1 Chief Judge of the Eastern District of Texas, sitting by designation. United States Court of Appeals,

Fifth Circuit.

No. 91-7253.

Paul CROSS and Beverly Cross, Plaintiffs-Appellants,

v.

CUMMINS ENGINE COMPANY, et al., Defendants.

Cummins Engine Company, Defendant-Appellee.

June 16, 1993.

Appeal from the United States District Court for the Northern District of Mississippi.

Before DAVIS and JONES, Circuit Judges, and PARKER 1 , District Judge.

PER CURIAM:

Plaint iffs brought this diversity action seeking recovery for personal injuries against Cummins

Engine Company (Cummins) and Freightliner Corporati on (Freightliner). The district court granted

summ ary judgment for Cummins, dismissing Cross's claims against Cummins. The district court

found there was sufficient proof in the record to sustain the plaint iffs' claims against Freightliner. The

Crosses subsequently entered into a settlement agreement with Freightliner. Plaintiffs appeal from

the o rder dismissing their claims against Cummins. We vacate the district court's order granting

summary judgment for Cummins and remand this case to the district court for further proceedings.

FACTS

Appellant Paul Cross was severely burned on August 26, 1983, in a gasoline fire. Cross, a

tank truck driver, was unloading gasoline from his truck into an above ground storage tank at a

convenience store. The pump used to transfer the gasoline was driver by a po wer take off (PTO)

assembly attached to the truck engine, which required that the truck be left idling during the transfer.

After some period of pumping, the storage tank began to overflow, dumping gasoline on the ground

aro und the truck. Cross attempted to turn off the truck engine, but was engulfed in flames as the

gasoline ignited.Appellant contends that a cause of the explosion and fire was a condition known as

overspeeding. Although Cummins disputes this allegation, for purposes of the appeal of summary

judgment, we will take appellant's allegation as true.

A diesel engine is designed to operate on a specific ratio of air to liquid fuel. The speed of

the engine is det ermined by the mechanical load on the engine and the amounts of air and fuel

available. Engine speed is regulated by a governor which monitors the revolutions per minute and

adjusts the fuel flow to the cylinders. Gasoline produces highly combustible vapors when exposed

to air. Vapors from a gasoline spill may enter the engine through the air intake ports. This additional,

unregulated source of fuel can cause the engine to accelerate uncontrollably. A diesel engine may

accelerate to the point of self destruction, and can become an ignition source, turning the cloud of

combustible vapor into an explosion and fire.

A relatively inexpensive a ir int ake shutoff valve is available which, when attached to the

engine, would prevent overspeeding. No air intake shutoff valve was attached to the engine of the

truck appellant was driving the day of the accident.

Cummins designed and built the engine involved in the instant case. Cummins shipped the

en gine t o Freightliner as a stock item on December 11, 1980. Freightliner assembled the truck as

manufacturer, incorporating the stock engine built by Cummins. Cummins had actual knowledge that

a dangerous condition is created when its diesel engine is operated in an environment containing

volatile fumes. The summary judgment evidence, though perhaps not uncontested, indicat es t hat

Freightliner was also aware of this danger. Cummins' appreciation of this danger led it to design and

manufacture an air intake shutoff valve, which it makes available as an optional item on its engines.

Cummins contends that it does not install the devices. However, we are unable to conclude from the

record before us that this is an undisputed fact.

Freightliner provides a driver's manual for each truck it assembles. Cummins also provides

an engine owner's manual that accompanies the truck into which it is installed. Neither manual

contained warnings about the danger of overspeeding.

The district court, applying Tennessee law, granted summary judgment to Cummins on theplaint iffs' strict liabilit y, negligence, and gross negligence claims. It concluded that Cummins could

not be held liable because there was no evidence that an air intake shut-off device is necessary for all

diesel engines in all circumstances, Cummins was unaware of the intended use of its engine, and only

Freightliner had control over whether the device was placed in a particular vehicle. The district court

also dismissed the plaint iffs' failure to warn claims against Cumm ins. It concluded that Cummins

adequately warned Freightliner about the overspeeding phenomenon and, therefore, reasonably relied

on Freightliner to convey those warnings to its customers. This appeal followed.

STANDARD OF REVIEW

Appellate review of a summary judgment is governed by the same legal standard applied by

the district court in the first instance. B eck v. Somerset Technologies, Inc., 882 F.2d 993, 996 (5th

Cir.1989). Summary judgment is appropriate only if there are no genuine issues of material fact and

t he mo vant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A factual disput e is

deemed "genuine" if a reasonable juror could return a verdict for the nonmovant and a fact i s

considered "material" if it might affect the outcom e of the lawsuit under the governing substantive

law. B eck, 882 F.2d at 996, citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505,

91 L.Ed.2d 202 (1986 ). Although this court has upheld grants of summary judgment in certain

products liabilit

y and negligence actions where the claims clearly lacked an evidentiary basis, we have

cautioned that "the use of summary judgment is rarely appropriate in negligence or produce liabilit y

cases, even where the material facts are not disputed." Trevino v. Yamaha Motor Corp., 882 F.2d

182 (5th Cir.1989).

CHOICE OF LAW

In Mitchell v. Craft, 211 So.2d 509 (Miss.1968), the Mississippi Supreme Court adopted the

"center of gravity" test for substantive choice of law purposes. Although the truck was manufactured

in North Carolina, and the accident occurred in Mississippi, the plaint iffs are domiciled in Tennessee.

Furthermore the inspection, s ale and purchase of the truck, the installation of the PTO pump, and

some subsequent repairs to the tru ck were performed in Tennessee. As a consequence, the lower

court held that Tennessee's substan t ive law should apply to the negligence and products liability2 Tenn.Code Ann. § 29-28-105(a) provides that:

A manufacturer or seller of a product shall not be liable for any injury to person or

property caused by the product unless the product is determined to be in a

defective condition or unreasonably dangerous at the time it left the control of the

manufacturer or seller.

Tenn.Code Ann. § 29-28-102 provides in relevant part:

(2) "Defective condition" means a condition of a product that renders it unsafe for

normal or anticipatable handling and consumption.

(8) "Unreasonably dangerous" means that a product is dangerous to an extent

beyond that which would be contemplated by the ordinary consumer who

purchases it, with the ordinary knowledge common to the community as to its

characteristics, or that the product because of its dangerous condition would not

be put on the market by a reasonably prudent manufacturer or seller assuming that

he knew of its dangerous condition. causes of action. Appellants st at e in a fo otnote that there are a sufficient quantity and quality of

connections with Mississippi to require application of Mi ssissippi substantive law. However, the

f ootnote concludes that insofar as the issues on this appeal are concerned, there ar e no major

differences in the substantive law of the two states, and stops short of urging us to reverse the district

court's choice of law holding. Based on the foregoing, we will not disturb the district court's decision

in this regard, and will apply Tennessee law.

MERITS

The Cross's action against Cummins is predicated on Tennessee's Products Liabilit y Act of

1978, codified at Tenn.Code Ann. §§ 29-28-101 to 108. 2 The summary judgment record presented

a clear jury question of whether the vehicle was unreasonably dangerous without an air intake shutoff

valve. The question presented to us is where Tennessee would place the responsibility for the design

defect. The possible candidates are (1) Cummins, as the manufacturer of the engine, (2) Freightliner,

as assembler of the various component parts, including the Cummins engine, into a final product, or

(3) both the component part manufacturer and the assembler.

Courts have adopted two competing approaches for determining the liabilit y of a component

part manufacturer for a design or warning defect that could have been prevented by either a

comp o nent part manufacturer or an assembler of a finished product. The first approach, whichoriginated with Verge v. Ford Motor Co., 581 F.2d 384 (3rd Cir.1978), as ks whether there was a

design or warning defect in the finished product. It then chooses whether the component part

manufacturer or the assembler should be responsible for the defect by looking to such factors as trade

cust o m, expertise, and practicality. The second approach, typified by U nion Supply Compan y v.

Pust, 196 Colo. 162, 583 P.2d 276 (1978), asks only if there was a design or warning defect in the

finished product. If there was, both the component part manufacturer and the assembler may be held

liable.

In Verge, a garbage worker suffered a broken leg when a co-worker backed into him with a

garbage truck. V

erge, 581 F.2d at 385. He then sued Ford Motor Company under § 402(A) of the

Restatement (2d) of Torts, alleging that the garbage truck should have been equipped with a buzzer

that would sound when the truck was put into reverse ge ar. Verge, 581 F.2d at 386. Ford had

manufactured the truck's cab and chassis. The garbage truck's assembler, Leach, had then cut 4 to

6 feet from the chassis, put the compactor on the chassis, and made electrical hook-ups. V erge, 581

F.2d at 387.

The Third Circuit analyzed the case as presenting two issues: (1) was there a defect?; and

(2) if so, who is responsible for it? To answer the second question, it looked to three factors: trade

custom, relative expertise, and practicality. V erge, 581 F.2d at 387. The court suggested that these

factors were relevant to a determination of whether the product was defective wh en it left the

manufacturer's hands. V

erge, 581 F.2d at 386. The court then concluded that Ford could not be held

liable for the defect—evidence of trade custom pointed in neither direction; Leach was more expert

than Ford in its design of garbage trucks; and Ford's installation of the buzzer would not be practical

because th e chassis could be modified for a number of purposes that would not require a backup

buzzer. Verge, 581 F.2d at 388.

In Union Supply, an employee of a sugar beet refinery caught his arm in a conveyor belt.

Union Supply Co. had supplied the conveyor to the employer, Holly Sugar. At the site, Holly Sugar

had added a m

otor, co nveyo r belt , electrical controls, legs, stairs and walkways, and the

counterweight. U

nion Supply, 583 P.2d at 279. The employee brought strict liability claims againstUnion Supply, alleging design defects (lack of safety devices), and warning defects. U nion Supply,

583 P.2d at 279.

The court concluded that a jury could find that both Union Sup ply and Ho lly Sugar were

designers of the conveyor belt. U nion Supply, 583 P.2d at 281. It also rejected Union Supply's

attempt to introduce evidence that it reasonably expected Holly Sugar to add safety guards:

In strict liabilit

y cases, we are not concerned with who had the duty to provide guards, but

rather with whether the conveyor was in a defective condition unreasonably d angerous

because of the failure to provide sa fet y guards before it reached the ultimate user or the

consumer.

Union Supply, 583 P.2d at 283.

Tennessee's High Court has not had occasion to choose between these competing approaches.

However at least one intermediate Tennessee appeals court has confronted a similar issue and cited

the Verge decision and rationale with approval. B lacksher v. Ft. Worth Steel & Machiner y Co.,

Prod.Liab.Rep. ¶ 8580 (Tenn.App.1979).

We find no other relevant Tennessee authority on this ques t ion. In predicting how the

Tennessee Supreme Court would decide this question, we ordinarily give due regard to opinions by

state appellate courts "unless we are convinced by other persuasive data that the highest court of the

state would decide otherwise." T ranscontinental Gas v. Transportation Ins. Co., 953 F.2d 985, 988

(5th Cir.1992). No other persuasive data has come to our attention and we conclude that the

Tennessee Supreme Court would follow the Verge line of authority.

Applying the Verge reasoning to this case, Cummin s did not present adequate summary

judgment evidence on the Verge factors: trade customs, relative expertise and practicality. Thus

factual issues are present ed on whether Cummins was responsible for warning of the defect in

question. If the facts are resolved in favor of Cross on this issue, a further fact issue is presented on

whether Cummins's warnings to Freightliner discharged that responsibility. Because the record does

not support the summary judgment, that judgment is vacated and the case is remanded to the district

court for further proceedings consistent with this opinion.

CONCLUSION

For the above reasons, we vacate the district court's summary judgment in favor of Cummins,and remand this case to the district court for further proceedings consistent with this opinion.

VACATED and REMANDED.

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