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3rd Circuit Court of Appeals Upholds Earlier Prediction Regarding Adoption of Third Restatement in Pennsylvania

In an opinion issued on July 12, 2011, the United States Court of Appeals for the Third Circuit held that a defendant in a products liability case can rely on evidence that a product satisfied the standards of the U.S. Consumer Product Safety Commission. In so holding, the court reaffirmed its ruling in Berrier v. Simplicity Manufacturing, Inc., 563 F.3d 38 (3d Cir. 2009), cert. denied, 130 S.Ct. 553 (2009), stating that federal district courts applying Pennsylvania law to products liability cases should look to sections 1 and 2 of the Third Restatement of Torts, as opposed to section 402A of the Second Restatement Torts.

In Covell v. Bell Sports, the plaintiffs' son was riding his bike to work in January 2007 when he was struck by an automobile entering a parking lot at Cardinal O'Hara High School. After settling a suit against the Archdiocese of Philadelphia, the plaintiffs filed a second suit against Bell, the manufacturer of the bike helmet, alleging that it failed to minimize their son's injuries.

At trial, the District Court looked to Berrier, wherein the Third Circuit Court of Appeals held that while the Supreme Court of Pennsylvania had not yet answered whether bystanders could recover on design defect claims, the Supreme Court would adopt the Restatement (Third) of Torts if confronted on the issue. Applying the Third Restatement, the District Court then permitted Bell to introduce expert testimony that was based in part upon the United States Consumer Product Safety Commission's Safety Standard for Bicycle Helmets (the "CPSC Standard"), an administrative regulation which provides guidelines for various helmet specifications. After experts offered by both parties agreed that the CPSC Standard was satisfied by Bell's helmet, the District Court instructed the jury, pursuant to the Third Restatement of Torts, that evidence of bicycle helmet industry standards such as the CPSC Standard, could be considered in the determination of whether the helmet was ultimately defective.

On appeal, the Covells argued that the Third Restatement of Torts should not have been applied by the District Court when instructing the jury and admitting evidence of the CPSC Standard, stating that the Second Restatement was actually the applicable Pennsylvania law.

Addressing the Covells' appeal, the court considered its recent holding in Berrier, wherein it decided that if confronted with the question, the Supreme Court of Pennsylvania would apply sections 1 and 2 of the Third Restatement of Torts to products liability cases. In accordance with this holding, the court noted that in products liability cases, Pennsylvania courts have traditionally looked to section 402A of the Second Restatement of Torts, which holds sellers strictly liable for harm caused to consumers by unreasonably dangerous products, irrespective of any negligence on the part of the seller, i.e. whether the seller exercised reasonable care. Despite this apparent segregation of strict liability and negligence analysis in Pennsylvania products liability cases, the court identified a longstanding and recurrent conflict within the Second Restatement, noting that often times "it is difficult or impossible to determine whether a product is 'unreasonably dangerous' to consumers without reference to evidence that the seller did or did not exercise 'care in the preparation' of the product." See Schmidt v. Boardman Co., 11 A.3d 924, 940 (Pa. 2011). According to the court, this conflict was addressed in the drafting of the Restatement (Third) of Torts §§ 1-2, which rejected the "no negligence in products liability" regime and instead held sellers liable only for the sale of products determined to be "defective" per three sets of criteria. Notably, this criteria incorporated concepts sounding in negligence, such as "foreseeable risk" and "care."

Notwithstanding the holding in Berrier, the Covells cited Bugosh v. I.U. North America, Inc., 942 A.2d 897 (Pa. 2008), wherein the petitioner sought a holding from the Supreme Court of Pennsylvania declaring the Third Restatement to be the law of Pennsylvania. The Court ultimately denied the appeal, and the Covells thereby argued that the Second Restatement was indeed the law in Pennsylvania. However, the Third Circuit rejected this contention, holding that because the appeal was denied on the grounds that it was improvidently granted, Bugosh appeal was not an intervening "authority" sufficient to revisit the holding in Berrier.

Noting Bugosh to be of "no consequence," the Third Circuit Court of Appeals held that absent a change in Pennsylvania law, there was no reason to upset the precedent established in Berrier. Thus, in upholding Berrier, the Covell District Court did not err in using the Third Restatement of Torts to both guide its decisions to admit evidence, and frame its jury instructions.

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