Pennsylvania Supreme Court Tosses $60 Million Verdict Against Building Products Manufacturer in Strict Products Liability
In a remarkable reversal, the Pennsylvania Supreme Court has narrowed the range of liability exposure facing manufacturers of building products and materials. In Department of General Services v. Monsanto Company, the high court threw out a $60 million verdict from a 16-month marathon jury trial, the longest in Pennsylvania history. The Supreme Court ordered a new trial after it eliminated over $150 million in potential damage claims. The Court’s decision buttresses key tenets of strict products liability and property damage law in Pennsylvania.
Accidental Fire: An Intended Use?
Department of General Services arose from a catastrophic 1994 fire of the twelve-story state Transportation and Safety building in Harrisburg, Pennsylvania. Built in the 1960s, the office building incorporated building products (such as glue in the ductboard) which contained polychlorinated biphenyls (PCBs) manufactured by Monsanto Company. After the fire, PCBs spread throughout the building at allegedly dangerous levels. The trial court permitted the Commonwealth to recover in strict liability for the resulting property damage without distinguishing between pre- and post-fire PCB contamination.
The Supreme Court reversed. It recognized that incineration of building materials is not an “intended use” of the building products. 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 Commonwealth elected to demolish the Transportation and Safety building. Based on the testimony of an environmental contractor and a public official, the trial court permitted the government to recover the cost of demolition. The Supreme Court reversed, finding that in a building contamination case, the extent of necessary remediation is properly the subject of expert, not lay, 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 Commonwealth 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. In essence, 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 to even take into consideration concepts of depreciation), the Supreme Court threw out the state’s replacement cost damage claim.
The trial court’s view of the law would have held all product manufacturers strictly liable for harm caused by potentially harmful toxins emitted when the products burn in a fire. 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 its 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. The case demonstrates the value of a strong pre-trial development of the facts, persistence throughout an arduous trial, and articulate appellate advocacy. Building product manufacturers can now breath a little easier as a result of the Supreme Court’s decision.