Certificate of Merit Requirement in Federal Diversity Cases


In a recent opinion filed by the United States Court of Appeals for the Third Circuit in Liggon-Redding v. Sugarman, the Third Circuit decided that Pennsylvania Rule of Civil Procedure 1042.3, requiring the filing of a certificate of merit in malpractice cases, is substantive law that federal courts must apply under Erie v. Tompkins, 304 U.S. 64 (1938). Prior to the Third Circuit’s decision, several federal district courts had held that Rule 1042.3 is a substantive rule of law that applies in professional liability actions proceeding in federal court. The Third Circuit has now conclusively decided this issue in Pennsylvania.

Although the Third Circuit’s opinion involved a legal malpractice case against an attorney, Rule 1042.3 applies to claims against any licensed professional, including architects and engineers. Several other states, including Arizona, California, Colorado, Georgia, Maryland, Minnesota, Nevada, New Jersey, Oregon, Pennsylvania, and Texas, have enacted similar laws that require a plaintiff to file a certificate or affidavit from a third-party design professional declaring that the plaintiff’s claim against an architect or engineer has merit. The general purpose of such laws is to provide a basis for the trial court to conclude that the plaintiff’s claims have merit and to prevent needless waste of judicial time and resources which would otherwise be spent on claims that have no material basis or justification in fact or in law.

Malpractice or negligence claims against architects and engineers that seek recovery for property damages caused by design defects can be brought in or removed to federal court if there is diversity of citizenship between the parties and the amount in controversy exceeds $75,000. Pursuant to the United States Supreme Court’s decision in Erie v. Tompkins, a federal court sitting in diversity must apply state substantive law and federal procedural law. Since certificate of merit laws have been enacted by states, federal courts must determine whether a certificate of merit law is substantive or procedural. As noted above, the Third Circuit recently concluded that Pennsylvania’s certificate of merit law is substantive state law. Therefore, a plaintiff must comply with Pennsylvania’s certificate of merit law when filing a lawsuit against an architect or engineer in a federal district court in Pennsylvania.

Not all certificate of merit laws are written the same and the filing requirements, including the deadline to file the certificate, may vary depending on the state, so not all of the Third Circuit’s reasoning in Liggon-Redding v. Sugarman will be applicable in other states. Prior to this most recent opinion, the Third Circuit had previously determined that the New Jersey certificate of merit law is substantive state law that plaintiffs in diversity cases must comply with. On the other hand, federal district courts in Georgia have found that Georgia’s certificate of merit law is not applicable to actions filed in federal court, but the Eleventh Circuit has declined to decide the issue. Similarly, the Fifth Circuit has not determined whether Texas’ certificate of merit law is substantive or procedural, but at least one federal district court has determined that it is a procedural rule that does not apply in a federal diversity case, while other courts have assumed, without examination or explanation, that Texas’ certificate of merit law applies in a federal diversity case.

When faced with a claim for property damage caused by a design defect, it is important to determine whether state law requires a certificate of merit when filing a lawsuit against a design professional. If you intend to pursue the claim in federal court, the prudent practice is to retain a third-party design professional to review the facts and circumstances surrounding the loss and comply with the requirements of the applicable certificate of merit law.

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