instance, where a defendant is found more than 60% liable to plaintiff, that defendant is jointly and severally liable. See 42 Pa. C.S. §7102(a.1)(3).

Although the Fair Share Act specifically applies to “actions for strict liability,” trial courts have inconsistently applied pro rata allocation in asbestos strict liability litigation. Many courts have relied upon a prior version of the Fair Share Act which apportioned fault amongst strictly liable defendants on a per capita basis whereby each defendant is equally responsible for a portion of the verdict (e.g. five defendants would each be 20% liable).

Roverano

The Superior Court held in December 2017 that the Fair Share Act applies to both negligence and strict liability actions. See Roverano v. John Crane, Inc., 177 A.3d 892 (Pa. Super. 2017). In Roverano, a Philadelphia jury awarded $6.4 million to a former utility worker and his wife in an asbestos (lung cancer) lawsuit. The trial court ruled that the Fair Share Act did not apply and apportioned the judgment equally among the eight defendants determined to be tortfeasors. The two defendants left at trial appealed, arguing (1) that the Fair Share Act applies to strict liability matters and (2) that the jury may consider evidence of settlements with bankrupt entities in connection with apportionment of liability.

The Superior Court agreed, finding that “liability in strict liability cases must be allocated in the same way as in other tort cases, and not on a per capita basis” and that “settlements with bankrupt entities [may be] included in the calculation of allocated liability” under the Fair Share Act provided that defendants at trial “submit evidence to establish that the non-parties were joint tortfeasors.” Roverano, 177 A.3d at 909.

The Pennsylvania Supreme Court granted a petition for appeal in Roverano to settle these issues of “first impression” to determine the proper method of allocation in strict liability cases. The Roverano case was argued before the Supreme Court on March 6, 2018.

The justices were generally skeptical of proportional allocation of fault in asbestos litigation, finding that such an approach would lend itself to “junk science” over how fault should be apportioned between defendants. Further, the justices questioned how it would be possible for a jury to determine proportional fault in a “non-arbitrary way” in asbestos cases. Counsel for the defense argued that the Fair Share Act is specifically focused on apportionment of damages, not liability, such that the cause of action is not altered. Plaintiffs’ counsel asserted that it would be impossible for the jury to apportion fault in this manner where the medical community has not been able to do so in the asbestos context. Plaintiffs also argued that bankrupt entities should not be allowed on the verdict sheet because it would violate federal law that bars bankrupt entities from defending lawsuits.

Roverano presents an opportunity for the Supreme Court to set the record straight once and for all as to whether the Fair Share Act applies to strict liability litigation. It appears based on oral argument, however, that the Supreme Court is focused more narrowly on whether the Fair Share Act should apply in asbestos cases, entertaining argument as to whether it is medically and scientifically possible to do so at all. Some commentators were anticipating that the Supreme Court might – in the interest of predictability in products litigation – take a broader approach and establish a framework as to how liability should be apportioned generally in strict liability cases. A decision is expected in a few months.

Filed under Apportionment, Asbestos, Damages, Pennsylvania