March 21, 2013
James Beck: "Using Reott's Shiny New Strict Liability Defense"
In Reott v. Asia Trend, Inc., 55 A.3d 1088 (Pa. 2012), the Pennsylvania Supreme Court once again dodged the existential question of Second versus Third Restatement, because the plaintiff’s manufacturing defect claim was subject to a “strict” liability standard even under the Third Restatement. See Id. at 1101-02 (Saylor, J. concurring) (discussing how “strict products liability was originally fashioned with manufacturing defects in mind”). Instead the court addressed, for the first time, the role that plaintiff conduct played in proof of causation in a strict liability case under Restatement (Second) of Torts §402A (1965).
In Reott the product, a tree stand intended as a hunter’s aerial perch, was manufactured without its proper double stitching. When the plaintiff attempted to “set” the tree stand (remove slack from the straps) by bouncing on it, the stand collapsed and the plaintiff fell to the ground. 55 A.3d at 1090-91. At trial, the plaintiff received a directed verdict on the manufacturing defect, which was essentially uncontested. Id. at 1091. The defendant contested causation, arguing that the plaintiff’s method of setting the tree stand, not the defect, had caused the accident. Id. The plaintiff claimed that under strict liability, all evidence of his conduct was inadmissible. The trial court allowed the jury to consider the plaintiff’s conduct as evidence of causation:
The court . . . permitted that question [causation] to go to the jury. [Defendant] presented evidence to the jury that [plaintiff’s] self-taught “setting the stand” maneuver constituted highly reckless conduct, which negated . . . the defect in the [product]. . . . [T]he jury returned a verdict in favor of [defendant].
Id. The Superior Court reversed, holding that “the evidence introduced at trial was insufficient as a matter of law to support [defendant’s affirmative defense of highly reckless conduct. Id. at 1093.
At the Supreme Court, plaintiff argued that in strict liability, it was error to introduce evidence of plaintiff conduct – since comparative negligence was not a defense – even on the question of causation. The Supreme Court, disagreed and for the first time held that there are circumstances under which plaintiff conduct is admissible in strict liability.
The defense that the Supreme Court recognized, which had been sporadically permitted in intermediate appellate decisions for decades, was more stringent than mere comparative fault. First of all, it is an affirmative defense upon which the defendant bears the burden of proof:
[W]e hold that a defendant in a Section 402A action must plead and prove, as an affirmative defense, that the plaintiff acted in a highly reckless manner, if such conduct is asserted.
Reott, 55 A.3d at 1101. As an affirmative defense, highly reckless plaintiff conduct must also be pleaded. Id. at 1100.
Second, the defense is similar to assumption of the risk (although lacking the element of subjective understanding), in that the “highly reckless” conduct must – if believed by the jury – amount to the “sole cause” of the accident:
This accepted definition of highly reckless conduct exemplifies that a defendant can affirmatively plead and prove “sole cause,” i.e., that a curing of any defect would not have prevented the injury because only the plaintiff's conduct caused the injury; or “superseding cause,” i.e., that the plaintiff acted in such an outrageous and unforeseeable fashion that the conduct superseded any “but for” or legal causation the product contributed to the injuries.
Id. at 1100. “[B]ecause highly reckless conduct, by its very nature, is that which is essentially unforeseeable and outrageous, if it truly exists in a case, it must be the cause of the injuries sustained.” Id. at 1101 (emphasis added).
The Court justified its relatively strict version of a causation defense in strict liability as a way to prevent defendants from turning it into the equivalent of the now-prohibited defense of comparative/contributory fault:
[U]nder Pennsylvania's scheme of products liability, evidence of highly reckless conduct has the potential to erroneously and unnecessarily blend concepts of comparative/contributory negligence with affirmative proof that a plaintiff's assumption of the risk, product misuse, or, as styled herein, highly reckless conduct was the cause of the injury. Indeed, without some further criteria, highly reckless conduct allegations by defendants could become vehicles through which to eviscerate [strict liability] by demonstrating a plaintiff’s comparative or contributory negligence.
Id. at 1098. Practically as an afterthought, the Court affirmed, on grounds that the evidence did not establish the defense (there being no proof that a non-defective stand would have collapsed in a similar manner). Id. at 1101.
Thus, after Reott defendants now have an affirmative causation defense, based on the plaintiff’s “highly reckless” conduct, in strict liability cases. To the extent it can make out a jury submissible case, the defense can introduce such conduct by the plaintiff. The question thus arises, what kind of conduct can meet that test. The most immediate answer lies in prior precedent, and not just cases asserting reckless conduct in the lower courts. Given similarities that the Court noted between reckless conduct, superseding cause, and product misuse, conduct creating any of these defenses probably creates them all.
We suspect that the most significant fact pattern would be that found in Davis v. Berwind Corp., 690 A.2d 186 (Pa. 1997). In Davis the Pennsylvania Supreme Court held as a matter of law that it was unforeseeable for someone to fail to follow explicit product warnings – because it would defy “common sense” and make any warning “meaningless”:
As evidence of foreseeability, Appellant asserts [that] the instruction manual accompanying the [product] cautioned against [what actually occurred in the case]. . . . We find untenable the proposition that a manufacturer must anticipate that a specific warning not to operate a product without a safety device indicates to a user that the product could, in fact, be operated without the safety feature. Such conclusion defies common sense. It also renders warnings of any nature meaningless since the manufacturer must anticipate that the user will engage in the precise conduct which the warning cautions against.
Id. at 190-91 (emphasis added). A great many product liability suits these days arise from someone (sometimes the plaintiff, sometimes as in Davis, an intermediary such as an employer) disregarding a warning. Prior to Reott, plaintiffs attempted to exclude such proof as “negligence evidence.” But given this holding in Davis that failure to follow an express warning is ipso facto unforeseeable, at minimum after Reott a jury submissible, case of “reckless conduct” is created on such facts.
Other cases have found a variety of other conduct by plaintiffs to be “highly reckless.” Daddona v. Thind, 891 A.2d 786, 810-11 (Pa. Commw. 2006) (failure to use available safety device, among several other things); Coffey v. Minwax Co., 764 A.2d 616, 621 (Pa. Super. 2000) (use of electricity in presence of inflammable fumes); Frey v. Harley Davidson Motor Co., 734 A.2d 1, 6-8 (Pa. Super. 1999); Madonna v. Harley Davidson, Inc., 708 A.2d 507, 508-09 (Pa. Super. 1998) (driving while intoxicated); Gallagher v. Ing, 532 A.2d 1179, 1182 (Pa. Super. 1987) (same); Foley v. Clark Equipment Co., 523 A.2d 379, 394 (failure to watch where plaintiff was driving); Keirs v. Weber National Stores, Inc., 507 A.2d 406, 409 (Pa. Super. 1986) (not changing out of gasoline-soaked clothing); Gottfried v. American Can Co., 489 A.2d 222, 227 (Pa. Super. 1985) (sticking hand without looking into jagged container); Bascelli v. Randy, Inc., 488 A.2d 1110, 1114 (Pa. Super. 1985) (speeding in excess of 100 m.p.h.); Moyer v. United Dominion Industries, Inc., 473 F.3d 532, 542-45 (3d Cir. 2007) (gross failure to maintain product) (applying Pennsylvania law); Wilson v. Vermont Castings, Inc., 170 F.3d 391, 395-96 (3d Cir. 1999) (failure to read owner’s manual; standing near open flame in loose clothing). Defendants ought to be able to assert the Reott defense, and thus expose the jury to a plaintiff’s product-related misconduct, in any case presenting analogous facts – provided that the defendant can create a jury question as to the existence of the facts.
This is not to say that, in any such case, a defendant is necessarily entitled to prevail. The “highly reckless” conduct defense, as articulated in Reott, appears to be a rather demanding defense. But at least until Pennsylvania formally abandons its extremely strict version of strict liability, evidentiary hurdles exist that plaintiffs exploit to exclude “negligence” evidence. Until Reott, plaintiffs at least had an argument that a plaintiff’s conduct, even when bearing on causation, was such evidence – because in other circumstances it could also be used to prove comparative/contributory fault. After Reott, the dispute in no longer whether such evidence is relevant, but only whether the facts establish sufficient recklessness. That, at least, is a step forward.
--James Beck; Reed Smith, Philadelphia, PA; Drug & Device Law Blog
March 20, 2013
Blogger Guest Blogger Series
Starting tomorrow, we begin a series for guest bloggers who already blog on torts at other sites. We have a nice mix of plaintiff-oriented and defense-oriented bloggers. The posts will always appear on Fridays, but not necessarily consecutive Fridays. Enjoy!
The first in the new guest blogger series is authored by James Beck of Drug and Device Law Blog. Beck is counsel in Reed Smith's Philadelphia office. He handles complex personal injury and product liability litigation. He has overseen the development of legal defenses, master briefs, appellate briefs, and dispositive motions in numerous high-profile mass torts. He has also filed more than 60 appellate amicus curiae briefs, mostly on product liability issues. In 2011, he received the Product Liability Advisory Council's John P. Raleigh Award, the highest honor given to an organization member. He is the lead author of the ALM treatise Drug and Medical Device Product Liability Litigation Deskbook. Since 2006, Mr. Beck has been the lead blogger and co-host of the "Drug and Device Law Blog," which has been awarded the ABA's "Top 100" legal blog status for each of the last four years.
--SBS & CJR
Kochan on Property, Contract, and Tort
Donald Kochan (Chapman) has posted to SSRN The Property Platform in Anglo-American Law and the Primacy of the Property Concept. The abstract provides:
This Article proposes that the property concept, when reduced to its basic principles, is a foundational element and a useful lens for evaluating and understanding the whole of Anglo-American private law even though the discrete disciplines — property, tort, and contract — have their own separate and distinct existence.
In this Article, a broad property concept is not focused just on things or on sticks related to things but instead is defined as relating to all things owned. These things may include one’s self and all the key elements associated with this broader set of things owned — including the right to exclude, ownership, dominion, authority, and the sic utere maxim — normally segregated to our discussions of property law but that should be considered equally necessary to contract and tort law.
In examining these property concepts, this Article goes further to contend that ownership in the self has a vital place in the property discussion. Every legal system must decide the level of protection or recognition of property in the self before it can make any decision on what rules to create in relation to real property, tort or contract. The rules in all three develop on their own but each can be measured from their consistency or deviation from a starting base of absolute property ownership in the self. Once we understand that the platform for each of these areas of law is based in the property concept, so too can we then have a metric for discussion to evaluate deviations from pure property principles that develop in each doctrine (or separate discipline) thereby allowing us to also isolate the most unique characteristics attributable only to a discrete subject like contract or tort. But understanding that the property concept is at the base of all three legal species — property, contract and tort — is nonetheless the necessary starting point for an understanding of any of them.
March 19, 2013
Teaching Insurance in 1L Torts Classes
Randy Maniloff of White & Williams writes a free bi-weekly insurance news letter, Coverage Opinions. In his latest issue (pdf), Maniloff explored whether insurance liabilty coverage should be covered within the first-year Torts class. He asked a third year student at Penn to analyze how Katko v. Briney (the infamous spring gun case) would have played out if the Brineys had homeowners insurance coverage. Very interesting and worth a read.
March 17, 2013
Leslie Kendrick: "The Impossibility of Impossibility Preemption"
When the Supreme Court hears oral argument in Mutual Pharmaceutical Co. v. Bartlett, it will embark on its third elaboration of “impossibility preemption” in the prescription-drugs context. This line of cases is reshaping preemption doctrine, and it is doing so with little regard for a basic legal idea: the distinction between a property rule and a liability rule.
The question at issue is whether it is “impossible” for prescription drug manufacturers to comply with both Food & Drug Administration requirements and state tort law. State tort liability for design defect or failure-to-warn is predicated on a judgment that a drug or drug label was not designed safely. But manufacturers generally cannot alter drugs or labels without FDA approval. Thus, manufacturers argue, it is impossible for them to comply with both tort law and FDA requirements.
The Supreme Court implicitly accepted this view in 2009’s Wyeth v. Levine, when it found no impossibility preemption of a failure-to-warn claim against Wyeth. The Court rested this conclusion on the view that, under FDA regulations, Wyeth could have changed its drug’s warning label without prior FDA approval. Wyeth thus could have avoided tort liability while complying with FDA rules.
This analysis was always dubious: labeling changes ultimately require FDA approval, and thus a manufacturer’s power to make unilateral changes is short-lived and mostly hypothetical. But there soon arose a side effect which the majority in Wyeth, led by Justice Stevens, surely neither foresaw nor intended. To the extent that the power to make unilateral changes exists at all, it is enjoyed only by brand-name manufacturers and not by makers of generic drugs.
Thus when, in PLIVA, Inc. v. Mensing, the manufacturer of a generic drug made an impossibility preemption claim, the Court sprang the trap it had set in Wyeth. If impossibility was avoided only to the extent that manufacturers could change their labels, then impossibility must exist with respect to generic drugs.
In Mutual Pharmaceutical Co. v. Bartlett, the Court is being asked to extend this analysis to preempt some suits against generic manufacturers for design defects. And the United States, for its part, appears to ask the Court to feel free to endorse this rule for all design-defect claims, for both generic and brand-name drugs, on the theory that no manufacturer can alter the substance of its drug without FDA approval. What started as a ground for rejecting preemption in Wyeth is now poised to eliminate virtually all tort liability for prescription drug manufacturers, all in the name of “impossibility.”
But if we know one thing about tort law, we know that it is not impossible to comply with it and FDA requirements simultaneously. We know this because drug manufacturers have been complying with both since the passage of the Federal Food, Drug, and Cosmetic Act in 1938.
Moreover, anyone briefed in the most basic attributes of tort liability and FDA regulation can explain why. Tort liability requires manufacturers to pay damages, not to alter their products. A manufacturer may market a drug as approved while paying tort damages. The manufacturer has other options, such as seeking to modify a drug or label, or developing improved products. But it is entirely possible to change nothing and comply with both sets of laws.
These facts cannot have escaped the Court’s notice but may seem too mundane, or too literal, to matter. The Court focuses exclusively on the “duty” imposed by FDA and tort rules. FDA requires a drug or label to have a certain content, and the implication of tort liability is that it should have a different content. Hence, impossibility.
But in focusing on duties to the exclusion of remedies, the Court is disregarding the fundamental distinction between a property rule and a liability rule. FDA regulation subjects drug manufacturers to a property rule: drugs must conform to FDA requirements or be recalled from the market. Tort liability, meanwhile, is the classic liability rule: the remedy for breach is the payment of damages.
It is no coincidence that FDA’s powers function like a property rule. The point is for FDA to decide which drugs can be marketed and which cannot. Nor is it a coincidence that the state tort claims at issue are liability rules. Tort liability does not enjoin behavior. It charges a price, without altering other entitlements. It is not impossible for these two regimes to co-exist. It’s impossible that they couldn’t.
From this perspective, it also becomes clear that the so-called “stop-selling” doctrine at issue in Bartlett is not necessary to its resolution. The First Circuit held that there was no impossibility preemption because the drug manufacturer could comply with both regimes by not selling the drug. “Stop selling” may be a response when a product faces conflicting injunctions (e.g., “Do X or your product will be recalled,” and, “Do not-X or your product will be recalled.”). But the whole point of a liability rule is that the manufacturers need not stop selling in order to comply with it. They can pay and play.
This is not to say that no conflict may ever arise between tort law and FDA regulation. But impossibility is not the right term, under any plausible definition. It is not physically impossible to comply with both regimes. There is no inherent logical contradiction in them. Instead, the question is how much one gets in the way of the other.
The question thus involves the other form of implied preemption: obstacle preemption. The Court rejected obstacle preemption in the context of Wyeth. Available evidence suggests that Congress, in passing the FDCA, understood tort and FDA regulation not to conflict but to complement each other. FDA, throughout most of its history, has held the same position.
And there is good reason to adopt this view. Given the nature of drug trials and the FDA approval process, there is always a risk of side effects whose gravity only becomes clear after a drug is on the market. Drug manufacturers are generally in the best position to bear this risk, because they have more information about their drugs than either FDA or consumers and they have the ability to work with FDA to alter a drug or label. To adopt another Calabresian term, drug manufacturers are the cheapest cost avoider. Meanwhile, a system that immunizes drug manufacturers provides
suboptimal levels of deterrence.
We may worry, however, that tort liability will be so costly that it will cause drug manufacturers to raise prices to unaffordable levels, stop developing new products, or withdraw from the market entirely. Such possibilities could have serious public health consequences, and thus they are germane to the preemption question.
But this is an incidental effect of liability, not an indication of impossibility. To conclude
otherwise would suggest, for example, that the special immunities given to vaccine manufacturers are unnecessary. If it is impossible for all drug manufacturers to comply with regular FDA regulations and state tort law, then there is no need for special rules that treat the interaction of these two regimes as imposing particularly steep incidental costs on particularly necessary medications.
In short, whether tort law and FDA regulation conflict or complement each other is a question not of formalism but of facts on the ground. Either way, what is happening is not a question of impossibility. The Wyeth impossibility trap is one of the Court’s own devising, and the Court should extricate itself.
--Leslie Kendrick, University of Virginia School of Law
Guest Blogger Leslie Kendrick
Today's Guest Blogger is Leslie Kendrick, an Associate Professor at the University of Virginia School of Law. Kendrick received a B.A. in classics and English as a Morehead Scholar at the University of North Carolina at Chapel Hill. She received her master's and doctorate in English literature at the University of Oxford, where she studied as a Rhodes Scholar. In law school she served as essays development editor for the Virginia Law Review and received numerous awards, including the Margaret G. Hyde Award, the Hardy Cross Dillard Scholarship, the Law School Alumni Association Best Note Award, the Brown Award for Excellence in Legal Writing, the Food & Drug Law Institute H. Thomas Austern Short Paper Award, and the Virginia State Bar Family Law Book Award. Before joining the Virginia's faculty, Kendrick clerked for Judge J. Harvie Wilkinson III of the U.S. Court of Appeals for the Fourth Circuit and for U.S. Supreme Court Justice David Hackett Souter. She is currently visiting at UCLA.