Judge Adds to Restatement Rift Among Federal Courts in State

, The Legal Intelligencer

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Against an increasingly strong current of U.S. Court of Appeals for the Third Circuit decisions, a Western District of Pennsylvania judge, predicting the Pennsylvania Supreme Court will continue to follow the Restatement (Second) of Torts, has applied it in a products liability case filed against Ford.

Although the Third Circuit has twice predicted that the state court would adopt the Restatement (Third) of Torts and it shored up its direction to district courts that they should apply that standard late last year, U.S. District Judge Arthur Schwab decided to stand by his application of the Second Restatement.

"The order by the United States Court of Appeals for the Third Circuit in Sikkelee was nonprecedential, and this court is not bound by nonprecedential decisions," Schwab said, referring to the Third Circuit's en banc opinion in Sikkelee v. Precision Airmotive.

The appeals court issued that order last October after defense attorneys in an airplane crash case petitioned for a rehearing from the court after it declined to consider a Middle District of Pennsylvania judge's opinion applying the Restatement (Second).

While the appellate court wouldn't accept an interlocutory appeal on the issue, it decided that it would follow its own precedent predicting that the Third Restatement would be chosen because the Pennsylvania Supreme Court hasn't yet said definitively which Restatement applies.

Twice before — in Covell v. Bell Sports and Berrier v. Simplicity Manufacturing — the Third Circuit predicted that the state Supreme Court would make the Third Restatement the law in Pennsylvania.

"We held that federal courts sitting in diversity and applying Pennsylvania law to products liability cases should look to Sections 1 and 2 of the Restatement (Third) of Torts," the order in Sikkelee said. "The precedential holding in Berrier ... represents the court's review of Pennsylvania's products liability law. The Pennsylvania Supreme Court has not issued a definitive opinion on whether the Restatement (Third) of Torts or the Restatement (Second) of Torts applies to strict liability and product defect cases. Accordingly, we will follow the precedent set out in Covell and Berrier."

However, Schwab cited the Pennsylvania Supreme Court's 2011 opinion in which it declined to adopt the new standard for torts, saying, "This court is free to stand by its position that Beard v. Johnson & Johnson is contrary to Covell v. Bell Sports."

Beyond the fact that the Sikkelee order wasn't precedential and, thus, not binding, Schwab noted also that the state Supreme Court issued an opinion shortly after the Third Circuit issued that one in Reott v. Asia Trend, in which it relied on the Restatement (Second), not the Restatement (Third).

"Therefore, there has been no change in controlling law since this court's order," Schwab said, referring to his February 27 order declaring that the Second Restatement would apply. "There is no new evidence available to the court, nor was the court's order in clear error of the law," he said, denying Ford's motion for reconsideration.

Ford had argued that the court had "overlooked" controlling precedent from the Third Circuit when it issued that order, according to its memorandum of law supporting the motion. It cited the Third Circuit's order in Sikkelee, which prompted the Middle District of Pennsylvania judge presiding over that case to reconsider his application of the Restatement (Second).

Last fall, Schwab applied the Second Restatement to a separate case, Konold v. Superior International Industries, which was dismissed by joint stipulation within two weeks after that order was issued.

Over the course of the last year, the Third Circuit weighed in on Schwab's judgment in four cases — it reversed his decision to vacate an arbitration award, reassigned a high-profile antitrust case to another judge, ordered a new trial in a case where Schwab hadn't vetted material before allowing it to be shown to a jury, and strongly suggested that he amend the time limits he had set for each side's presentation at an upcoming trial.

In 2004, the appeals court issued a stiff rebuke to Schwab after concluding that defense lawyers had submitted a proposed opinion that Schwab adopted nearly verbatim as his own.

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