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Third Circuit Seeks Help Deciphering Pennsylvania Strict Liability Law

June 12, 2020

Third Circuit Seeks Help Deciphering Pennsylvania Strict Liability Law

June 12, 2020

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After Chief Justice Saylor circulates his memorandum and recommends a disposition, the Court will decide, by a majority vote, whether to grant or deny the petition.

On June 2, 2020, the Third Circuit, sitting en banc, took the unusual step of asking the Pennsylvania Supreme Court to decide a novel question of state law on strict liability for defective products sold through e-commerce websites in a case that will shape the future of products liability and online sales. The case, Oberdorf v. Inc., No. 18-1041, involves a plaintiff’s purchase of an allegedly defective retractable dog leash from a third-party merchant using Amazon’s online platform. Through these third-party vendor arrangements, a merchant can list items for sale on Amazon’s website, but the merchant still stores, packages and ships the products; Amazon never takes title to or possession of the items sold through these arrangements. Nevertheless, the plaintiffs in this case seek to hold Amazon strictly liable for the injuries allegedly caused by the leash.

The Third Circuit recognized that Pennsylvania follows Section 402A of the Restatement (Second) of Torts, but could not decide how it applied in this case. In a previous panel decision, the court held that Section 402A, as interpreted by the Pennsylvania Supreme Court in Francioni v. Gibsonia Truck Corp., 372 A.2d 736 (Pa. 1977), requires an analysis of four factors to determine whether Amazon can be strictly liable in this case. The panel also determined that the four factors were satisfied here and, as a result, vacated the district court’s grant of summary judgment in Amazon’s favor. Judge Scirica, however, dissented, based on a different reading of Francioni. Under Judge Scirica’s reading of that case, the court never should have reached the four-factor test because Section 402A only comes into play if there is a threshold finding that the defendant is engaged in selling the kind of product at issue. And selling, in Judge Scirica’s view, requires either ownership or possession of the product. Because the undisputed facts demonstrated that Amazon had neither ownership nor possession, Judge Scirica would have affirmed the district court’s order granting summary judgment.

The Third Circuit agreed to hear the case en banc, but after oral argument determined that they could not resolve the appeal without first asking for assistance from the Pennsylvania Supreme Court. Specifically, the Third Circuit asked the Supreme Court to explain whether Pennsylvania’s strict liability law requires only an analysis of the four factors in Francioni, like the panel majority held, or first requires a threshold determination that Amazon was in the business of selling the kind of product at issue, as Judge Scirica opined. And if Judge Scirica was correct, the Third Circuit requested further clarification from the Supreme Court about how to analyze that threshold question. The Third Circuit therefore certified the following question to the Pennsylvania Supreme Court, stating that it is an issue of first impression and substantial public importance:

Under Pennsylvania law, is an e-commerce business, like Amazon, strictly liable for a defective product that was purchased on its platform from a third-party vendor, which product was neither possessed nor owned by the e-commerce business?

Oberdorf, No. 18-1041, 2020 WL 3023064, at *4 (3d Cir. June 2, 2020) (en banc).           

The Third Circuit’s certification petition will now go to Chief Justice Saylor of the Pennsylvania Supreme Court, who will prepare a memorandum for the other justices explaining the case and recommending whether the certification petition should be granted. Pa. Sup. Ct. I.O.P. § 8(B). Accepting a question for certification is a matter of discretion for the Pennsylvania Supreme Court and will only be granted in limited circumstances, such as where: (1) the “question of law is one of first impression and is of such substantial public importance as to require prompt and definitive resolution by the Supreme Court”; (2) “the question of law is one with respect to which there are conflicting decisions in other courts”; or (3) the “question of law concerns an unsettled issue of the constitutionality, construction, or application of a statute of this Commonwealth.” Pa.R.A.P. 3341(c). The Pennsylvania Supreme Court also generally refuses to accept certification of any questions unless it agrees that the case presents a pure question of law and the certifying court has not previously decided the question. Id.

After Chief Justice Saylor circulates his memorandum and recommends a disposition, the Court will decide, by a majority vote, whether to grant or deny the petition. Pa. Sup. Ct. I.O.P § 8(B). The Court aims to decide every certification petition within 60 days. Id. If the Court grants the petition, it will also decide whether it wants additional briefing on the certified issue and whether it intends to hold oral argument. Id. The Court also welcomes amici curiae briefs to assist it in deciding the certified question. Id. § 8(C). If the Supreme Court, however, denies the certification petition, the case will remain in the Third Circuit, and the en banc court will have to make its best prediction about how the Pennsylvania Supreme Court would have decided the issue.

Either way, the resulting opinion is likely to be important for any companies involved in e-commerce like Amazon and has the potential to reshape strict liability law for defective products in Pennsylvania.

For More Information

If you have any questions about this Alert, please contact Alyson Walker Lotman, Leah Mintz, any of the attorneys in our Products Liability and Toxic Torts Group, any of the attorneys in our Appellate Practice or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.