The HONORABLE E. RICHARD WEBBER, United States District Judge for * the Eastern District of Missouri, sitting by designation.



## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 97-2510

___________ Mark Vandelune and Julie Vandelune, * individually and as parents of Chelsea * Vandelune and Tasia Vandelune, * * Plaintiffs - Appellants, * Appeal from the United States * District Court for the v. * Northern District of Iowa. * 4B Elevator Components Unlimited; * Synatel Instrumental Ltd., * * Defendants - Appellees. *

___________ Submitted: January 16, 1998 Filed: June 30, 1998

___________ Before LOKEN and MURPHY, Circuit Judges, and WEBBER, District Judge. *

___________ LOKEN, Circuit Judge.

Plaintiff Mark Vandelune was seriously injured in a grain dust explosion while working at the Consolid ated Cooperative Grain Elevator (“Consolidated”) in Gowrie, Iowa. Contending that a faulty M700 Speedswitch Monitor proximately caused the-2-

explosion and injury, Van delune commenced this product liability suit against Synatel Instrumentation Ltd. (“Synatel”), the British manufacturer of the M700, and 4 B Elevator Comp onents Ltd. (“4B”), its independent distributor. Vandelune’s wife and two children also sued, claiming loss of consortium. The district court granted 4B’ s motionfor summary judgment, denied the Vandelunes’ motion to amend thei r comp laint against 4B, and dismissed Synatel for lack of personal jurisdiction. Th e Vandelunes appeal. We affirm as to 4B but reverse and remand as to Synatel.

I. Defendant 4B

When an elevator leg becomes plugged with grain, the conveyor belt may slip
caus ing friction and heat, which can ignite grain dust. Federal safety regulation s re quire that most grain elevators be equipped with a motion sensor that will stop th e co nveyer belt when its speed is reduced by twenty percent of its normal operatin g speed. See 29 C. F.R. § 1910.272(q)(5). The M700 is one such device manufactured by Synatel of Staffordshire, England. Consolidated’s el evator at Gowrie was equipped with the M700 at the time of the October 1994 explosion. Synatel sold the M700 in question to Braime Elevator Components, Ltd., o f Le eds, England. Braime sold the M700 to 4B, a Braime affiliate located in Peoria , Illinois. In early 1994, 4B sold the M700 to Keith’s Complete Service (“Keith’s”) of Boone, Iowa. Keith’ s sold the M700 to Consolidated to replace an M700 installed in 1992 by a local electric ian. Keith’s owner, Keith Pfrimmer, who is not an electrician, installed the replacement M700 in the Gowrie elevator’s west leg, wiring the ne w M700 in the same manner as the one it replaced.

The M7 00 was designed with two safety features that a customer may -- bu t
n e ed not -- connect at installation. The first is a warning light or siren intended to be trigger ed when conveyor belt speed is reduced by ten percent of normal operatin g speed. The second automatically stops the conveyer belt when its speed falls to twenty-3-

p e rcent below normal operating speed. Pfrimmer did not connect the twenty percent shutdown feature because Cons olidated’s electrician had left that feature unconnected on the M700 Pfrimmer was replacing. The Vandelunes’ expert tested the M700 after the explosion and determined that its ten percent warning device malfunctioned, in that it wa s not triggered until the conveyor belt speed was reduced by more than twent y percent. The Vandelunes assert claims against 4B (and Synatel) for negligent failure to w arn that the twenty percent safety feature should be connected and for negligen t manufacture and testing of the malfunctioning M700. The district court granted summary judgment dismissing these clai ms against 4B. On appeal, we review the grant of summary judgment de nov o, examining the evidence in the light most favorable to the nonmoving party, in this case the Vandelunes. See Fed. R. Civ. P. 56(e); Bituminous Cas. Corp. v. Tonka Corp. , 9 F.3d 51, 52 (8th Cir. 1993), c ert. denied , 511 U.S. 1083 (1994). To establish a claim of negligence, th e Vandelunes must prove that 4B owed a duty to conform to a given st andard of conduct, that 4B’s brea ch of that standard was a proximate cause of Mark Vandelune’s injury, and damages. See Gremmels v. Tandy Corp. , 120 F.3d 103, 105 (8th Cir. 1997).

Failure To W arn. The M700 instructions told users and installers how t o connect th e ten percent safety alarm and the twenty percent shutdown features

. Relying upon the deposition testimony of their expert, the Vandelunes argue that 4 B
was neglig ent in failing to specifically warn grain elevator customers that OSH A regulations require them to connect the M700’s twenty percent shutdown feature. The distri ctcourt rejected this claim for two independent reasons: because there is n o evidence that 4B should have known that grain elevator users would not connect the tw enty percent safety feature, and because any failure to warn was not a proximat e cause of the explosion since Pfrimmer knew of the OSHA requirement and did not look at the M700 instructions when installing the replacement at Consolidated’s elevator.-4-

The Supreme Court of Iowa has adopted § 388 of the Restatement (Second) of Torts to determine whether a ma nufacturer or supplier has satisfied its duty to warn of
a product’s dangerous propensities. “[T]he duty to warn is based upon superio r knowledge of the manu facturer or supplier as to the dangers a certain product poses.” Lamb v. Manitowoc Co. , 570 N.W.2d 65, 68 (Iowa 1997); see Nichols v. Westfield Indus., Ltd. , 380 N.W.2d 392, 401 (Iowa 1985). “[T]here is no duty to warn if the user knows or s hould know of the potential danger, especially when the user is a professional who should be aware of the chara cteristics of the product.” Strong v. E.I. DuPont de N emours Co. , 667 F.2d 682, 687 (8th Cir. 1981) (applying Restatemen t § 388 under Nebraska law). Here, OSHA regulations imposed a duty on Consolidated, the purchaser of the M700, to install a motion sensor device with a twenty percen t
s h utdown feature. Though 4B sold equipment to grain elevators and doubtless knew of the risks of grain dust explosions, it did not have greater knowledge of such risk s than its ultimate customers. Moreover, the M700 did not create an explosion risk; it was designed to alleviate a risk the customer its elf creates. In these circumstances, we agree with the district court that 4B had no duty to warn.

A l ternatively, even if 4B owed a duty to warn, we agree with the district court that any breach

of that duty was not a proximate cause of Mark Vandelune’s injuries. Pfrimmer testified he was aware of the OSHA regulation requiring a twenty percen t shu tdown feature but nevertheless did not connect that feature on the new M70 0 because he simply duplicated the wiring of t he M700 being replaced. The record does not reflect why Consolidated instructed its electrician not to connect the shutdow n feature on the first M700, thereby violating the OSHA regulati on. Moreover, Pfrimmer did not even consult the M700 instructions and warnings in performing hi s work. Thus, 4B’s lack of an explicit warning was not a proximate cause of the explosion.
Negligent Manufacture and Testing. The Vandelunes contend that the M700
was n egligently manufactured, tested, and inspected because the ten percent safet y feature malfunctioned when tested by their expert after the explosion. The Vandelunes-5-

acknowl edge that 4B received the M700 in a sealed box and did not open the bo x before r eshipping the product ten days later. But they argue 4B is liable for thi s negligence becaus e the M700 was designed and manufactured “in joint cooperation” between Synatel, Braime, and 4B. The district court dismissed these claims because th ere is no evidence 4B negligently designed or manufactured the M700 and n o evidenc e 4B had reason to believe the M700 was not reasonably safe for its intended use. We agree. Whatever the involvement of Braime i n inducing Synatel to design the M700 for the United

States market, there is no evidence 4B participated in the design and manufacture of that product in England. Therefore, 4B as reseller cannot be liable for negligent manufacture. See Nichols , 380 N.W.2d at 397. Likewise, 4B cannot be liable for negligent failure to inspect or test because there is no evidence it knew or had
reason to know that the M700 “is, or is likely to be, dangerous.” Spaur v. Owens

Co rning Fiberglas Corp. , 510 N.W.2d 854, 864 (Iowa 1994), quoting Restatemen t (Second) of Torts § 402.

Denial of Motion To Amend. After the district court dismissed Synatel for lack of personal jurisdiction, the Vandelunes moved to amend their complaint to add claims ag ainst 4B for strict liability and breach of the implied warranty of merchantability

. The district c ourt denied this motion as futile under I OWA C ODE A NN . § 613.18(1)(a), a 1986 statute granting resellers who did not design or manufacture a product immunity from such claims arising “solely from an alleged defect in the original design o r manufacture of the product.” On appeal, the Vandelunes argue that the district court abused its discretion in deny ing their motion to amend, relying on prior Iowa case law without discussing § 613.18(1)(a). We conclude the distr ict court properly applied this new statute. See Bingham v. Marshal l & Huschart Mach. Co. , 485 N.W.2d 78, 79-80 (Iowa 1992). Thus, there was no abuse of discretion in denying the motion to amend.

The district court properly granted summary judgment dismissing the claims of Mark Vandelune against 4B. There fore, the derivative claims of his wife and children-6-

against 4B also fail. See St. John v. Interna tional Ass’n of Machinists , 139 F.3d 1214, 1217 n.1 (8th Cir. 1998).
II. Defendant Synatel Synatel moved

to dismiss for lack of personal jurisdiction. See Fed. R. Civ. P. 12(b)(2). The distri ct court concluded that Synatel was properly served under Iowa’s long-arm statute, I OWA C ODE A NN . § 617.3, and Synatel d oes not challenge that ruling. The q uestion then is whether exercise of personal jurisdiction comports with du e process, a question th at turns on whether Synatel had the requisite minimum contacts wi ththe forum State of Iowa. This requirement is satisfied “if the defendant ha s ‘purposefully directed’ his activitie s at residents of the forum, and the litigation results from alleged injuries that ‘arise out of or relate to’ those acti vities.” Burger King Corp. v. Rudzewicz , 471 U.S. 462, 472 (1985) (citations omitted).
The due process issue in this case is a recurr ing one -- when may an out-of-state or foreign manufacturer be required to defend product liability claims in the forum State of the inj ured plaintiff. The district court concluded that exercise of persona l jurisdi ction over Synatel would not comport with due process because “the onl y indicat ionof any contact by Synatel with the state of Iowa is evidence that Synate l placed its product, the M700 Speedswitch Monitor, into the stream of commerce in the United States and the product ended up i n the state of Iowa.” In concluding this is not acti on “purposefully directed toward the forum state,” the court relied upon the lea d
o p inion in Asahi Metal Indus. Co. v. Superior Court , 480 U.S. 102, 112 (1987). But th e court erred in overlooking our recent opinion in Barone v. Rich Bros. Interstat e Display Fireworks Co. , 25 F.3d 610 (8th Cir.), cert. denied sub nom. Hosoya Fireworks Co. v. Barone , 513 U.S. 948 ( 1994). We explained in Barone

that the Supreme Court in Asahi split four-to- four on the broad question whether introducing products into the “stream of commerce” satisfies-7-

the due process requirement of minimum contacts in a product liability case. Thus, this remains an open question. Moving to a more fact intensive analysis, we acknowledged in Barone th at a manufacturer whose product ends up in the forum State on a n “attenuated, random , or fortuitous” basis has not purposefully directed its activities at resid ents of that State. That is the teaching of Burger King , 471 U.S. at 475, an d World-Wide Volkswagen Corp. v. Woodson , 444 U.S. 286, 296 -97 (1980). It was the fac t pattern in our post- Asahi cases on which the district court relied, Gould v. P.T

. Krakatau Steel , 957 F.2d 573, 576 (8th Cir.), cert. denied , 506 U.S. 908 (1992), and Falkirk Min. Co. v. Japan Steel Works, Ltd. , 906 F.2d 369, 375 (8th Cir. 1990). But we distinguished those cases in Barone , concluding that, when a foreign manufacturer “pour[s] its products” into a regional distributor with the expectatio n that the distributor will p enetrate a discrete, multi-State trade area, the manufacturer has “purposefull y reaped the benefits” of the laws of each State in that trade area for due proces s purposes. 25 F.3d at 615.

Barone controls the personal jurisdiction issue raised by this appeal. It is true t h at Synatel is a foreign corporation having no office, agents, employees, or property in the State of Iowa, and that Synatel neither advertises nor directly solicits business in Iowa. Tho se are facts supporting its motion to dismiss for lack of persona l jurisdiction. But, as Barone illustrates, the absence of this kind of direct marketin g pr esence does not necessarily mean that Synatel has not purposefully marketed th e M700 in Iow a. The discovery record reflects that, at the urging of Braime, Synate l designed the M700 for United States markets, particularly the substantial grain elevator market. Synatel agreed to distribute the M700 through a Braime affiliate, 4B. Synatel put its distinctive “Owl” logo and an identifying 4B decal on each M700. Synate l shipped some M700s directly to 4B at the request of Braime, and Synatel employees attended technical support meetings at 4B ’s facilities in Peoria, Illinois, which is about eighty miles from the Iowa border. Between October 1, 1993, and September 30 , 1994, Synatel sold 619 M700s to 4B, 81 of which were resold into Iowa. These are not “attenuated, random, or fortuitous” contacts with the forum State.-8-

When t he district court has resolved an issue of personal jurisdiction without a trial or evidentia

ry hearing, as in this case, we review de novo whether plaintiffs have made a prima facie showing of personal jurisdicti on, viewing the facts in the light most favorable to them. See Dakota Indus., Inc. v. Dakota Spor tswear, Inc. , 946 F.2d 1384, 1387 (8th Cir. 1991). We conclude that the Vandelunes have made such a showing in this case, and therefore Synatel’s motion to dismiss for lack of personal jurisdictio n should have been denied. The judgment of the district court in favor of defendant 4B Elev ator Components Unlimited is affirmed. The judgment in favor of Synatel Instrumental Ltd., is reversed and the case is remanded for further proceedings not inconsistent with this opinion.
A true copy.

Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.