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From Products Liability Law Daily, February 20, 2018

Faulty jury instruction warrants new trial for steel tubing maker in design defect case

By Susan Engstrom

The manufacturer of steel tubing used to transport natural gas to a home’s fireplace was entitled to a new trial in a suit alleging that the product’s inability to withstand the effects of lightning rendered it inherently defective, a Pennsylvania superior court ruled. A jury had found in favor of the home’s owners on their strict liability claim against the company, but the trial court’s jury instruction on defective products was based on law that had been overturned by the state supreme court in 2014. Because the instruction dealt with the principal issue disputed by the parties—whether there was a defect—it was a fundamental error that required a new trial (Tincher v. Omega Flex, Inc., February 16, 2018, Lazarus, A.).

The case stemmed from a house fire in 2007 at a home in Downingtown, Pennsylvania. The residence was the central unit of a two-story triplex built in 1998-99, and purchased by the plaintiffs in 2005. Investigators concluded that a lightning strike near the home caused a small puncture in the corrugated stainless steel tubing (CSST) that transported natural gas to a fireplace located on the first floor of the residence. The CSST installed in the home was manufactured and sold by Omega Flex, Inc. as part of a gas transportation system marketed as the TracPipe System. The heat that melted the CSST caused by the lightning strike ignited the natural gas, fueling the fire. The homeowners filed suit against Omega Flex, asserting claims premised on theories of strict liability, negligence, and breach of warranty.

Their complaint relied on the theory of strict liability articulated in Section 402A of the Second Restatement of Torts, but as followed and construed in Pennsylvania. The plaintiffs alleged that Omega Flex was liable for damages to their home caused by the placement on the market and sale of the TracPipe System. According to the homeowners, the CSST incorporated into the piping system was defective, and unreasonably dangerous to intended users, because its walls were too thin to withstand the effects of lightning. The homeowners requested compensatory damages, interest, fees, and costs of litigation. The case was tried before a jury.

Instructions. The jurors were instructed regarding the homeowners’ strict liability claim. As to the defective design claim, the jurors were told that the manufacturer of a product "is really a guarantor of its safety" and that "the product must be provided with every element necessary to make it safe for its intended use." They also were instructed that if they found that the TracPipe, when it left the manufacturer’s control, "lacked any elements necessary to make it safe for its intended use, or contained any condition that made it unsafe for its intended use, and there was an alternative more practical design, more safer [sic] design, then the product is considered defective and the defendant is liable for the harm, if you find that defect caused the harm[,] was the proximate cause of the harm to the plaintiffs." The jurors also were informed that: "The imposition of strict liability is not meant to transform manufacturers into insurers of all injuries that are potentially possible and [sic] at the hands of a product. A manufacturer of a product may be a guarantor of the product[’s] safety, but under no circumstances is the manufacturer an insurer of the safety of the product."

Omega Flex had requested that the jurors be instructed based on the Third Restatement of Torts with respect to the strict liability claim. The trial court rejected the request because the Pennsylvania Supreme Court had not adopted the Third Restatement.

Verdict. In October 2010, the jury returned a verdict in favor of the homeowners on the products liability claim, and awarded compensatory damages totaling $958,895.85. The trial court added $69,336.05 in delay damages, and entered judgment on the verdict. The following month, Omega Flex moved for post-trial relief requesting, among other things, a new trial premised on trial court errors, including the trial court’s failing to instruct the jury on the law as articulated in the Third Restatement. Omega Flex sought judgment notwithstanding the verdict on the theory that the evidence introduced at trial was insufficient to prove a claim of strict liability under Third Restatement principles. In September 2012, the trial court affirmed its judgment, holding that it did not err in declining to adopt the Third Restatement.

Pennsylvania Supreme Court decision. The manufacturer appealed to the state supreme court, which allowed the appeal on the following question: whether the Pennsylvania Supreme Court should replace the strict liability analysis of Section 402A of the Second Restatement with the analysis of the Third Restatement. The state high court answered in the negative and, in doing so, overruled its prior decision in Azzarello v. Black Brothers Co. (391 A.2d 2010 (Pa. 1978)), which had required that Pennsylvania juries be instructed that in cases of a supplier’s strict liability in tort, "the product must … be provided with every element necessary to make it safe for its intended use," and that while a manufacturer of a product is not an insurer of a product’s safety, it may be a guarantor of the product’s safety [see Products Liability Law Daily’s November 21, 2014 analysis]. Azzarello had created a strict separation between negligence and strict liability theories under Pennsylvania law.

In addition, the high court concluded that a plaintiff pursuing a strict liability cause of action in tort must prove that the product is in a "defective condition" by showing either that: (1) the danger was unknowable and unacceptable to the average or ordinary consumer (consumer expectations test); or (2) a reasonable person would conclude that the probability and seriousness of harm caused by the product outweighed the burden or costs of taking precautions (risk-utility test). Either way, the court stated that the burden of production and persuasion would be by a preponderance of the evidence. The court also ruled that whether a product is in a defective condition is a question of fact ordinarily submitted to the finder of fact for determination. Only in cases in which it is clear that reasonable minds could not differ on the issue is the question removed from the jury’s consideration.

Denial of new trial. On remand from the supreme court, Omega Flex again moved for a new trial, but the trial court denied the motion. According to the trial court, reasonable minds could not differ on the point that a product, which is used to convey natural gas in a residential dwelling and is determined by a jury (as here) to be "defective for the obvious reason that its component parts are inadequate to preclude the unanticipated escape of gas also must be considered unreasonably dangerous." The trial court also ruled that its jury instruction was not prejudicial to Omega Flex because it did not affect the jury’s verdict. The manufacturer appealed.

Pennsylvania Superior Court ruling. The Pennsylvania Superior Court ruled that there was no question that the trial court’s jury charge was incorrect. As the state supreme court had noted, "in critical part, the trial court instructed the jury in accordance with the law as articulated in Azzarello and its progeny." Thus, the charge contained all of the product liability law under Azzarello that the supreme court disapproved, including a definition equating a defective product with one that "leaves the suppliers’ control lacking any element necessary to make it safe for its intended use," and a declaration that a manufacturer "is really a guarantor of [a product’s] safety" but not "an insurer of [that] safety." Because the state high court has overruled Azzarello and determined that this statement of product liability law was incorrect, the jury instruction was erroneous. As such, the controlling question was whether the trial court abused its discretion when it declined to order a new trial despite that error.

Because the trial court gave an instruction on a determinative issue that failed to conform to the applicable law, the charge amounted to fundamental error. The supreme court made clear that Omega Flex would be entitled to a new trial if the charge amounted to fundamental error. As the trial court had observed, the "predominant factual issue" in this case was whether the steel tubing in the TracPipe system was defective. Therefore, the jury instruction on how to determine whether the product was defective was critical to this case.

The record indicated that the jury had asked for the charge defining a "defect" to be repeated twice during two of its days of deliberations. Assuming that a jury follows the charge it is given, the superior court concluded that the charge clearly affected the result. Although the supreme court commented that this case bore "the indicia of negligence," after hearing the trial court’s repeated instructions about the meaning of "negligence" and "defect," the jury imposed no liability on the negligence claims and awarded the homeowners substantial damages for the product defect. According to the superior court, this spoke volumes about the importance of the jury instruction on "defect." Thus, the court concluded that the charge was fundamentally erroneous and entitled Omega Flex to a new trial.

Contrary to the trial court’s reasoning, the fact that the jury may have heard evidence about risk and utility during the trial did not mean that it rendered a verdict based on the risk/utility standard adopted by the state high court. In fact, the jury was never instructed to make findings under that standard. Moreover, the trial court had no authority to deny a new trial on the basis of its own speculation about what the jury would do under the supreme court’s new formulation of the law. This would assume a fact-finding role that it does not have, the state appellate court said. The supreme court’s decision was clear that only the fact-finder (here, the jury) may determine whether a product is defective. Thus, Omega Flex’s motion for a new trial was granted.

The case is No. 1285 EDA 2016.

Attorneys: Mark Elliot Utke (Cozen O'Connor PC) for Terence D. Tincher. William J. Conroy (Campbell Campbell Edwards & Conroy, PC) and Joseph A. Del Sole (Del Sole Cavanaugh Stroyd, LLC) for Omega Flex, Inc.

Companies: Omega Flex, Inc.

MainStory: TopStory DesignManufacturingNews JuryVerdictsNewsStory CausationNews IndustrialCommercialEquipNews PennsylvaniaNews

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