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LITIGATION PRACTICE GROUP

Changes In Products Liability Law:

The Pennsylvania Supreme Court Overturns 35 Years of

Products Liability Law:

The New Products Liability Cause of Action is a

“A Judicially Created Hybrid- a ‘Wart’”

By: Christopher S. Channel, Esq.

Changes in Products

Liability Law:

The PA Supreme Court

Overturns 35 Years of

Products Liability Law:

The New Products

Liability Cause of Action

is a “Judicially Created

Hybrid: ‘A Wart’”

By: Christopher S. Channel1_{, Esq.} On November 19, 2014, the

Pennsylvania Supreme Court issued a long-awaited decision that alters the strict products liability landscape in Pennsylvania. In Tincher v. Omega Flex,

Inc.2 _{, Chief Justice Castille authored an}

137-page opinion in which Justices Bear, Todd and Stevens joined, while Justice Saylor filed a concurring and dissenting opinion in which Justice Eakin joined. Realizing that, “it is now apparent that the first decade of applying the doctrine of strict liability in Pennsylvania offered a series of missed opportunities to develop a vibrant and coherent body of common law on the issue,”3 _{and that “decisional}

law has lapsed into an arguably unprincipled formulaic application of rhetoric,”4 _{the Supreme Court took the}

opportunity to explain the missteps and attempt to right the proverbial ship.

Being cautious to avoid the perceived mistake created by the bright-line rule of

Azzarello and Berkebile that attempted to

excise negligence principles and terms (such as foreseeability) from strict liability theory, the Court sought to offer

guidance and direction for the development of the strict products liability theory – rather than a rule. The Supreme Court created a new category of causes of action – the “wart” – by combining the balancing of interests inherent in both WArranty and toRT. Noting that “strict liability is a theory that effectuates a further shift of risk of harm onto the supplier than either negligence

While the

ramifications will be

many, the most

important points

are that the

Supreme Court

overruled Azzarello

rejected the

Restatement (Third)

of Torts, and

outlined a new

paradigm moving

forward.

or breach of warranty,6_{” and the strict}

liability theory “combin[es] the balancing of interest inherent in those two causes of action,7_{” the Supreme Court described}

the contours of the new strict products liability cause of action as follows:

I. Duty

“Stated affirmatively, a person or entity engaged in the business of selling a product has a duty to make and/or market the product – which ‘is expected to and does reach the user or consumer without substantial change in the

condition in which it is sold’ – free from ‘a defective condition unreasonably

dangerous to the consumer or [the consumer’s] property.”8

II. Breach of Duty

“To demonstrate a breach of duty in a strict liability matter, a plaintiff must prove that a seller (manufacturer or distributor) placed on the market a product in a ‘defective condition.”9

III. The Standard of

Proving “Defective

Condition” in the

Context of a

Design-Related Claim

The Supreme Court noted that “two standards have emerged, the purport to reflect the competing interests of

consumers and sellers, upon which all American jurisdictions judge the adequacy of a product’s design; one measures ‘consumer expectations,’ and articulates the standard from the

perspective of the reasonable consumer; the second balances ‘risk’ and ‘utility’, and articulates the standard more from the perspective of the reasonable seller.”11 _{The Court notes that the}

consumer expectations test derives from warranty-like principles, while the risk-utility test derives from negligence-type principles. The Court explained: “

(1) that the strict liability cause of action sounds in tort’; [and]

(2) that the notion of ‘defective condition unreasonably dangerous’ is the normative principle of the strict liability cause of action[.]12

Nevertheless, the Court held that “in Pennsylvania, the cause of action in strict products liability requires proof, in the

alternative, either of the ordinary

consumer’s expectations or of the risk-utility of a product.”13

A. Ordinary Consumer’s Expectations

“The consumer expectations test defines a ‘defective condition’ as a condition, upon normal use, dangerous beyond the reasonable consumer’s

contemplations.”14 _{The product is “in a}

defective condition if the danger is unknowable and unacceptable to the

average or ordinary consumer.”15 _The

product is not defective, if, “the ordinary consumer would reasonably anticipate and appreciate the dangerous condition of the product and the attendant risk of injury of which the plaintiff complains (e.g. a knife)”16 _{“The nature of the}

product, the identity of the user, the product’s intended use and intended user, and any express or implied representations by a manufacturer or other seller are among considerations relevant to assessing the reasonable consumer’s expectations.”17

B. Risk-Utility (Cost-Benefit) of a Product

Referring to the test balancing risk and utilities, or in economic terms, a cost-benefit analysis, the Court held that, “a product is in a defective condition if a ‘reasonable person’ would conclude that the probability and seriousness of harm caused by the product outweighs the burden or costs of taking precautions.”18

Stated otherwise, “a seller’s precautions to advert the danger should anticipate and reflect the type and magnitude of the risk posed by the sale and use of the product.”19 _{The Court noted, “the}

risk-utility test offers courts an opportunity to analyze post hoc whether a

manufacturer’s conduct in manufacturing or designing a product was reasonable, which obviously reflects the negligence roots of strict liability.”20 _{The Court noted}

Dean Wade’s articulation of factors relevant to the manufacturer’s risk-utility calculus, which follow:

(1) The usefulness and desirability of the product- its utility to the user and to the public as a whole. (2) The safety aspects of the product-

the likelihood that it will cause injury, and the probable

seriousness of the injury. (3) The availability of a substitute

product which would meet the same need and not be as unsafe. (4) The manufacturer’s ability to

eliminate the unsafe character of the product without impairing its usefulness or making it too expensive to maintain its utility. (5) The user’s ability to avoid danger

by the exercise of care in the use of the product.

(6) The user’s anticipated awareness of the dangers inherent in the product and their availability, because of general public knowledge of the obvious

condition of the product, or of the existence of suitable warnings or instructions.

(7) The feasibility, on the part of the manufacturer, of spreading the loss by setting the price of the product or carrying liability insurance.21

IV. Risk Utility is a

Question for the Jury,

Not a Question of

Law for the Judge

The Court rejected Azzarello’s

requirement that the trial court balance the risk and utilities.“22 _{Going forward,}

consistent with this decision, when a plaintiff proceeds on a theory that implicates a risk-utility calculus, proof of risks and utilities are part of the burden to prove that the harm suffered was due to the defective condition of the product. The credibility of witnesses and

testimony offered, the weight of the evidence relevant to the risk-utility calculus, and whether a party has met the burden…are issues for the finder of fact[.]”23

V. The Burden of

Proof

The Court reiterated that the burden of proof is sustained by a preponderance of the evidence.24 _{The Court entirely punted}

on the issue of whether the burden shifts from plaintiff to defendant in a risk-utility analysis. The Court seemingly cited with approval the Barker decision which shifted the burden to the defendant, but then noted that “whatever may be the merit of the Barker court’s concerns, countervailing considerations may also be relevant.”25 _{The Court listed a number}

of point-counterpoint interests and ultimately held, [t]hese interests, and

others that we may not perceive, are implicated in answering the question of whether the burden should be on the plaintiff or on the defendant, generally or in particular cases involving a risk-utility theory. The ultimate answer to the question best awaits balancing in an appropriate case, specifically raising the question, with attendant briefing from the parties.”26

VI. What Effect Will

Tincher Have?

While it is much too early to predict the impact of Tincher on the products liability landscape in Pennsylvania, it is apparent that Pennsylvania has moved away from the Azzarello/Berkebile mandate that negligence concepts have no place in the strict products liability rubric. It is clear that under either the consumer

expectation test or the risk-utility test, reasonableness has entered the

conversation. Skilled and knowledgeable trial counsel will be an absolute necessity as parties “test the waters” under the new standard. It is entirely conceivable that a defendant’s counsel will have to prepare for trial while facing the uncertainty of whether the plaintiff is advancing a consumer expectations, or a risk-utility claim, or both, coupled with the uncertainty of who bears the burden. Skillful advocacy will be required in addressing the myriad evidentiary issues that will necessarily arise. Lastly, the crafting and defense of appropriate points for charge will be assessed on a case-by-case basis and will require zealous advocacy.

Christopher S. Channel

Christopher Channel is a Partner in the Litigation and Environmental, Safety & Toxic Torts Practice Group. He is an experienced trial lawyer who has defended industrial manufacturers and business owners in claims involving allegations of toxic substances, defective products, premises liability and negligence.

During the course of his career, Chris has represented members of the natural resources industries in matters impacting their business. He regularly represents parties in protecting their intellectual property through trademarks, copyrights, trade secrets and covenants not-to-compete and has experience in alternative dispute resolution.

Chris works diligently to understand the client’s business goals and works in close communication with his clients to develop the most effective litigation strategy.

Prior to joining Leech Tishman, Chris was a shareholder at Babst Calland Clements and Zomnir, P.C.

Academics

J.D., Marshall-Wythe School of Law, College of William & Mary B.A., West Virginia Wesleyan College

Court Admissions

Pennsylvania West Virginia

U.S. Court of Appeals, Third Circuit

U.S. District Court, Western District of Pennsylvania U.S. District Court, Northern District of West Virginia U.S. District Court, Southern District of West Virginia

Experience

Babst Calland Clements and Zomnir, P.C.

Professional Memberships

American Bar Association Pennsylvania Bar Association The West Virginia State Bar

Allegheny County Bar Association (Secretary and Executive Committee, Civil Litigation Council)

Professional Accolades

Publications

Channel, Christopher S., “The Twisted Path of the Music File-Sharing Litigation: The Cases That Have Shaped the Litigation and the RIAA’s Litigation Strategy,” Intellectual Property and Technology Law Journal, Vol. 16, Number 10, October 2004.

Speeches and Presentations

Allegheny County Bar Association

Carnegie Mellon University, Current Issues in Cyber Law

Community Involvement

Litigation

Leech Tishman’s Litigation Practice Group is comprised of lawyers with years of hands-on experience trying cases in the courtroom and before administrative bodies and arbitration panels. We are focused litigators and trained to respond to the inquiries of judges and juries with accuracy, clarity and brevity. Our team has experience in handling a variety of complex commercial litigation matters locally, nationally and internationally for emerging enterprises to multi-national corporations in a wide range of industry sectors. Understanding the time, effort and cost involved in litigation, we work, when possible, through engagement in active negotiation with the opposing party or through alternative dispute resolution proceedings.

Leech Tishman’s lawyers have a wealth of trial experience at the local, state, federal and appellate level. We have argued before every appellate and federal court in Pennsylvania as well as the U.S. Supreme Court. Our lawyers have held clerkships in the Supreme Court of Pennsylvania, the Superior Court of Pennsylvania, and in U.S. Courts of Appeal.

Our Litigation Practice Group focuses on commercial disputes, including prosecution and defense of the following types of litigation:

+ Business Ownership Disputes + Corporate Governance Matters

+ Business Dissolution/Successor Liability + Fraud/Misrepresentation

+ Commercial Property Disputes + Insurance Coverage Litigation + Breach of Fiduciary Duty + Healthcare Litigation + Media Litigation

+ Construction Litigation + Trade Secret Disputes + Municipal Law Litigation + Requests for Injunctive Relief + Declaratory Judgment

+ Oil and Gas Litigation

+ Commercial Disparagement/Libel + Employment Ligation

+ Estate Administration Litigation + Real Estate Related Litigation + Class Actions

+ False Claims Act Cases

+ Open Records Matters/Sunshine Act Litigation + Antitrust Claims

+ Unfair Competition + Product Liability

1 _{The author is Christopher S. Channel, Esq. a partner in Leech Tishman’s Pittsburgh office. He can be reached at}

(412) 261-1600. Leech Tishman’s attorneys are well versed in Pennsylvania’s product liability law, having defended claims on behalf of automobile, wood products, heavy equipment, medical device, medical supply, chemical supply, and mining equipment manufacturers and/or distributors.

2 _{No. 17 MAP 2013, 56 (Pa. Nov. 19, 2014)}

3 _{Tincher v. Omega Flex, Inc., No. 17 MAP 2013, 56 (Pa. Nov. 19, 2014)}

4 _{Id. at 79}

5 _{Azzarello v. Black Bros. Co., 391 A.2d 1020 (Pa. 1978) was the seminal Pennsylvania products liability case which}

held that negligence principles have no place in a strict products liability trial, and required the judge, rather than the jury, to engage in a balancing of the risk-utility of a product so that a trial before a jury would focus solely on whether the product itself lacked any feature necessary to make it safe.

6 _{Id. at 121}

7 _Id.

8 _{Accord RESTATEMENT (2D) OF TORTS §402A(1). Id. at 88}

9 _{Id. at 89}

10 _{The Tincher decision is limited to a design defect claim by the facts of the matters, “albeit the foundational}

principles upon which [it] touches[es] may ultimately have broader implications by analogy.” Id, at 90, footnote 22.

11 _{Id. at 94}

12 _{Id. at 118}

13 _{Id. at 119 (emphasis added).}

14 _{Id. at 94}

15 _{Id. at 95 (citations omitted). This iteration of the test begs the questions: What evidence of whether a danger is}

unacceptable to the average consumer is admissible? And, if such evidence is a required component of the Plaintiff’s burden of proof, must a Plaintiff come forward with evidence akin to the survey evidence required in some trademark cases to demonstrate whether a danger is unacceptable to the average or ordinary consumer?

16 _{Id. (citations omitted).}

17 _{Id. (citations omitted). These considerations again beg the question: Are a manufacturer’s disclaimers of express}

and implied representations also relevant?

18 _{Id. at 98}

19 _{Id. at 98-99 (citations omitted).}

20 _{Id. at 99} 21 _Id. 22 _{Id. at 129-132.} 23 _{Id. at 131-132.} 24 _{Id. at 133-134.} 25 _{Id. at 134.} 26 _{Id. at 135}