Third Restatement Comes In First in Pennsylvania

Over the course of the past year, I have become quite accustomed to the federal government telling me that it knows what is best for me, regardless of what actually may be best for me. Depending on which side of the aisle you stand, you may revel in the audacity of hope, or just simply marvel at the audacity of your political opponents. But we need not sink into the ether of partisanship; not this day – not when there is jurisprudence to be discussed. As will be seen in the coming months, in our land of multiple sovereigns, the judiciary too walks a delicate line among competing interests. As an example of that trend, the Eastern District of Pennsylvania recently authored an opinion illustrating the unique nature of our system.

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.

Defendants, pay attention. You can now do some forum shopping of your own, deciding whether to stay in state court, or remove to federal court, depending on which liability scheme is favorable to you. If you decide to remove, don’t forget about Iqbal and Twombley. As much as I would love to pontificate a potential law school exam question on this, I think I’ll just make the point that, in the short term, plaintiffs in Pennsylvania will have to pay attention to their products cases (including potential CAFA jurisdiction) to ensure that they get to apply Pennsylvania substantive law, at least in the short term, or in the alternative, prepare their complaints to survive a motion to dismiss under either standard. For the time being, in federal court, Pennsylvania state law is not really Pennsylvania state law.

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