*1001 OPINION OF THE COURT
(May 23, 2012)
Appellants (“Plaintiffs”) sustained injuries while they were passengers in a van rented from International Renting and Leasing d/b/a Budget Rent-A-Car (“Budget”). The injuries occurred when the van crashed into a tree after the brakes failed. Plaintiffs brought suit against Budget, raising аmong other allegations, claims of strict liability, breach of warranty, and loss of consortium. The District Court entered summary judgment in favor of Budget after concluding that Plaintiffs could not recover because they had not leased the van frоm Budget and were not authorized drivers under the rental agreement. For the reasons that follow, we will reverse the entry of summary judgment in favor of Budget on the strict liability, breach of warranty, and loss of consortium claims and remand for further proceedings. 1
I. Facts and Procedural History
Franklin Barnabas rented a van from Budget and gave his sister-in-law, Diane Dewindt, permission to use it without listing her as an authorized driver on the rental agreement. Thereafter, Dewindt was driving down a steep hill when the brakes failed. Dewindt attemрted to stop the van by driving onto an uphill driveway. The van came to a stop when it crashed into a tree, injuring the passengers. Barnabas was not in the van.
Plaintiffs subsequently filed four separate suits against Budget in the District Court of the Virgin Islands pursuant tо 28 U.S.C. § 1332, 2 and the cases were consolidated for purposes of discovery and trial. The District Court decided the case by applying the Second Restatement of Torts which does not subject lessors to strict liability and granted summary judgment in fаvor of Budget on each of Plaintiffs’ claims. This appeal followed.
*1002 II. Strict Liability
Section 4 of the Virgin Islands Code provides:
The rules of the common law, as expressed in the restatements of the law approved by the American Law Institute, and to the extent not so expressed, аs generally understood and applied in the United States, shall be the rules of decision in the courts of the Virgin Islands in cases to which they apply, in the absence of local laws to the contrary.
V.I. Code Ann. tit. 1, § 4 (2011). We therefore look tо the restatements of law for guidance.
As we will explain, the District Court relied on cases that had been decided under Section 402A of the Second Restatement of Torts which does not recognize strict liability claims against lessors of defective products.
Banks
v.
Int’l Rental and Leasing Corp.,
Nos. 2002, 200-203,
(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or сonsumer, or to his property if
(a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
(2) The rule stated in Subsection (1) applies although
(a) the seller has exerсised all possible care in the preparation and sale of his product, and
(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.
Restatement (Second) ofTorts, § 402A (1965). Since strict liability under § 402A does not extend to a lessor such as Budget, the District Court was clearly correct in dismissing the strict liability claims if the Second Restatement controlled that court’s análysis.
However, in adopting the Third Restatement of Torts for Products Liability, the American Law Institute rethought the limitations on strict liability contained in the Second Restatement and extended strict *1003 liability beyond the Second Restatement’s limitation to sellers. Thus, Section 1 of the Third Restatement of Torts states: “[o]ne engaged in the business of selling or otherwise distributing products who sells or distributes a defective product is subject to liability for harm to persons or property caused by the defect.” Restatement (Third) of Torts: Products Liability, § 1 (1998) (emphasis added). Section 20(b) provides as follows:
One otherwise distributes a product when, in a commercial transaction other than a sale, one provides the product to another either for use or consumption or as a preliminary step leading tо ultimate use or consumption. Commercial nonsale product distributors include, but are not limited to, lessors, bailors, and those who provide products to others as a means of promoting either the use or consumption of such products or some other commercial activity.
Id. § 20(b). Strict liability under the Third Restatement would thus reach Budget as lessor/distributor of the allegedly defective van.
The District Court did not specifically address the issue of which Restatement should apply here. Instead, citing
Manbodh v. Hess Oil V.I. Corp.,
Where, as here, the outcome of a suit in federal court turns on an unresolved issue of local law, the United States Supreme Court has encouraged federal appellate courts to seek guidance from the highest court of the appropriate jurisdiction if that court has adopted procedures for accepting certified questions of law.
See Lehman Bros.
v.
Schein,
[t]he Supreme Court of the Virgin Islands may answer questions of law certifiеd to it by a court of the United States ... if there is involved in *1004 any proceeding before the certifying court a question of law which may be determinative of the cause then pending in the certifying court and concerning which it appears there is no controlling precedent in the decisions of the Supreme Court [of the Virgin Islands.
Id.
Moreover, we have stated that we will “defer to decisions of the Supreme Court of the Virgin Islands on matters of local law unless we find them to be manifestly erroneous.”
Pichardo
v.
V.I. Comm’r of Labor,
Accordingly, we certified the following question to the Supreme Court of the Virgin Islands pursuant to Rule 38 of that court and our own Local Appellate Rules: 3 “Whether, under Virgin Islands law, including V.I. Code Ann. tit. 1 § 4, a plaintiff may pursue a striсt liability claim against a lessor for injuries resulting from a defective product.” 4
Virgin Islands On December 15, 2011, in a commendably thorough and very well reasoned opinion, the Supreme Court of the Virgin Islands explained that even though the courts of the had historically applied the Second Restatement of Torts,
see Pynes, supra,
“[w]e conclude that the Legislature did not intend for section 4 of title 1 to compel this Court to mechanically apply the most recent Restatement.”
Banks v. International Rental and Leasing Corp.,
However, bаsed upon its examination of evolving trends in the law, the Supreme Court stated: “[nevertheless, we decline to endorse the
Pynes
rule.”
Id.
Rather, the court noted “a strong preference exists for following the most recent Restatement ovеr an older version . . . .”
Id.
*1005
(citing
Varlack v. SWC Caribbean, Inc.,
Thus, it is abundantly clear that the order of the District Court granting summary judgment to Budget pursuant to § 402(A) of the Second Restatement of Torts must be reversed, and this case must be remanded to аllow Plaintiffs to pursue their strict liability claims against Budget pursuant to the applicable provisions of the Third Restatement.
III. Breach of Warranty.
The District Court concluded that Plaintiffs were not entitled to recover for breach of either express or imрlied warranties because Plaintiffs were not in privity with Budget and were not intended beneficiaries of any of the provisions of the rental agreement with Budget. 6
Before we address the Plaintiffs’ assertion that the District Court erred in dismissing their warranty clаims, we must address Budget’s argument that Plaintiffs never raised a third-party beneficiary claim in the District Court. Appellee Br. at 20. Budget claims that, “at best” Plaintiffs only argued that Dewindt, the driver, was the authorized agent of the renter when Dewindt drove into the treе. Id. at 20-21. Significantly, Budget does not argue that express or implied warranties do not apply, only that Plaintiffs have not previously raised the issue.
In their complaint, Plaintiffs alleged: “when Defendant Budget provided to Plaintiffs a vehicle with a flawеd and defective breaking [sic] system, that act constituted a breach of contract and a breach of duty owed to one in the position of Plaintiffs, thereby entitling them to maintain this claim for relief.”
Banks
v.
Int'l Rental and Leasing Corp.,
Moreover, since it is now apparent that Plaintiffs may pursue a theory of strict liability, the District Court should have the opportunity to determine whеther Plaintiffs may rely on warranties in the rental agreement with Budget. Accordingly, we conclude that the Plaintiffs can present those claims on remand. 8
IV. Conclusion
For the reasons stated above, we reverse the District Court’s grant of summary judgment on the strict liability, breach of warranty, and loss of consortium claims, and remand for proceedings consistent with the foregoing opinion.
Notes
We have jurisdiction pursuant to 28 U.S.C. § 1291. Our review of a district court’s grant of summary judgment is plenary, and we apply the sаme legal standard as the district court; we consider whether there are any genuine issues of material fact such that a reasonable jury could return a verdict for the plaintiffs.
Vítalo v. Cabot Corp.,
Diane Dewindt and another of the passengers, Zyanguelyn Poe, are not parties to this action.
See 3rd Cir. L.A.R. Misc. 110.0 and Internal Operating Procedure 10.9.
See Banks v. Int’l Rental and Leasing Corp.,
Nos. 08-1603, 08-2512,
A copy of the opinion of the Virgin Islands Supreme Court is attached to this opinion as an Appendix. We take this opportunity to thank that cоurt for its very helpful assistance in resolving the Plaintiffs’ strict liability claims.
Since Franklin Barnabas was not a passenger in the car when it collided with the tree, his only claim is for loss of consortium based on injuries his wife received while she was a pаssenger. The District Court dismissed his claim for loss of consortium because that claim was derivative and therefore must rise or fall with his wife’s claims.
Section 2A-216 of the Virgin Islands Uniform Commercial Code extends to express and implied warranties and states:
A warranty to or for the benefit of a lessee under this Article, whether express or implied, extends to any person who may reasonably be expected to use, consume, orbe affected by the goods and who is injured by breаch of the warranty. The operation of this section may not be excluded, modified, or limited with respect to injury to the person of an individual to whom the warranty extends, but an exclusion, modification, or limitation of the warranty, including any with respect to rights and remedies, effective against the lessee is also effective against the beneficiary designated under this section.
VI. CODE ANN. tit. 11A, § 2A-216 (2011).
Similarly, since (as the District Court noted), Franklin’s claim for loss of consortium is derivative to any claims his wife may have, we also conclude that the District Court must consider Franklin’s claim for consortium on remand.