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Introduction
On June 28, 2011, a distinct change took place and the minority legal principal of “joint and several liability” was reduced to a list of exceptions when Governor Corbett signed into law Senate Bill 1131, otherwise known as the Fair Share Act. On signing the bill, Corbett said, “Pennsylvania is open for business” claiming that the measure “will encourage companies to move here, grow here and stay here in Pennsylvania.”
Brief History of the Fair Share Act
Under the law, “joint tortfeasors” are two or more persons who either act together in committing a wrong or whose independent acts unite in causing a single injury. Prior to the Fair Share Act, such joint tortfeasors were “jointly and severally liable” to an injured party. Under the law, each tortfeasor was liable for the full amount of the judgment, regardless of their percentage of fault. For example, if there are two joint tortfeasors, one of which is adjudged 1% liable and the other 99% liable, either party would be liable to pay the full amount of the judgment, even the tortfeasor with 1% liability. However, a joint tortfeasor who paid more than their proportionate share of liability had a right of contribution against a defendant that did not pay its proportionate share. While this protected plaintiffs by insuring that a judgment would be paid, it created inequitable results. Defendants who were better insured (but adjudged less liable) were forced to pay judgments on behalf of their more liable (but less insured) co-defendants. Pre-trial settlements were often “extorted” from well-insured defendants, as the potential for being adjudicated 1% liable and forced to pay an entire judgment was often too much of a risk for a party to take.
Pennsylvania previously attempted to rectify this inequity with the passing of the Fair Share Act on June 19, 2002. Under this Act, which is very similar to the current Act, individual defendants were liable to pay only their proportionate share of the judgment instead of the full judgment, with few exceptions. The most notable exception related to a defendant held liable for 60% or more of the total apportioned liability to all parties. If a defendant was held liable for 60% or more of total apportioned liability, that defendant remained liable to pay the full amount of the judgment.
However, this law was short-lived. On July 26, 2005, the Commonwealth Court held that this Act was unconstitutional because it was improperly appended to another law that required DNA samples from incarcerated felony sex offenders. DeWeese v. Weaver, 880 A.2d 54 (Pa. Commw. 2005). This decision was based on Article III, Section 3 of the Pennsylvania Constitution, which requires that “no bill shall be passed containing more than one subject, which shall be clearly expressed in its title, except a general appropriation bill or a bill codifying or compiling the law or a part thereof.” Pa. Constitution, Article III , § 3. The DeWeese decision was appealed to the Pennsylvania Supreme Court, where it languished for more than a year. The decision was eventually affirmed without explanation. DeWeese, at 588 Pa. 738, 906 A.2d 1193 (2006). The Act was again introduced in 2006. It passed through the State Senate by a vote of 32-18 and the House by a vote of 118-81. However, Governor Rendell vetoed the bill on March 24, 2006.
Fair Share Act of 2011
The new Fair Share Act amends 42 Pa. C.S.A. §7102 regarding comparative negligence. This statute now reads:
(1) 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 that proportion of the total dollar amount awarded as damages in the ratio of the amount of that defendant's liability to the amount of liability attributed to all defendants and other persons to whom liability is apportioned under subsection (a.2).
(2) . . . [A] defendant's liability shall be several and not joint, and the court shall enter a separate and several judgment in favor of the plaintiff and against each defendant for the apportioned amount of that defendant's liability.
Id. at (a.1). Additionally, the Act allows the trier of fact to consider "for [the] purposes of apportioning liability only, the question of liability of any defendant or other person who has entered into a release with the plaintiff with respect to the action and who is not a party." Id. at (a.2). This allows defendants to specifically identify and demonstrate the liability of any nonparties who may have settled prior to the commencement of the lawsuit, as well as any parties who settled prior to trial.
Joint and several liability has not been totally abolished. However, it exists only in the following five defined areas:
(1) Intentional Misrepresentation;
(2) Intentional torts;
(3) Where the defendant has been held liable for not less than 60% of the total liability apportioned to all parties;
(4) The release or threatened release of a hazardous substance under the Hazardous Sites Cleanup Act; and
(5) Civil actions in which a defendant violated section 497 of the Pennsylvania Liquor Code.
Id. at (a.1)(3). Other proposed exceptions which would have covered economic damages, minors, and seniors citizens, were not included in the Act.
Effect of the Fair Share Act
As clearly seen, the Act changes the way lawsuits determine how defendants will pay their damages. Now, a defendant will be responsible only for its portion of the monetary damages, instead of being potentially responsible for the entire amount of the verdict.
Potentially, the Act could be a disincentive to drag people or companies into lawsuits as defendants when they have little or no liability. This act will have a substantial impact on complex litigation cases, especially medical malpractice actions. Plaintiffs have often brought suit against companies and individuals with “deep pockets” hoping that the jury will impose a small percentage of liability on this defendant. Plaintiffs may be less inclined to include a “deep pocket” defendant on a specious legal theory when that defendant will be responsible only for its share of the verdict and not the entire verdict amount. Along these same lines, if a case is to be settled, plaintiffs will be less likely to “extort” a settlement from a “deep pocket” or better-insured defendant, as the potential risk that this defendant will have to pay the entire verdict is eliminated.
The Act also will severely limit the need for contribution actions among the defendants. As noted, previously, if a judgment was entered against one of the defendants, that defendant’s only remedy was to seek contribution from the joint tortfeasors. Now, the Act requires the courts to "enter a separate and several judgment in favor of the plaintiff and against each defendant for the apportioned amount of that defendant's liability." Contribution actions would be necessary only if a defendant is found more than sixty percent liable.
Furthermore, the Act specifically allows for defendants to identify and demonstrate the liability of nonparties who settled with a plaintiff prior to suit, as well as any parties who settled prior to trial. The Act specifically contemplates that if the sufficient proof is shown, these settling persons would appear on the verdict slip.
Upon signing the Act, Pennsylvania House Majority Leader Mike Turzai noted that "Pennsylvania's courts must protect the rights of those who can be dragged into court by lawyers searching for deep pockets and bring lawsuits against those minimally responsible or not responsible at all." Indeed, this Act now brings Pennsylvania into the majority, with 40 other states having abolished strict joint and several liability. This Act also brings a better sense of fairness to Court proceedings, as defendants will pay only what their actions warrant. It maintains the right of plaintiffs to pursue and receive full judgments from the parties who are responsible, but it protects against gross imbalances between financial responsibility and fault.
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