Pennsylvania Supreme Court Tosses $60 Million Verdict Against Building Products Manufacturer In Strict Products Liability

June 2006

BY: KIM KOCHER

The Pennsylvania Supreme Court has reversed a $60 million jury verdict in a products liability action against the manufacturer of PCBs for alleged contamination in a state office building in Department of General Services v. Monsanto Company, Nos. 173 & 176 MAP 2002 (May 25, 2006). The verdict followed a 16-month jury trial, the longest in Pennsylvania history. The Supreme Court ordered a new trial after eliminating over $150 million in potential damage claims. A victory for White and Williams litigator Thomas M. Goutman, and the firm’s Appellate Practice Group, the Court’s decision buttresses key tenets of strict products liability and property damage law in Pennsylvania.

Accidental Fire: An Intended Use?

Built in the 1960s, the office building incorporated building products, such as glue in the ductboard, containing PCBs manufactured by Monsanto Company. After a catastrophic fire in 1994, PCBs were spread throughout the building at allegedly dangerous levels. The trial court permitted the state to recover in strict liability for the resulting property damage without distinguishing between pre- and post-fire PCB contamination. Recognizing that incineration is not an intended use of a building product, the Supreme Court reversed. While acknowledging that it is reasonably foreseeable that building materials may be subject to accidental fire, the Supreme Court confirmed that foreseeability has no place in Pennsylvania strict products liability law. Rather, the Court clarified that a product manufacturer can only be held strictly liable for harm that occurs in connection with the intended use of a product.

Proof of Causation by Anecdotes, Stigma, Supposition?

Several years after the fire, the state decided to demolish the building. The trial court permitted the state to recover the cost of demolition based on the testimony of an environmental contractor and a public official. The Supreme Court reversed, finding that, in a building contamination case, the extent of necessary remediation is properly the subject of expert testimony. The Court rejected the contractor’s testimony as insufficient to establish causation because it was based solely on his anecdotal conclusion that PCB remediation was “difficult.” The Court also recognized that a public official’s subjective concerns about the stigma associated with building contamination is no substitute for informed expert opinion on the feasibility of remediation.

A 2006 Mercedes for a 1980 Chevrolet?

After demolishing the 30-year old structure, the state constructed a new state-of-the-art office building in its place. The trial court permitted the state to recover the value of the new office building as damages for the loss of the old building. By way of analogy, the trial court permitted the state to replace its totaled 1980 Chevrolet with a 2006 Mercedes. Finding that the trial court’s decision constituted an unprecedented authorization of a windfall, by failing even to take depreciation into consideration, the Supreme Court threw out the state’s replacement cost damage claim.

Conclusion

Building product manufacturers can now breath a little easier as a result of the Supreme Court’s decision. Because anything in a home or office will emit potentially harmful toxins when incinerated, if allowed to stand, the trial court’s decision would have effectively held all product manufacturers strictly liable. The trial court’s decision would have further eliminated the basic obligation of the plaintiff in a product defect case to prove via expert testimony that the defect caused his/her injury. Finally, if allowed to stand, the trial court’s decision would have undone a century of property damage law that limits recoverable damages to fair compensation. The Supreme Court thus reached a sensible decision that reins in the trial court’s dramatic expansion of strict products liability and property damage law in Pennsylvania.

Kim Kocher is Chair of the Appellate Practice Group. She can be reached at 215-864-6332 or kocherk@whiteandwilliams.com.Tom Goutman is Chair of the Litigation Department. He can be reached at 215-864-7057 or goutmant@whiteandwilliams.com.