If your company has been a defendant in a lawsuit where it was alleged that both your company and co-defendants were negligent in some fashion, you may be familiar with the legal doctrine of “joint and several liability.” In Pennsylvania, the concept of joint and several liability refers to the proportionate liability of two or more defendants to a plaintiff in the collection of an awarded judgment.
Joint and several liability means that both or all defendants, regardless of the percent of liability owed to the plaintiff, are both/all (jointly and severally) liable for all of plaintiff’s awarded money damages. As long as a defendant is found to be 1% liable to the plaintiff, the plaintiff can exercise her right to collect all of the damages from one defendant. That paying defendant then would bear the task of collecting the respective proportional amount paid from the other liable defendant(s).
Let’s suppose a plaintiff named Jack falls down in a parking lot of a grocery store. Jack then brings a lawsuit against Grocery Store, Inc., the owner of the grocery store and lessee of the land where the grocery store parking lot is located, and Asphalt, Inc., the owner of the parking lot. The claims against both of these defendants are for negligence. The case goes to trial, and Jack wins. He is awarded $1 million in damages. Grocery Store, Inc. was found 10% liable and Asphalt, Inc. was found 90% liable. Under joint and several liability, Jack could collect the entire million dollar award from Grocery Store, Inc. Once the payment is made, Grocery Store, Inc. could seek reimbursement from Asphalt, Inc for its proportional liability. But, if Asphalt, Inc. did not have the money/assets to reimburse Grocery Store, Inc. then Grocery Store, Inc. would bear the loss. In other words, Grocery Store, Inc. would have paid Jack $1 million even though the company was found to have only been ten 10% – or $100,000 – liable to Jack. This type of scenario is one that defendants must be mindful of when evaluating their potential financial exposure in a negligence claim.
Being in the minority of states that subscribe to the concept of joint and several liability, the Commonwealth of Pennsylvania passed into law the Fair Share Act in June 2002. Pursuant to the Fair Share Act, defendants were only liable to pay to plaintiff their proportionate share of an award, subject to a few exceptions. One of those exceptions relates to a defendant that is found to be 60% or more liable to the plaintiff. In that situation, the defendant found to be at least 60% liable to the plaintiff could be liable to pay the full award.
Shortly after the Fair Share Act was passed, however, then-Pennsylvania House Minority Leader William DeWeese challenged the law alleging that it was unconstitutional. Representative DeWeese argued that the method by which the law was passed, appended to another unrelated matter, violated the Pennsylvania Constitution. The Pennsylvania Commonwealth Court agreed and struck down the Fair Share Act. DeWeese v. Weaver, 880 A.2d 54 (Pa. Commw 2005). The Pennsylvania Supreme Court then affirmed the Pennsylvania Commonwealth Court’s decision. The Pennsylvania legislature then passed a new Fair Share Act, one not appended to other unrelated legislation, but the bill was vetoed by then-Governor Edward Rendell in March 2006.
In January 2011, Pennsylvania Representative Curt Schroder sponsored House Bill 1 (HB-1) and Pennsylvania Senator Jake Corman III separately sponsored Senate Bill 2 (SB-2). HB-1 and SB-2 are similar to each other and to the aforementioned Fair Share Act. Both of these bills seek to amend (and, by nature of each bill, repeal) the current law of joint and several liability in the Commonwealth of Pennsylvania with a few exceptions, including the exception for when a defendant is found to be liable for 60% or more to the plaintiff. While the fate of these bills is unknown, Governor Tom Corbett ran on a platform that included the repeal of joint and several liability.
Houston Harbaugh will monitor the proposed legislation and keep you informed.
UPDATE:
On June 28, 2011, Governor Tom Corbett signed into law Senate Bill 1131 a/k/a The Fair Share Act.
For more information on this matter, please contact Matthew J. Lautman at (412) 288-5017 or lautmanmj@hh-law.com.