Also known as: Restatement Third · Restatements (Third) · Third Restatement · ALI Restatement (Third)
Written by attorneys — see sources below.
A series of model rules and principles issued by the American Law Institute to clarify, modernize, and restate common-law doctrines.
Roland Rhodes sold his mortgaged beachfront resort to Silver Hotels. The deed recited that the transfer was subject to the existing mortgage. After Silver defaulted, the mortgagee sought a deficiency judgment against Roland. Because the mortgagee never granted Roland an express release and no suretyship defense arose, Roland remained personally liable on the original obligation.
Ricardo Rojas sued a tubing manufacturer after lightning damaged his home through allegedly defective CSST piping. The court applied the risk-utility test drawn from the Restatement (Third) of Torts to decide whether the product was defective and whether the manufacturer could be held strictly liable.
Around 2:30 a.m. on June 20, 2007, neighbors reported a fire that had erupted at the home of the Tinchers in Downingtown, Pennsylvania. Investigators concluded that a lightning strike near the Tinchers’ home caused a small puncture in the corrugated stainless steel tubing transporting natural gas to a fireplace. The CSST was part of the TracPipe System manufactured and sold by Omega Flex. The resulting fire burned for over an hour and caused significant damage to the home and belongings. Following the fire, the Tinchers reported the incident to their insurer, United Services Automobile Association. USAA compensated the Tinchers for their loss up to the limit of their policy and received an assignment of liability claims. The Tinchers suffered an additional out-of-pocket loss because a portion of their claimed loss exceeded the limits of the USAA policy. In January 2008, the Tinchers filed a complaint against Omega Flex in the Chester County Court of Common Pleas. They asserted claims premised upon theories of strict liability, negligence, and breach of warranty, with the strict liability claim based on Section 402A of the Second Restatement. The case proceeded to a jury trial in October 2010 before Judge Ronald C. Nagle. The Tinchers offered expert testimony that the CSST walls were only one-hundredth of an inch thick and therefore inherently defective because lightning-generated currents were highly likely to perforate them. Omega Flex presented its own experts who testified that the TracPipe System met all applicable industry standards. They also stated that the lightning strike lacked sufficient energy to cause the puncture and that an attempted bonding clamp found disconnected after the fire may have prevented the incident if properly installed. After the close of evidence, the trial court denied Omega Flex’s motions for nonsuit and directed verdict. On October 20, 2010, the jury returned a verdict in favor of the Tinchers on the strict liability claim. The jury awarded compensatory damages totaling $958,895.85 plus delay damages. The jury found for Omega Flex on the negligence claim. Omega Flex filed post-trial motions that the trial court denied, leading to entry of judgment. The Superior Court affirmed the judgment in September 2012. The Supreme Court granted Omega Flex’s petition for allowance of appeal limited to the question of whether to replace the strict liability analysis of the Second Restatement with that of the Third Restatement.
View caseRiley Rivera alleged that her employer retaliated after she complained of discrimination. The court required her to prove that the complaint was the but-for cause of the adverse action, applying the causation framework endorsed in the Restatement (Third) of Employment Law.
The University of Texas Southwestern Medical Center, a teaching hospital affiliated with the University of Texas, hired Naiel Nassar, a physician of Middle Eastern descent, first as a medical resident in 2001 and later as an assistant professor in the Department of Internal Medicine in 2006. Nassar's direct supervisor was Dr. Michael Levine, the Chief of Infectious Disease Medicine, and he also worked with Dr. Brian Becherer, the Medical Director of the hospital's employee health clinic. In 2007 and 2008, Nassar complained to his supervisors that he was being subjected to discrimination and harassment by Levine on the basis of his religion and ethnic heritage. In July 2008, Nassar was offered and accepted a position as a full-time faculty member in the Department of Internal Medicine. In August 2008, Nassar resigned from his faculty position in a letter stating that the primary reason for his departure was the hostile work environment created by Levine's harassment. After Nassar resigned, Becherer sent a letter to the state medical board reporting that Nassar had resigned while under investigation for professional misconduct involving alleged improper billing practices. Nassar filed suit in the United States District Court for the Northern District of Texas alleging two claims under Title VII: status-based discrimination on the basis of his race, religion, and national origin, and retaliation for complaining about Levine's conduct. The case proceeded to trial before a jury. The District Court instructed the jury that Nassar could prevail on his retaliation claim if he showed that retaliation was a motivating factor in the hospital's decision to send the letter to the medical board. The jury found for Nassar on both claims and awarded him $3,000 in backpay and $400,000 in compensatory damages, which the District Court reduced to $300,000 pursuant to the statutory cap. The hospital appealed to the Fifth Circuit, which affirmed the retaliation verdict on the theory that the motivating-factor standard applied. The Supreme Court granted certiorari.
View caseRalph Richardson opened a restaurant using a distinctive decor and layout copied from an established chain. The court held that the overall appearance could qualify for protection without proof of secondary meaning, following the approach outlined in the Restatement (Third) of Unfair Competition.
Taco Cabana, Inc., operates a chain of fast-food restaurants serving Mexican food. The first Taco Cabana restaurant opened in San Antonio in September 1978. By 1985 five more had opened in that city. Taco Cabana's Mexican trade dress features a festive eating atmosphere with interior dining and patio areas decorated with artifacts, bright colors, paintings and murals. It also includes a stepped exterior in a vivid color scheme using top border paint and neon stripes, bright awnings and umbrellas. In December 1985, Two Pesos, Inc., opened a restaurant in Houston that adopted a motif very similar to Taco Cabana's trade dress. Two Pesos expanded rapidly in Houston and other markets but did not enter San Antonio. In 1986, Taco Cabana entered the Houston and Austin markets. It expanded into other Texas cities including Dallas and El Paso where Two Pesos was also operating. In 1987, Taco Cabana sued Two Pesos in the United States District Court for the Southern District of Texas. The suit alleged trade dress infringement under § 43(a) of the Lanham Act and theft of trade secrets under Texas common law. The case was tried to a jury. The jury answered five questions. Taco Cabana has a trade dress. Taken as a whole, the trade dress is nonfunctional. The trade dress is inherently distinctive. The trade dress has not acquired a secondary meaning in the Texas market. The alleged infringement creates a likelihood of confusion on the part of ordinary customers as to the source or association of the restaurant's goods or services. The district court entered judgment awarding damages to Taco Cabana. It found that Two Pesos had intentionally and deliberately infringed the trade dress. The Court of Appeals for the Fifth Circuit affirmed the judgment. The Supreme Court granted certiorari to resolve a conflict among the courts of appeals.
View caseRajesh Rao was injured when his vehicle rolled over. He claimed the design was defective. The court evaluated whether the product was unreasonably dangerous by balancing risks and benefits under the standard set forth in the Restatement (Third) of Torts: Products Liability.
Nancy Denny was severely injured when the Ford Bronco II that she was driving rolled over on June 9, 1986. The rollover occurred after Denny slammed on her brakes to avoid a deer that had walked directly into the vehicle's path. The Bronco II was a downsized small utility vehicle designed for off-road use on unpaved and rugged terrain. Ford marketed the vehicle as suitable for commuting, suburban and city driving, and family use in snow and ice. Denny and her spouse sued Ford Motor Co. asserting claims for negligence, strict products liability and breach of implied warranty of merchantability under UCC 2-314(2)(c) and 2-318. The case went to trial in the District Court for the Northern District of New York in October of 1992. Plaintiffs introduced evidence that the Bronco II had a high center of gravity, narrow track width and short wheel base that made it prone to rollover on paved roads. Ford introduced evidence that those design features were necessary to the vehicle's off-road capabilities and that it had not been designed primarily as a passenger car. The jury found that the Bronco II was not defective under the strict products liability claim but that Ford had breached the implied warranty of merchantability and that the breach proximately caused Nancy Denny's injuries. Following apportionment the plaintiff was awarded judgment in the amount of $1.2 million. Ford moved for a new trial under Federal Rule of Civil Procedure 59(a) arguing that the verdicts were irreconcilable. The trial court rejected the motion. On appeal the Second Circuit certified three questions of New York law to this Court.
View caseRavi Reddy challenged a homeowners association decision to use a particular termite treatment. The court deferred to the board's choice among reasonable alternatives, applying the business-judgment rule articulated in the Restatement (Third) of Property: Servitudes.
Gertrude M. Lamden owns a condominium unit in one of three buildings comprising the La Jolla Shores Clubdominium condominium development in La Jolla, California. The development was built in 1971. Lamden and her husband bought unit 375 in 1973. Until 1977 the Lamdens used their unit only as a rental. From 1977 until 1988 they lived in the unit. Since 1988 the unit has again been used only as a rental. The development is governed by defendant La Jolla Shores Clubdominium Homeowners Association, an unincorporated community association. In the late 1980's the Association hired a contractor to renovate exterior siding on all three buildings. The contractor replaced the siding on the southern exposure of Building Three and removed damaged drywall and framing. Where the contractor encountered termites a termite extermination company provided spot-treatment and replaced damaged material. Lamden remodeled the interior of her condominium in 1990. At that time the Association's manager arranged for a termite extermination company to spot-treat areas where Lamden had encountered termites. The following year both Lamden and the Association obtained termite inspection reports recommending fumigation but the Association's Board decided against that approach. The Board based its decision not to fumigate on concerns about the cost of fumigation, logistical problems with temporarily relocating residents, concern that fumigation residue could affect residents' health and safety, awareness that upcoming walkway renovations would include replacement of damaged areas, pet moving expenses, anticipated breakage by the termite company, lost rental income and the likelihood that termite infestation would recur even if primary treatment were utilized. In 1991 and 1992 the Association engaged a company to repair water intrusion damage to four units in Building Three. The company removed siding in the balcony area, repaired and waterproofed the decks, and repaired joints between the decks and the walls of the units. Where termite infestation or damage became apparent during this project spot-treatment was applied and damaged material removed. In 1993 and 1994 the Association commissioned major renovation of the Development's walkway system. The $1.6 million walkway project was monitored by a structural engineer and an on-site architect. In 1994 Lamden brought this action for damages, an injunction and declaratory relief. She purported to state numerous causes of action based on the Association's refusal to fumigate for termites naming as defendants individual members of the Board as well as the Association. Her amended complaint included claims sounding in breach of contract, breach of fiduciary duty, and negligence. At trial Lamden waived any damages claims and dismissed with prejudice the individual defendants. Presently she seeks only an injunction and declaratory relief. After both sides had presented evidence and argument the trial court found there was no question from all the evidence that Mrs. Lamden's unit has had a serious problem with termites. The evidence was overwhelming that termites had been a problem over the past several years. The trial court found that the Board did have a rational basis for their decision to reject fumigation and do what they did. Ultimately the court gave judgment for the Association applying what it called a business judgment test. Lamden appealed. Citing Frances T. v. Village Green Owners Assn. the Court of Appeal agreed with Lamden that the trial court had applied the wrong standard of care in assessing the Association's actions. Accordingly the Court of Appeal reversed the judgment of the trial court. We granted the Association's petition for review.
View caseThe transferor remains personally liable unless the mortgagee grants an express release or a suretyship defense applies under the Restatement Third of Suretyship and Guaranty.
No. The Restatement (Third) of Torts: Products Liability uses a risk-utility test that may consider alternative designs but does not mandate such proof as an essential element in every jurisdiction.
A default or conduct creating an unreasonable risk of default gives the transferor a direct right of action for exoneration or specific performance even before the transferor has paid the mortgagee.
A seller has a post-sale duty to warn when it knows or should know of a substantial risk that was not reasonably knowable at sale and the risk justifies the burden of providing a warning.
…provisions that, within the bounds of the law, might more narrowly circumscribe association or board discretion. Citing Restatement Third of Property, Servitudes, Tentative Draft No. 7, plaintiff suggests that deference to community association discretion will undermine individual owners’ previously discussed right,…