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Nature of Suit Code: 365
Nature of Suit: Personal Injury - Product Liability
Cause of Action: 

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United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 03-3658

___________

Timothy Gamradt; Carla Gamradt, *

*

 Appellants, *

* Appeal from the United States

v. * District Court for the

* District of Minnesota.

Federal Laboratories, Inc.; Mace *

Securities International; Defense *

Technology Corporation of America, *

*

 Appellees. *

___________

Submitted: June 14, 2004

Filed: August 25, 2004

___________

Before LOKEN, Chief Judge, and HEANEY and BYE, Circuit Judges.

___________

HEANEY, Circuit Judge.

Timothy and Carla Gamradt appeal from the district court’s adverse grant of

summary judgment. We affirm in part and reverse in part.

BACKGROUND

On June 2, 1998, Timothy Gamradt, a prison guard, was involved in a training

exercise at the Federal Prison Camp in Duluth, Minnesota. Gamradt took part in a

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staged scenario in which some staff, acting as prisoners, rebelled by taking hostages

and holding them in a deserted building. To aid in the simulation, several devices

were approved for use by the role players, including high-powered paint guns, flashbang grenades (grenades that made a loud bang sound when detonated), and black

smoke grenades (grenades that emitted a black smoke-like substance). Gamradt’s

team of responders were tasked with securing the building in which the hostages were

being held. His team cleared the first floor of the building, but were fired upon by the

prisoners as they approached the second floor via the stairwell. The drill called for

the use of a flash-bang grenade in order to disperse the prisoners on the second floor.

Since none were available, Gamradt’s supervisor gave the order to activate a black

smoke grenade. None of the guards were wearing gas masks, or any other protective

devices, to shield them from the pyrotechnic smoke. The black smoke grenade was

intended to be detonated in the second floor hallway. Instead, the grenade hit a

concrete wall and fell back into the stairwell, near Gamradt’s team. Gamradt was one

of fourteen participants who was affected by smoke inhalation – at least seven of

whom sought medical treatment. He has suffered from shortness of breath, persistent

coughing, and a 60% permanent loss in his aerobic capacity.

Gamradt and his wife, Carla Gamradt, filed suit against Federal Laboratories,

Inc., Mace Securities International, and Defense Technology Corporation of America

(DTCA), alleging the manufacturers failed to warn of the dangers associated with

activating a black smoke grenade in an enclosed area. After the parties stipulated to

dismissing Federal Laboratories, Inc., and Mace Securities International as

defendants, DTCA moved for summary judgment arguing that it could not be held

liable because it did not manufacture or sell the black smoke grenade at issue. Rather,

Defense Technology Corporation of America of Casper, Wyoming (DTCAWyoming) manufactured and sold the black smoke grenade to the United States

Bureau of Prisons. DTCA acquired DTCA-Wyoming after the sale of the grenade

had occurred. DTCA admitted, solely for the purposes of the summary judgment

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The Gamradts urged the district court to adopt New York law as the

substantive law of the case. The district court declined to do so, however, and the

Gamradts do not appeal that determination.

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motion, that the black smoke grenade was manufactured by DTCA-Wyoming and that

the black smoke grenade displayed no warning regarding use indoors.

The district court found that a genuine issue of material fact remained as to the

existence of a de facto merger between DTCA and DTCA-Wyoming; a fact which,

if proven at trial, could open up DTCA to liability for defective products

manufactured and sold by DTCA-Wyoming. The district court granted summary

judgment to DTCA, however, on alternate grounds. Sua sponte, the court found that

the dangers raised by the black smoke grenade were open and obvious, relieving a

manufacturer of its duty to warn of reasonably foreseeable dangers. In addition, the

court found that DTCA was not compelled to warn the Bureau of Prisons about

DTCA-Wyoming’s products because DTCA did not have knowledge of a defect, nor

did it have knowledge of the product’s location; both of which are factors when

imposing liability on a successor corporation in a failure to warn case. The Gamradts

appeal. We affirm in part and reverse in part.

ANALYSIS

We review the district court’s determination of state law, its conclusions of

law, and its grant of summary judgment de novo. See Liberty Mut. Ins. Co. v. FAG

Bearings Corp., 335 F.3d 752, 757 (8th Cir. 2003); Boerner v. Brown & Williamson

Tobacco Corp., 260 F.3d 837, 841 (8th Cir. 2001). After evaluating the facts in the

light most favorable to the nonmoving party, if no genuine issue of material fact

remains, summary judgment is appropriate. Id.; Fed. R. Civ. P. 56(c). We apply the

substantive law of Minnesota in this diversity case.1

 Karjala v. Johns-Manville Prods.

Corp., 523 F.2d 155, 158 n.4 (8th Cir. 1975) (relying on the substantive law of

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We note that even though Gamradt did not activate the black smoke grenade,

the manufacturer’s duty extends to “any person who may reasonably be expected to

be in the vicinity of [the product’s] use.” McCormack v. Hankscraft Co., 154 N.W.2d

488, 496 (Minn. 1967). 

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Minnesota, the forum state, in a product liability case). This court can affirm the

district court’s grant of summary judgment on any ground supported by the record.

Habib v. NationsBank, 279 F.3d 563, 566 (8th Cir. 2001). Here, the district court

granted summary judgment on two independent grounds; we review each in turn.

A. Open and Obvious Danger

Under Minnesota law, a manufacturer has a duty to warn consumers of

reasonably foreseeable dangers. Huber v. Niagara Mach. & Tool Works, 430 N.W.2d

465, 467 (Minn. 1988); Harmon Contract Glazing, Inc. v. Libby-Owens-Ford Co.,

493 N.W.2d 146, 151 (Minn. Ct. App. 1992). This duty is relieved, however, when

the danger the product poses is open and obvious. Indep. Sch. Dist. No. 14 v.

AMPRO Corp., 361 N.W.2d 138, 143 (Minn. Ct. App. 1985). Whether a

manufacturer has a duty to warn is a question of law decided by the court. Germann

v. F.L. Smithe Mach. Co., 395 N.W.2d 922, 924 (Minn. 1986) (“The question of

whether a legal duty to warn exists is a question of law for the court – not one for jury

resolution.”). 

The district court found that DTCA was not obligated to warn users2

 of the

dangers of using a black smoke grenade indoors because the dangers are open and

obvious. We disagree. Knowledge of the general danger associated with minor

smoke inhalation is not enough to relieve the manufacturer of its duty to warn about

foreseeable dangers associated with indoor use of a black smoke grenade. Cf.

Willmar Poultry Co. v. Carus Chem. Co., 378 N.W.2d 830, 835 (Minn. Ct. App.

1985) (“Past experience with a product, however, does not necessarily alert users to

all of the dangers associated with the product.”). The specific risk of permanent

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respiratory damage posed by using the black smoke grenade indoors must have been

obvious to the user. 

In AMPRO, a school district sued the manufacturer of foam landing mats after

two school children lighted the mats on fire. The students intended to “make a little

smoke,” but instead the mats “burned very rapidly, with intense heat, and emitted

black, dense smoke.” 361 N.W.2d at 141. In finding that the dangers posed by

igniting the mats were not open and obvious, the Minnesota Court of Appeals noted:

[The defendants], however, fail to distinguish ordinary burning from the

hot, rapid, smoky burning of which [the plaintiff] presented evidence.

This is a different, more serious, and more unexpected danger than that

posed by ordinary flammable items. Such a danger is not obvious, and

while [the plaintiff] admitted knowing that [the mats] might burn, it

indicated no knowledge of the speed or intensity with which they

burned.

Id. at 143. 

In this case, while it may be obvious that a black smoke grenade may emit an

opaque gas, and it may be obvious that the substance could cause minor discomforts,

we do not think it is obvious that a person could permanently lose 60% of his aerobic

capacity as a result of being exposed to a black smoke grenade that was detonated

indoors. According to the black smoke grenade’s Material Safety Data Sheet, a

document provided by the manufacturer, the hazardous ingredients contained in the

grenade are: zinc oxide, hexachloroethane, and aluminum powder. In the health

hazards section of the same form, the symptoms of exposure include “in high

concentrations . . . a narcotic effect,” and potential kidney and liver damage. (J.A. at

14.) We do not think that the exact nature and effects of the smoke-causing agents

contained in the black smoke grenade, as detailed by the Material Safety Data Sheet,

are open and obvious.

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Because the district court, sua sponte, chose the “open and obvious danger”

ground as one of its bases for granting summary judgment, the parties did not have

a chance to develop the record below as fully as they might have had they been given

notice that this legal theory would decide the case. See Williams v. City of St. Louis,

783 F.2d 114, 116 (8th Cir. 1986) (stating that the district court should have given the

plaintiffs notice of its intention to rely on a particular legal theory when that theory

was not raised in defendant’s summary judgment motion so that the plaintiffs could

have a meaningful opportunity to respond). Given our view of the dangers based on

the existing record, however, a remand on this issue is unnecessary.

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After reviewing the record,3

 it appears that black smoke grenades serve a dual

purpose: to disperse a crowd and to create a visual screen so that one’s maneuvers are

shielded from view. In order to assess the risk posed by using a black smoke grenade

indoors, one must be able to discern how the black smoke grenade accomplishes these

goals. One could easily conclude that the ingredients used to create the visual screen

are not toxic, or even akin to smoke at all; or, that the dispersing qualities of the black

smoke grenade are merely minor irritants caused by a light layer of smoke. Such a

conclusion would have been incorrect in this case. Gamradt’s injuries are proof that

the hazardous materials contained in the black smoke grenade can cause permanent

injuries if the grenade is detonated in a confined space. Quite obviously, the dangers

posed by activating a black smoke grenade indoors are “different, more serious, and

more unexpected” than the general dangers of detonating a black smoke grenade

outdoors. AMPRO, 361 N.W.2d at 143.

B. Successor Corporation’s Duty To Warn

We now must address what the district court terms as its alternative ground for

granting summary judgment to DTCA. Under Minnesota law, a duty to warn can be

imposed on a successor corporation only after considering the following, nonexhaustive, list of relevant factors: “Succession to a predecessor’s service contracts,

coverage of the particular machine under a service contract, service of that machine

by the purchaser corporation, [and] a purchaser corporation’s knowledge of defects

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and of the location or owner of that machine.” Niccum v. Hydra Tool Corp., 438

N.W.2d 96, 100 (Minn. 1989). The crux of the inquiry is whether the successor

corporation has benefitted economically from its relationship with the predecessor’s

customers. Restatement (Third) of Torts: Prods. Liab. § 13 cmt. b; Sherlock v.

Quality Control Equip. Co., 79 F.3d 731, 734 (8th Cir. 1996) (applying Missouri law,

which utilizes the same factors as Minnesota in determining whether the successor

corporation is obligated to warn consumers of dangers from a predecessor’s

products); accord Leannais v. Cincinatti, Inc., 565 F.2d 437, 442 (7th Cir. 1977). 

Focusing exclusively on the last two factors – whether DTCA had knowledge

of defects in the black smoke grenades and knew where the grenades were sold – the

district court found that the Gamradts had not proven DTCA had a duty to warn

DTCA-Wyoming’s customers of dangers posed by detonating a black smoke grenade

indoors. We agree that the Gamradts have not created a genuine issue of material fact

on this issue. To the district court and on this appeal, the only argument that the

Gamradts advance is that after the sale of DTCA-Wyoming, DTCA had a copy of

DTCA-Wyoming’s customer list and the Material Safety Data Sheet for the black

smoke grenade. These facts, however, do not demonstrate that DTCA had any kind

of continuing, economically advantageous relationship with DTCA-Wyoming’s

customers. There is no indication that DTCA used the customer lists to their

advantage – the only proof that DTCA possessed the customer lists is contained in

the sale agreement. 

More importantly, even if the Gamradts could prove that DTCA benefitted

from DTCA-Wyoming’s customer lists, there is no suggestion that DTCA was aware

of the defect in the black smoke grenade. The defect, as alleged in the complaint, is

the lack of warning on the grenade cautioning against inside use. In order for DTCA

to be obligated to warn DTCA-Wyoming’s customers of this defect, it would have to

know that some of the black smoke grenades were not properly labeled. There is no

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We note that the issue of whether a warning was in fact affixed to the black

smoke bomb remains undecided, as DTCA admitted only for purposes of this

summary judgment motion that there was no warning.

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evidence to this effect. DTCA cannot owe a duty to warn about a defect it did not

know existed. See Niccum, 438 N.W.2d at 100. 

C. De Facto Merger

Even though DTCA did not have an independent duty to warn DTCAWyoming’s customers, that does not mean that DTCA escapes liability altogether.

The district court found that an issue of fact was created as to whether a de facto

merger between DTCA and DTCA-Wyoming occurred. If proven at trial, this could

make DTCA liable for DTCA-Wyoming’s failure to label the black smoke grenades

with appropriate cautions regarding indoor use. While a successor corporation

generally cannot be held liable for the debts and liabilities of the predecessor

corporation, there is an exception “where the transaction amounts to a consolidation

or merger of the corporation.” J & B Co. v. Bellanca Aircraft Corp., 911 F.2d 152,

153 (8th Cir. 1990) (per curiam). Therefore, the nature of DTCA-Wyoming’s sale to

DTCA may have resulted in DTCA assuming liability for DTCA-Wyoming’s failure

to warn. A genuine issue of material fact on this issue remains. 

CONCLUSION

In sum, we find that the dangers associated with using a black smoke grenade

indoors were not open and obvious; that DTCA did not have an independent duty to

warn DTCA-Wyoming’s customers of the dangers of using the black smoke grenade

indoors; and, that an issue of fact remains as to whether DTCA could be liable for

DTCA-Wyoming’s failure to place a warning on the black smoke grenade.4

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Accordingly, we affirm in part, reverse in part, and remand for further proceedings

consistent with this opinion.

______________________________ 

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