Court Opinion

ID: 3020802
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:23:33.205934+00
Date Added: 2024-06-11T11:46:11.056570
License: Public Domain

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 Consolidated Cooperative Grain Elevator (“Consolidated”) in Gowrie,
Iowa. Contending that a faulty M700 Speedswitch Monitor proximately caused the

      *
       The HONORABLE E. RICHARD WEBBER, United States District Judge for
the Eastern District of Missouri, sitting by designation.
explosion and injury, Vandelune commenced this product liability suit against Synatel
Instrumentation Ltd. (“Synatel”), the British manufacturer of the M700, and 4B
Elevator Components Ltd. (“4B”), its independent distributor. Vandelune’s wife and
two children also sued, claiming loss of consortium. The district court granted 4B’s
motion for summary judgment, denied the Vandelunes’ motion to amend their
complaint against 4B, and dismissed Synatel for lack of personal jurisdiction. The
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
causing friction and heat, which can ignite grain dust. Federal safety regulations
require that most grain elevators be equipped with a motion sensor that will stop the
conveyer belt when its speed is reduced by twenty percent of its normal operating
speed. See 29 C.F.R. § 1910.272(q)(5). The M700 is one such device manufactured
by Synatel of Staffordshire, England. Consolidated’s elevator 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., of
Leeds, 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 electrician. Keith’s owner, Keith Pfrimmer, who is not an electrician,
installed the replacement M700 in the Gowrie elevator’s west leg, wiring the new
M700 in the same manner as the one it replaced.

       The M700 was designed with two safety features that a customer may -- but
need not -- connect at installation. The first is a warning light or siren intended to be
triggered when conveyor belt speed is reduced by ten percent of normal operating
speed. The second automatically stops the conveyer belt when its speed falls to twenty

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percent below normal operating speed. Pfrimmer did not connect the twenty percent
shutdown feature because Consolidated’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 was not triggered until the conveyor belt speed was reduced by more than twenty
percent. The Vandelunes assert claims against 4B (and Synatel) for negligent failure
to warn that the twenty percent safety feature should be connected and for negligent
manufacture and testing of the malfunctioning M700.

       The district court granted summary judgment dismissing these claims against 4B.
On appeal, we review the grant of summary judgment de novo, 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), cert. denied, 511 U.S. 1083 (1994). To establish a claim of negligence, the
Vandelunes must prove that 4B owed a duty to conform to a given standard of conduct,
that 4B’s breach 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 Warn. The M700 instructions told users and installers how to
connect the ten percent safety alarm and the twenty percent shutdown features.
Relying upon the deposition testimony of their expert, the Vandelunes argue that 4B
was negligent in failing to specifically warn grain elevator customers that OSHA
regulations require them to connect the M700’s twenty percent shutdown feature. The
district court rejected this claim for two independent reasons: because there is no
evidence that 4B should have known that grain elevator users would not connect the
twenty percent safety feature, and because any failure to warn was not a proximate
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.

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       The Supreme Court of Iowa has adopted § 388 of the Restatement (Second) of
Torts to determine whether a manufacturer or supplier has satisfied its duty to warn of
a product’s dangerous propensities. “[T]he duty to warn is based upon superior
knowledge of the manufacturer 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 should know of the potential danger, especially when the user is a
professional who should be aware of the characteristics of the product.” Strong v. E.I.
DuPont de Nemours Co., 667 F.2d 682, 687 (8th Cir. 1981) (applying Restatement
§ 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 percent
shutdown 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 risks
than its ultimate customers. Moreover, the M700 did not create an explosion risk; it
was designed to alleviate a risk the customer itself creates. In these circumstances, we
agree with the district court that 4B had no duty to warn.

       Alternatively, 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 percent
shutdown feature but nevertheless did not connect that feature on the new M700
because he simply duplicated the wiring of the M700 being replaced. The record does
not reflect why Consolidated instructed its electrician not to connect the shutdown
feature on the first M700, thereby violating the OSHA regulation. Moreover, Pfrimmer
did not even consult the M700 instructions and warnings in performing his 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 negligently manufactured, tested, and inspected because the ten percent safety
feature malfunctioned when tested by their expert after the explosion. The Vandelunes

                                          -4-
acknowledge that 4B received the M700 in a sealed box and did not open the box
before reshipping the product ten days later. But they argue 4B is liable for this
negligence because the M700 was designed and manufactured “in joint cooperation”
between Synatel, Braime, and 4B. The district court dismissed these claims because
there is no evidence 4B negligently designed or manufactured the M700 and no
evidence 4B had reason to believe the M700 was not reasonably safe for its intended
use. We agree. Whatever the involvement of Braime in 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-
Corning Fiberglas Corp., 510 N.W.2d 854, 864 (Iowa 1994), quoting Restatement
(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
against 4B for strict liability and breach of the implied warranty of merchantability.
The district court denied this motion as futile under IOWA CODE ANN. § 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 or
manufacture of the product.” On appeal, the Vandelunes argue that the district court
abused its discretion in denying their motion to amend, relying on prior Iowa case law
without discussing § 613.18(1)(a). We conclude the district court properly applied this
new statute. See Bingham v. Marshall & 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. Therefore, the derivative claims of his wife and children

                                           -5-
against 4B also fail. See St. John v. International 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 district court concluded that Synatel was properly served under Iowa’s
long-arm statute, IOWA CODE ANN. § 617.3, and Synatel does not challenge that ruling.
The question then is whether exercise of personal jurisdiction comports with due
process, a question that turns on whether Synatel had the requisite minimum contacts
with the forum State of Iowa. This requirement is satisfied “if the defendant has
‘purposefully directed’ his activities at residents of the forum, and the litigation results
from alleged injuries that ‘arise out of or relate to’ those activities.” Burger King Corp.
v. Rudzewicz, 471 U.S. 462, 472 (1985) (citations omitted).

       The due process issue in this case is a recurring one -- when may an out-of-state
or foreign manufacturer be required to defend product liability claims in the forum State
of the injured plaintiff. The district court concluded that exercise of personal
jurisdiction over Synatel would not comport with due process because “the only
indication of any contact by Synatel with the state of Iowa is evidence that Synatel
placed its product, the M700 Speedswitch Monitor, into the stream of commerce in the
United States and the product ended up in the state of Iowa.” In concluding this is not
action “purposefully directed toward the forum state,” the court relied upon the lead
opinion in Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 112 (1987). But
the court erred in overlooking our recent opinion in Barone v. Rich Bros. Interstate
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

                                            -6-
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 that a manufacturer whose product ends up in the forum State on an
“attenuated, random, or fortuitous” basis has not purposefully directed its activities at
residents of that State. That is the teaching of Burger King, 471 U.S. at 475, and
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 296-97 (1980). It was the
fact 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 expectation that the distributor
will penetrate a discrete, multi-State trade area, the manufacturer has “purposefully
reaped the benefits” of the laws of each State in that trade area for due process
purposes. 25 F.3d at 615.

       Barone controls the personal jurisdiction issue raised by this appeal. It is true
that 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. Those are facts supporting its motion to dismiss for lack of personal
jurisdiction. But, as Barone illustrates, the absence of this kind of direct marketing
presence does not necessarily mean that Synatel has not purposefully marketed the
M700 in Iowa. The discovery record reflects that, at the urging of Braime, Synatel
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. Synatel
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.

                                            -7-
        When the district court has resolved an issue of personal jurisdiction without a
trial or evidentiary hearing, as in this case, we review de novo whether plaintiffs have
made a prima facie showing of personal jurisdiction, viewing the facts in the light most
favorable to them. See Dakota Indus., Inc. v. Dakota Sportswear, 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 jurisdiction
should have been denied.

      The judgment of the district court in favor of defendant 4B Elevator 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.

                                          -8-