Fireman's Fund Ins. v. Canon U.S.A., Inc.

• Decision Date: 12 January 2005
• Docket Number: No. 03-3836.,03-3836.
• Citation: 394 F.3d 1054
• Parties: FIREMAN'S FUND INSURANCE COMPANY; Plaintiff, Travelers Indemnity Company of America; Intervenor Below/Appellant, American Economy Insurance Company; American International Recovery; Home Video of Minneapolis, Inc.; Intervenors Below, v. CANON U.S.A., INC., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

394 F.3d 1054

FIREMAN'S FUND INSURANCE COMPANY; Plaintiff Travelers Indemnity Company of America; Intervenor Below/Appellant American Economy Insurance Company; American International Recovery; Home Video of Minneapolis, Inc.; Intervenors Below, v. CANON U.S.A., INC., Appellee.

No. 03-3836.

United States Court of Appeals, Eighth Circuit.

Submitted: October 22, 2004.

Filed: January 12, 2005.

COPYRIGHT MATERIAL OMITTED

Robert W. Cockerham, argued, St. Louis, MO (T. Michael Ward on the brief), for appellant.

Timothy E. Branson, argued, Minneapolis, MN (David Y. Trevor on the brief), for appellees.

Before BYE, LAY, and GRUENDER, Circuit Judges.

GRUENDER, Circuit Judge.

Travelers Indemnity Company of America ("Travelers") appeals the district court's¹ grant of summary judgment to Canon U.S.A., Inc. ("Canon") on Travelers' claims of strict product liability; negligent design, manufacturing and testing; and breach of warranty. For the reasons discussed below, we affirm.

I. BACKGROUND

On October 16, 2000, a fire destroyed Home Video, a video rental store located in a strip mall in St. Paul, Minnesota, and damaged the three other businesses in the strip mall. The mall's owner was insured by Travelers, the sole appellant in this case. The insurers of the three other tenants, as well as Home Video, were also plaintiffs in the suit below.

A Canon model NP 6016 copier was located in the storeroom of Home Video. The copier had been in use for five years. Service records indicated the copier was upgraded in 1998. Home Video employees stated that the copier often jammed on the heavy paper used for making video cassette jackets but had only jammed once on plain paper in five years. The employees could usually clear paper jams themselves but occasionally had to call a service technician. The copier was serviced one week before the fire.

At around 1:15 p.m. on the day of the fire, a Home Video employee set the copier to make about 80 plain paper copies and left the storeroom with the copying in progress. The locked storeroom apparently was undisturbed until about 7:30 p.m., when another employee entered the storeroom to put some papers in the adjoining office. The employee did not see, hear or smell anything unusual. The employee then smoked a cigarette. The employee claims to have left the storeroom and entered a back hallway to smoke, although surveillance cameras show him returning to the front of the store from the direction of the storeroom, not from the back hallway. The employee also left the storeroom door locked.

At approximately 8:00 p.m., the store telephones began ringing nonstop, the computers froze, and the security alarms activated. A customer reported the smell of smoke to Home Video employees, and smoke was spotted in the back of the store. The employees opened the door to the storeroom and witnessed the fire in progress. The employees then evacuated the building. The fire destroyed the store and damaged the other stores in the strip mall.

Several fire investigators examined the scene of the fire. The St. Paul Fire Department concluded that the fire was unintentional and that the copier was the most probable cause of the fire. Three other fire scene investigators, hired separately by Travelers, Home Video and two other tenants' insurers, also identified the copier as the source of the fire. Travelers and the other plaintiffs brought suit against Canon on theories of strict product liability; negligent design, manufacturing and testing; and breach of warranty.

The plaintiff insurance companies hired several fire causation experts to determine how the copier could have caused the fire. The burned copier was subjected to five detailed inspections between early 2001 and September 2002, including visual, x-ray and electron-microscope examinations. Fire causation experts Beth Anderson and Michael Wald each produced reports in October 2002 stating that the copier's internal burn patterns showed that the upper fixing heater assembly caused the fire and that the design of the assembly was defective because it included a thermal fuse safety device that was not properly rated to prevent such a fire.

Canon's expert, Lawrence Sacco, filed an expert report challenging the plaintiffs' theory. In March 2003, Anderson and Wald each filed a rebuttal of Sacco's opinion in which they introduced the copier's composite power supply board as another potential cause of the fire. The plaintiffs sought to re-open discovery in March 2003 in order to obtain more information for their composite power supply board theory, but the district court denied the motion as untimely. That decision was not appealed.

Canon moved for summary judgment on the basis that the expert opinions of Anderson and Wald were inadmissible, leaving the plaintiffs with no evidence of a defect, a necessary element of each of Travelers' claims. The district court granted Canon's motion, concluding that the expert opinions were unreliable and potentially confusing to a jury. The district court further held that, even if the expert opinions were admitted into evidence, the plaintiffs could not demonstrate that the alleged defects caused the fire. Travelers appeals the district court's grant of summary judgment to Canon.

II. DISCUSSION

We review the district court's grant of summary judgment de novo, applying the same standard the district court applied. Anderson v. Raymond Corp., 340 F.3d 520, 524 (8th Cir.2003). We view the evidence in the light most favorable to Travelers, giving it the benefit of all reasonable inferences that may be drawn from the evidence. Id. We review the district court's decision concerning the admission of expert opinions for an abuse of discretion. Id. at 523.

A. Reliability of the Expert Testimony

The opinion of a qualified expert witness is admissible if (1) it is based upon sufficient facts or data, (2) it is the product of reliable principles and methods, and (3) the expert has applied the principles and methods reliably to the facts of the case. Fed.R.Evid. 702. A trial court must be given wide latitude in determining whether an expert's testimony is reliable. See Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999).

Anderson and Wald purportedly followed standards set forth by the National Fire Protection Association in its publication NFPA 921: Guide for Fire and Explosion Investigations (1998). This guide qualifies as a reliable method endorsed by a professional organization. See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 594, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). However, NFPA 921 requires that hypotheses of fire origin must be carefully examined against empirical data obtained from fire scene analysis and appropriate testing. The district court did not abuse its discretion in concluding that Anderson and Wald did not apply this standard reliably to the facts of the case.

Anderson and Wald initially stated, to a reasonable degree of engineering certainty, that the burn patterns inside the copier established the copier's upper fixing heater assembly as the cause of the fire. They attempted to demonstrate that the copier's safety devices were improperly designed to prevent such a fire.

A brief description of the upper fixing heater assembly is necessary. In normal copier operation, the heating element in the upper fixing heater assembly applies heat to affix the copied image to the paper. The copier's heater control circuitry varies the electrical current supplied to the heating element to automatically control the amount of heat generated. The heater control circuitry includes several safety features to prevent overheating, including programmed shutdown limits based on feedback from two temperature sensors and independent hardware shutdown limits based on the two sensors. In addition, if the environmental temperature near the heating element persistently exceeds a safety threshold, a thermal fuse in the circuit opens, cutting off the electrical current to the heating element and stopping any heating. As a final safety measure to prevent overheating, the heating element is designed to self-destruct in the event of rapid heating.

Anderson and Wald each stated that a fire in the upper fixing heater assembly must have started with a malfunction in the heater control circuitry. They concluded that a defective thermal fuse design failed to prevent the fire. This conclusion was based on three experimental tests of an exemplar upper fixing heater assembly in which the heater control circuitry was entirely bypassed, except for the thermal fuse. By carefully applying electrical current directly to the heating element, Anderson was able to produce a thin brown scorch line on a sheet of paper fastened to the heating element before the thermal fuse opened to shut off the current.

We agree with the district court that this experimental testing did not meet the standards of NFPA 921. Anderson and Wald admitted that to actually start a fire without a bypass of the heater control circuitry and its embedded safety features, the heater control circuitry first would have to malfunction. This undescribed malfunction would have to supply an electrical current to the heating element precisely tailored to generate not just scorching, but also an open flame. Furthermore, the temperature rise would have to be fast enough to avoid triggering the thermal fuse yet slow enough to avoid cracking the heating element. See Weisgram v. Marley Co., 169 F.3d 514, 521 (8th Cir.1999) (excluding an expert's opinion that a defective thermostat in a baseboard heater caused a fire because the expert could not adequately demonstrate how a backup high-limit control failed), aff'd, 528 U.S. 440, 120 S.Ct. 1011, 145 L.Ed.2d 958 (2000). Not only did the experimental testing fail to produce an open flame, but the experts were unable to explain the assumed heater control circuitry malfunction in theory or...