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The Developing State of Joint and Several Liability Law in Pennsylvania

by Lisa A. Cauley, Esquire

Approximately 20 months ago, the Pennsylvania Legislature made significant changes to Pennsylvania law regarding Joint and Several Liability Statute and Comparative Negligence Act. The amended Act, known as the “Fair Share Act” made significant changes to joint and several liability in cases involving multiple defendants. Under the “Fair Share Act”, joint liability was abolished in causes of action arising after the effective date of the Act, August 18, 2002, in cases seeking damages for property damage or for injury or death to a person. Prior to the enactment of the Fair Share Act, any defendant found liable for a plaintiff’s loss could be made to pay the entire verdict, no matter the amount of that defendant’s proportionate share of liability.

The new Joint and Several Liability Law, set forth at 42 Pa. C.S.A. §7102, provides in relevant part that in actions where recovery is allowed against more than one person, including actions for strict liability, and where liability is attributed to more than one defendant, each defendant shall be liable for its proportionate share of damages. The law further provides that a defendant’s liability shall be several and not joint, except in cases of intentional misrepresentation, intentional tort, violations of section 497 of Pennsylvania’s liquor code, cases involving Pennsylvania’s Hazardous Sites Cleanup Act, or where a defendant has been held liable for at least 60% of the total liability. If the case falls within the exceptions, liability among defendants remains joint and several.

The new law renders each defendant liable for only that defendant’s proportionate share of the total dollar amount awarded in damages. Therefore, under the Fair Share Act, where a jury apportions liability according to any certain percentage, so long as the defendant’s proportionate share of liability is not equal to or greater than 60%, that defendant will only be responsible to pay its relative percentage of liability. The new law abolished the old “1% Rule”, which enabled plaintiffs to recover the full amount of any judgment or verdict against any single defendant held jointly and severally liable with any other defendant, including additional defendants.

The effect of the Fair Share Act was to insulate defendants from the risk of exposure for the full amount of a judgment or verdict beyond their proportionate share of liability to the plaintiff in a negligence or strict liability action. With the exception of defendants whose liability is assessed at 60% or more, defendants who validly maintained that their liability in any given negligence or strict liability action was negligible no longer had to be concerned that the assessment of 1% liability could result in their responsibility to pay the entire verdict. Although defendants still had to weigh their relative exposure and risk at trial, defendants who maintained that their liability is minimal would now have a stronger bargaining position at the settlement table, and plaintiffs would now be forced to consider the risk of a jury assessing significant liabilities against an uninsured or underinsured defendant, which could leave the judgment virtually uncollectible. The law changes the way plaintiffs and defendants evaluate their cases, potentially focusing proof of liability on the defendant with the most resources in order to protect the collectability of the verdict. The law also, in theory, increases the chances that defendants with marginal liability may be dismissed prior to settlement negotiations, or not sued at all.

Not surprisingly, the Fair Share Act promptly came under attack. Specifically, the constitutionality of the Act was challenged for its violation of Pennsylvania constitution’s “single subject” rule, which provides that no bill shall be passed which contains more than one subject. This issue is now pending before the Pennsylvania Supreme Court pursuant to a trial court opinion in the Philadelphia Court of Common Pleas authored by Judge James Murray Lynn. In estate of Louis Hicks v. Dana Corporation, December Term, 2002, No. 3509, an exposure to asbestos case filed against multiple defendants, the plaintiff filed a motion asserting that the Fair Share Act was unconstitutional and asking that it not be applied to the case. On June 11, 2004, the Hicks jury returned a five million dollar verdict in plaintiff’s favor and, thereafter, Judge Lynn granted plaintiff’s motion, finding the Fair Share Act to be unconstitutional.

Judge Lynn found that the Fair Share Act addressed two entirely different subjects, one concerning DNA testing for convicted sexual offenders, and one addressing negligence liability in civil cases. After analyzing the Pennsylvania Constitution and the legislative history of the Act, Judge Lynn concluded that “the legislature took a wildly popular and bi- partisan plan to track down sex offenders and concealed it within a contentious amendment designed to apportion damages among defendants in civil law suits involving multiple defendants. This is precisely the ‘sneak’ legislation our Supreme Court has long held to be unconstitutional.”

On June 16, 2004, the defendant in Hicks filed a Petition for Review with the Superior Court pursuant to Pa. R.A.P. 1511. On June 18, 2004, the Superior Court transferred the Petition for Review directly to the Supreme Court of Pennsylvania, where it remains for determination.

Hicks is the case upon which the Supreme Court will decide whether the new joint and several liability principles embodied in the Fair Share Act will be set aside as an unconstitutional violation of the single subject rule. Even if the current Fair Share Act does not survive recent challenges to its constitutionality, it is likely that the Pennsylvania legislature will submit another joint and several liability bill containing provisions similar to those set forth in the Fair Share Act. The future of joint and several liability in Pennsylvania remains a developing issue, with a decision from the Pennsylvania Supreme Court on the horizon. If the Court finds the Act unconstitutional, a rejoinder from the legislature, in the form of a new version of the Act, can be expected.