Opinion ID: 787429
Heading Depth: 2
Heading Rank: 2

Heading: Successor Corporation's Duty To Warn

Text: 13 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, non-exhaustive, 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 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. Cincinnati, Inc., 565 F.2d 437, 442 (7th Cir.1977). 14 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. 15 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 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.