The Supreme Court of Pennsylvania recently held that exculpatory clauses that relieve a party of liability for “recklessness” are invalid as against public policy. Tayar v. Camelback Ski Corp. Inc., 2012 WL 2913750,* 10 ___ A.3d ___ (July 18, 2012). After a detailed analysis and discussion of the law applicable to exculpatory clauses, the Supreme Court concluded that it was against public policy to allow a party to exculpate itself in advance for reckless behavior. The Supreme Court reasoned that to find otherwise “would remove any incentive for parties to act with even a minimal standard of care.” Tayar, 2012 WL 2913750 at * 7 & 10. In so finding, the Supreme Court not only noted that the overwhelming majority of states find that exculpatory clauses releasing reckless conduct are against public policy, but also noted that the federal courts in Pennsylvania had previously barred the enforcement of releases for reckless conduct. Id. at * 9 & n.13.
The Court’s decision in Tayar left “for another day the question of whether a release for gross negligence can withstand a public policy challenge.” 2012 WL 2913750, at * n. 7. The Court cited federal court decisions from United States District Courts for the Eastern District of Pennsylvania and the District of New Jersey in its analysis of recklessness, and noted those courts found that exculpatory clauses in Pennsylvania cannot limit liability for gross negligence. Id. at * n.13. In doing so, the Court commented on the decision in Valeo v. Pocono Int’l Raceway, Inc., 500 A.2d 492 (Pa. Super. 1985) by saying that it “did not address the public policy of permitting such a release.” Id. at * n.7. . Valeo is sometimes cited as authority for the argument that one cannot circumvent the language in an exculpatory clause based on gross negligence. While the Court’s decision in Tayar now stands for the proposition that one cannot avoid liability for recklessness by relying on an exculpatory clause, the decision also opens up the possibility that, under the same logic, defendants can no longer escape liability for acts of gross negligence.