Pennsylvania municipalities faced a serious judicial challenge to their financial viability and ability to continue to provide taxpayers much needed governmental services. In Zauflik v. Pennsbury School District, the plaintiff, a seventeen year old school student, sustained severe and permanent injuries when a run-away bus operated by the school district employee accelerated out of control and struck twenty students on a sidewalk.  At trial, the school district did not contest that it was liable for its employee’s negligence and the jury entered an award for $14,036,263.39, of which $11.1 million constituted damages for past and future pain and suffering. Despite finding that the circumstances of the case resulted in an “unfair and unjust result,” the trial judge reduced the jury award over 96% from $14,036,263.39 to $502,661.63 because defendant is a “local agency” and, therefore, damages were capped at $500,000 pursuant to the Pennsylvania Tort Claims Act, 42 Pa.C.S.A. § 8553.

On appeal, appellant argued that the “damages cap” afforded local agencies violated various provisions of the United States and Pennsylvania Constitutions and resulted in an unfair and unequal result, particularly in this case where the school district has insurance coverage in excess of $500,000. The school district argued, inter alia, that there would be substantial, negative financial ramifications of the limitless tort liability that would follow if the Court were to strike down the “damages cap”. Also, many local agencies argued that their continued financial viability would be threatened as they would not be able to obtain insurance coverage and would not be able to provide much needed government services.

On November 19, 2014, the Pennsylvania Supreme Court decided Zauflik, and in an Opinion by Chief Justice Castille, upheld the constitutionality of the $500,000 limit to tort liability for local agencies. The Court stated that, while the facts of Zauflik are tragic, the General Assembly is in the better position than the Court to address the public policy questions raised by appellant. The Court noted that, after three decades since the passage of the Tort Claims Act, the General Assembly is currently considering legislation to increase the damages cap to $10,000,000 (H.B. 2032, Reg. Sess. Of 2014 (Pa. Feb. 19, 2014)). Although municipalities survived the judicial attack to the damages cap, the proposed legislation poses an even greater threat as the legal arguments raised by local agencies in Zauflik may be rendered moot if this proposed legislation is passed by the General Assembly.

For further information please contact:

Juan P. Sánchez, Esq.
Phone (610) 430-8000
Fax (610) 692-6210
jsanchez@lambmcerlane.com