ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA. (D.C. Civil No. 91-00403).
Before: Becker, Nygaard, and Alito, Circuit Judges.
Donna K. Gade and her mother filed a three-count complaint in federal court based on diversity of citizenship, seeking to recover damages resulting from an automobile accident with a vehicle operated by defendant Istvan (Steven) J. Csomos. The complaint alleged that Csomos was careless, negligent, and reckless. The complaint also alleged that Abeloff Pontiac, Inc. and General Motors Acceptance Corporation (GMAC) had leased Csomos the vehicle he was driving, and that they had retained ownership interests in the vehicle. Count I asserted a claim against Csomos. Count II asserted a claim against Abeloff and GMAC under 75 Pa. Cons. Stat. § 1574. Count III asserted a claim against the same two defendants for negligent entrustment.
The district court granted summary judgment for the plaintiffs on count I, but the court granted summary judgment for the defendants on counts II and III. With respect to count II, the court held that Abeloff and GMAC were not liable under 75 Pa. Cons. Stat. § 1574 because they neither knew, nor had reason to know, that Csomos's license had been suspended.*fn1 With respect to count III, the court held that the summary judgment record could not support a finding of negligent entrustment on the part of Abeloff or GMAC. Donna K. Gade then took this appeal, contesting the district court's decision on count II.
The statute upon which count II was based, 75 Pa. Cons. Stat. § 1574, states the following:
(a) General Rule. - No person shall authorize or permit a motor vehicle owned by him or under his control to be driven upon any highway by any person who is not authorized under this chapter or who is not licensed for the type or class of vehicle to be driven.
(b) Penalty. - Any person violating the provisions of subsection (a) is guilty of a summary offense and shall be jointly and severally liable with the driver for any damages caused by the negligence of such driver in operating the vehicle.
As we noted earlier, the district court held that a vehicle owner cannot be subject to civil liability under subsection (b) unless the owner knew, or had reason to know, that the person whom the owner authorized or permitted to use the vehicle did not hold a valid license. By contrast, the appellant contends that civil liability under subsection (b) does not require proof of knowledge, reason to know, or any other level of culpability.*fn2 Since this is a diversity case, our role is to attempt to predict how the Supreme Court of Pennsylvania would decide this question of statutory interpretation. While acknowledging that the question is a close one, we predict that the Supreme Court of Pennsylvania would hold that civil liability under subsection (b) requires proof of some degree of culpability on the part of the vehicle owner with respect to the question whether the person whom the owner allows to use the vehicle possesses a valid license.
Subsection (a) of the statute sets out a "general rule," and subsection (b) provides that any one who violates this "general rule" is subject to two consequences: conviction for a summary offense and civil liability for damages caused by the negligence of the driver. Thus, one obvious feature of the statute is that the elements needed for conviction of the summary offense are the same as those needed for the imposition of civil liability. We therefore turn to the question whether knowledge, reason to know, or any other type of culpability is needed for the summary offense.
Under 18 Pa. Cons. Stat. § 302(c), when a statute does not prescribe the culpability needed for conviction of a particular offense, a minimum of recklessness is generally required. However, under 18 Pa. Cons. Stat. § 305(a)(1), this general rule does not apply to "summary offenses, unless the requirement involved is included in the definition of the offense or the court determines that its application is consistent with effective enforcement of the law defining the offense." Since the statute at issue in this case, 75 Pa. Cons. Stat. § 1574, does not expressly prescribe a culpability requirement for the summary offense it creates, it follows under 18 Pa. Cons. Stat. § 305(a)(1) that such a requirement would be recognized by the Pennsylvania Supreme Court only if that court concluded that such a requirement was "consistent with the effective enforcement of the law defining the offense."
With respect to this question, two decisions interpreting the statutory predecessors of 75 Pa. Cons. Stat. § 1574 provide the most helpful guidance. At the time of the first of these decisions, Moyer Automobile License Case, 359 Pa. 536, 59 A.2d 927 (1948), the relevant statutory provision was Section 622 of Art. VI of the Vehicle Code of May 1, 1929. Using language notably similar to that now contained in 75 Pa. Cons. Stat. § 1574, this provision made it unlawful for any person to "authorize or permit a motor vehicle owned by him, or under his control, to be operated by any person who has no legal right to do so."*fn3 The Secretary of Revenue had suspended Moyer's driver's license for violating this provision by permitting his vehicle to be operated by a driver whose license had been revoked. The Court of Common Pleas revoked the suspension, finding that Moyer "had no knowledge or reason to believe that the license . . . had been revoked." 359 Pa. at 538, 59 A.2d at 927. The Supreme Court of Pennsylvania affirmed. In a brief opinion, the court noted that the decision of the lower court could be reversed only for abuse of discretion, that the lower court's finding was "amply" supported by the record, and that there had been "no error of law." Id.
One reasonable interpretation -- and perhaps the best interpretation -- of Moyer is that knowledge or reason to know was needed under Section 622 of the Vehicle Code. As the appellant suggests, however, it is possible to read Moyer more narrowly. Specifically, it is possible that the Pennsylvania Supreme Court reasoned that even though (or even if) Moyer had violated Section 622 and was subject to the penalty prescribed therein, the ...