The Third Circuit’s Curious, Non-Binding Dicta In The Sikkelee Product Liability Case
Pennsylvania law relating to product liability — i.e., whether the Second Restatement or Third Restatement of Torts applies — continues to be hotly disputed, an issue that came back up again with the Pennsylvania Supreme Court’s opinion in Reott v. Asia Trend. Reott involved a man who fell while trying to install a tree stand; in sum the Pennsylvania Supreme Court held that the burden is on a defendant in a products liability action to plead and prove as an affirmative defense that an injured party’s “highly reckless conduct” was the sole or superseding cause of the injuries.
As an article in The Legal Intelligencer explained, the case matters in situations beyond “highly reckless” plaintiffs because it was yet another example of that Court relying on the Second, rather than the Third, Restatement. It’s thus another confirmation of a point I made on this blog back in July while discussing the split in Pennsylvania strict liability law: “for decades the Pennsylvania Supreme Court has ruled that the Restatement (Second) of Torts applies. It has never held otherwise.”
Yet, although the Pennsylvania Supreme Court has never adopted the Third Restatement (and has turned down several opportunities to do so), the Third Circuit has oddly predicted that the Pennsylvania Supreme Court would do so. We’re thus stuck with the federal appellate court with jurisdiction over Pennsylvania commanding federal trial courts in Pennsylvania to apply a version of law that isn’t actually being applied in Pennsylvania.
All of that’s covered in my post from July, which was prompted by a Middle District of Pennsylvania opinion in Sikkelee v. Precision Airmotive Corp, a products liability case involving an airplane crash, which held that the Second Restatement still applied: in short, after the Third Circuit held in Covell that the Third Restatement was the law of Pennsylvania, the Pennsylvania Supreme Court again applied the Second Restatement (in Beard v. Johnson & Johnson, Inc., 41 A.3d 823 (Pa. 2012)). Sikkelee, 2012 U.S. Dist. LEXIS 91497 (M.D. Pa. 2012).
Then the already-strange situation became downright weird.
The defendants in Sikkelee filed for an interlocutory appeal, asking the Third Circuit to ignore Beard — and the thirty-plus years of Pennsylvania law preceding it — in favor of the erroneous prediction in Berrier and Covell. Attempting an interlocutory appeal off of a summary judgment order is a common tactic of defendants in serious cases, but it’s usually rejected. See Ortiz v. Jordan, 131 S. Ct. 884, 891 (2011)(“Ordinarily, orders denying summary judgment do not qualify as ‘final decisions’ subject to appeal.”)
Unsurprisingly, and correctly, a panel of Third Circuit judges declined the appeal:
The foregoing Petition for Permission to Appeal the District Court’s 07/03/2012 Order is denied. See Covell v. Bell Sports, Inc., 651 F.3d 357 (3d Cir.2011), cert. denied, U.S. , 132 S.Ct. 1541, 182 L.Ed.2d 162 (2012); Berrier v. Simplicity Manufacturing, Inc., 563 F.3d 38 (3d Cir.2009), cert. denied, U.S. , 130 S.Ct. 553, 175 L.Ed.2d 383 (2009); and Beard v. Johnson And Johnson, Inc.,41 A.3d 823 (Pa. 2012). Judge Fisher would grant the petition.
Sikkelee v. Precision Airmotive Corp., No. 12-8081, 2012 U.S. App. LEXIS 22069 (3d Cir. Sept. 14, 2012). The references to Covell, Berrier, and Beard without explanation are enigmatic, but such citations aren’t uncommon. It’s simply the panel pointing out that they are aware of the relevant cases at issue.
As I wrote before, Sikkelee is a significant case, and so the defendants charged forward on their appeal, and requested a hearing from the Third Circuit en banc. The Third Circuit, sitting en banc, “declined [the] request to accept an interlocutory appeal on a question of law specifically limited to the issue of whether the Pennsylvania Supreme Court would adopt the Restatements (Third) of Torts or continue its application of the Restatement (Second) of Torts.” Sikkelee v. Precision Airmotive Corp., No. 12-8081, 2012 U.S. App. LEXIS 22185 (3d Cir. Oct. 17, 2012). (Emphasis added, quotations omitted.)
Normally, when a Circuit Court declines to accept an interlocutory appeal, that’s the end of it. There’s no reasoning or explanation provided with the order, because such an analysis would be pointless dicta: the Circuit Court has declined to hear the case, and so is in no position to comment on its merits. The case will go forward in the District Court, and the issue will eventually be resolved on the appeal from the final judgment.
Back when the brouhaha broke out in Delaware between Chancellor Strine and the Delaware Supreme Court, I quoted a law review article for a working definition of dicta:
A holding is generally thought of as those parts of a judicial opinion that are “necessary” to the result. Dictum, on the other hand, is simply anything in a judicial opinion that is not the holding. But the distinction is more difficult to capture in practice than these narrow definitions suggest. In light of the problems created by the blurred holding/dicta distinction, a number of judges and scholars have attempted to create a more workable definition of “holding” than that “necessary to the result.” The majority of attempts fall within one of two camps: 1) a holding is limited to the facts plus the outcome; and 2) a holding includes the rationale or reasoning a court employs to reach a particular result.
(The quote is from Why Dicta Become Holdings and Why It Matters (2010)). Applying either of those definitions of “dicta,” when a federal appellate court declines to consider an interlocutory appeal, there’s no actual “result” at all — there’s no holding, no judgment, there’s just the appellate court letting the case proceed on its own course towards a final judgment in the district court, after which it can be appealed.
Which is why the Sikkelee decision is so disconcerting. The Third Circuit didn’t just deny the interlocutory appeal, but instead went much further to opine about its own predictions of Pennsylvania law:
We concluded in Berrier that ‘[if] the Pennsylvania Supreme Court were confronted with [the] issue, it would adopt the Restatement (Third) of Torts.’ Id. at 40. Thus, 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 precedential holding in Berrier, as set forth above, represents the Court’s view of Pennsylvania’s product liability law.
The Pennsylvania Supreme Court has not issued a definitive opinion on whether the Restatement (Third) of Torts or the Restatements (Second) of Torts and applies to strict liability and product defect cases. Accordingly, we will follow the precedent set out in Covell and Berrier.
The Third Circuit, though, did not actually “follow the precedent set out in Covell and Berrier,” like it said it would. Instead, the very next line of the opinion is also the last: “The petition for rehearing en banc and panel rehearing is hereby denied,” which means the Third Circuit didn’t decide any issue at all — it just denied the interlocutory appeal and tacked on a bunch of dicta to it.
That’s a problem for two reasons. First, it’s hard to ignore interpreting Sikkelee as the Third Circuit trying to take a shortcut to knock out a legal argument without bothering to hear a full appeal on it and issue a thoughtful opinion. Second, it’s hard to see how the Third Circuit even had jurisdiction to issue the dicta. As the Third Circuit noted decades ago:
[A]ppellate jurisdiction is something with which neither we nor the parties to an appeal can endow the court. Its scope is constitutionally committed to the discretion of Congress and, out of respect for that balance, we do not regard the convenience of the parties as a justification for blurring unnecessarily the lines Congress has drawn.
Bensalem v. Am. Fid. Fire Ins. Co., 644 F.2d 990, 994 (3d Cir. 1981). In other words, the Circuit Courts can’t act except where Congress has granted them jurisdiction to act.
Indeed, the Circuit Courts routinely quash interlocutory appeals for a lack of jurisdiction, reasoning that, “because we are a court of limited jurisdiction, we are obliged to raise the issue sua sponte. Therefore, we will only reach the merits of the appeal if we can first satisfy ourselves that the District Court’s [order to be appealed] qualifies as a ‘final decision’ under [28 U.S.C.] § 1291.” Keene v. Delape (In re Isolagen Inc. Sec. & Derivative Litig.), 279 Fed. Appx. 133, 134 (3d Cir. 2008)(citations omitted)(denying interlocutory appeal for lack of jurisdiction).
Usually, there’s only one road to an interlocutory appeal in a product liability case in federal court, and that’s by using 28 U.S.C. § 1291 — but it only grants federal appellate courts jurisdiction over “final decisions,” which the order in Sikkelee plainly was not. It was simply a summary judgment ruling. There are rare exceptions, but neither the Third Circuit panel nor the Third Circuit en banc applied any of them. Which leaves the obvious question: what should a lower court do when a higher court’s issues not just dicta, but dicta plainly outside its jurisdiction? I’ve been following the case since then; the defendant filed a motion for reconsideration, the plaintiff filed a response, then, this week, one of the defendants filed for bankruptcy… which means it will be a long while until we know.
Of course, this whole mess could be avoided if the Third Circuit revisited Covell and Berrier, admitted its prediction was wrong, and continued applying the Second Restatement of Torts, which has been the law of Pennsylvania for over 30 years.