Affirming Consumer-Level Limitation-of-Liability Clauses: Marie Lamb v. CVS Pharmacy LLC (3d Cir. 2025)

Introduction

In Marie Lamb v. CVS Pharmacy LLC, the United States Court of Appeals for the Third Circuit addressed whether a “limitation-of-liability” clause printed on multiple customer receipts can cap damages when irreplaceable VHS tapes are lost in transit. Marie Lamb sought extensive damages for the loss of sixteen family home-movie tapes that she and her son deposited at CVS for DVD conversion. The court’s decision—although marked “Not Precedential”—sets a persuasive data point on the enforceability of liability-limiting clauses in the consumer context, distinguishing such clauses from true exculpatory agreements and underscoring Pennsylvania’s tolerant approach toward contractual risk allocation.

Summary of the Judgment

• The District Court granted CVS partial summary judgment, limiting Lamb’s recovery to $334.84, the cost of blank replacement tapes and conversion.
• The Third Circuit affirmed, holding that:
  • The clause caps damages without completely absolving CVS of liability; therefore it is a limitation, not an exculpation.
  • The clause was conspicuous, not unconscionable, and offered an adequate (albeit modest) remedy.
  • Despite the consumer setting and Lamb’s failure to read the receipts, the limitation is enforceable under Pennsylvania law.
  • CVS qualifies as an “affiliate, retailer, agent or employee” of Fujifilm as referenced in the clause.
  • Emotional distress damages are unavailable absent wanton or reckless conduct.
• All other claims (replevin, NIED, fraud) were either dismissed or not appealed.

Analysis

1. Precedents Cited

1. Posttape Assocs. v. Eastman Kodak Co., 537 F.2d 751 (3d Cir. 1976) – distinguished between limitation and exculpation, providing early precedent for upholding liability caps.
2. Valhal Corp. v. Sullivan Assocs., 44 F.3d 195 (3d Cir. 1995) – confirmed enforceability of limitation clauses and clarified factors for determining unconscionability; cited by Lamb but ultimately used against her.
3. Hinkal v. Pardoe, 133 A.3d 738 (Pa. Super. Ct. 2016) – upheld waiver clauses in gym contracts, signaling that ordinary consumers may be bound by liability limitations.
4. Marek v. Marpan Two, Inc., 817 F.2d 242 (3d Cir. 1987) – enforced a liability cap in a consumer cruise-ticket context.
5. Moscatiello v. Pittsburgh Contractors Equip. Co., 595 A.2d 1190 (Pa. Super. Ct. 1991) – provided the test for conspicuousness.
6. Borden, Inc. v. Advent Ink Co., 701 A.2d 255 (Pa. Super. Ct. 1997) – set the two-prong unconscionability analysis.
7. Lobianco v. Property Protection, Inc., 437 A.2d 417 (Pa. Super. Ct. 1981) – upheld liability limits even when actual damages dwarfed the cap.
8. Emerman v. Baldwin, 142 A.2d 440 (Pa. Super. Ct. 1958) – outlined criteria for emotional-distress damages in contract breaches.
9. Garrett v. Wexford Health, 938 F.3d 69 (3d Cir. 2019) – procedural precedent that an amended complaint supersedes earlier versions, blocking Lamb’s attempt to revive negligence claims.

2. Legal Reasoning

The panel, led by Judge Ambro, marched through Lamb’s objections sequentially:

• Exculpatory vs. Limitation. An absolute release of liability (exculpation) is scrutinized more strictly than a mere cap. Here, the clause limited damages to replacement value; thus ordinary contract principles—not heightened exculpation scrutiny—applied.
• Consumer Sophistication. Relying on Valhal, Lamb argued that consumer status should void the clause. The court countered with Pennsylvania authority approving similar clauses in everyday transactions, finding that sophistication is not dispositive.
• Conspicuousness. The receipts bore a capitalized “READ THIS NOTICE” header, half-page block text, and bold warnings. Applying the Moscatiello reasonable-person test, the panel deemed the presentation adequate.
• Unconscionability. The Borden test failed: Lamb possessed a meaningful choice (she could have gone to another vendor), and the term did not “unreasonably favor” CVS—indeed, it mirrored industry practice.
• Adequate Remedy. Emotional or “priceless” value does not override a monetary cap; Lobianco shows courts regularly honor agreed‐upon caps even where damages far exceed the limit.
• Scope of Clause. Broad language covering “retailers, agents, or affiliates” of Fujifilm swept CVS into the protective umbrella.
• Emotional-Distress Damages. Emerman prerequisites (wanton conduct, bodily harm, foreseeability) were not satisfied.

3. Impact

Although labeled “Not Precedential,” Third Circuit opinions often serve as persuasive authority. The ruling strengthens the following trends:

• Risk Allocation Validity. Courts in Pennsylvania will enforce liability limitations in standard-form consumer contracts, provided the clause is conspicuous and not unconscionable.
• Evidence of Conspicuousness. Formatting (capital letters, placement, repetition) remains key; electronic or paper mediums should mirror these features to survive scrutiny.
• Damages for Irreplaceable Items. Even sentimental property may be subject to agreed caps; consumers must proactively negotiate higher coverage or purchase supplemental insurance.
• Drafting Guidance. Businesses should include clear language extending protection to affiliates, agents, and retailers—language that proved decisive here.

Complex Concepts Simplified

• Limitation-of-Liability Clause: A contractual term that sets a ceiling on the amount one party must pay if things go wrong. Think of it as a “maximum payout” rule rather than a complete escape hatch.
• Exculpatory Clause: A harsher provision that eliminates all liability, even for negligence; courts examine these skeptically.
• Conspicuousness: How obvious a term is to a reasonable person—larger font, bold text, headings, or placement can all make a term conspicuous.
• Unconscionability: A doctrine allowing courts to decline enforcement of fundamentally unfair terms. Two parts: (1) lack of meaningful choice (procedural), and (2) overly one-sided result (substantive).
• Replevin: A legal action seeking the return of specific property rather than money damages.

Conclusion

Lamb v. CVS Pharmacy LLC solidifies the message that, under Pennsylvania law, limitation-of-liability clauses—when properly drafted and conspicuous—will generally be upheld against individual consumers even when priceless personal items are at stake. The decision underscores the judiciary’s respect for contractual autonomy and offers a roadmap for businesses to craft enforceable risk-allocation provisions. Consumers, for their part, are reminded that signing or accepting a receipt—no matter how routine—may drastically limit their recovery in the event of a loss.