In Hoffman v. Paper Converting Machine Co. , No. 08-3012, 2010 WL 845984 (E.D. Pa. March 3, 2010), the Plaintiff injured himself when using a printing press, amputating fingers on his right hand. He sued in federal court. The defendants moved for summary judgment. The initial issue in the decision relates to the proper substantive law for decision. Even though a federal court sitting in diversity applies substantive state law, the federal court may still be forced to speculate what a state court might do when state law is nebulous on the issue at hand. The district court, per the case discussed below, ruled that the Third Restatement was the standard of decision, and it decided various issues raised in the summary judgment motion.
In Berrier v. Simplicity Manufacturing, Inc., 563 F.3d 38 (3d Cir. 2009) [PDF], the Third Circuit was confronted with the issue of whether Pennsylvania courts would adopt the principles of the Third Restatement of Torts. The Third Circuit had some pretty strong indications (a pending case before the Pennsylvania Supreme Court) that the Pennsylvania Supreme Court was going to move to the liability scheme found in the Third Restatement, so the Third Circuit made that prediction. It turned out that the Pennsylvania Supreme Court dismissed the pending appeal as improvidently granted, and, therefore, Pennsylvania, for the time being, still adheres to the Second Restatement.
In Hoffman, the Plaintiff preferred the Second Restatement, while Defendants sought the application of the Third. Deciding between the Second and Third Restatement is a big decision, since each presents a different definition of a product defect, and in a products liability action, the definition of defect is likely to come up at some point in the proceedings. But there really was no decision to be made:
[A] district court is bound by Third Circuit precedent on state law issues unless a subsequent decision by the highest state court diverges from Third Circuit precedent.
Hoffman at *3. The district court ruled that the Third Restatement was the standard of decision, and it decided the various issues related to the summary judgment motion, granting it in part and denying it in part.