Croskey v. Bmw of North America, Inc.

• Decision Date: 10 July 2008
• Docket Number: No. 06-1386.,06-1386.
• Citation: 532 F.3d 511
• Parties: William CROSKEY, Plaintiff-Appellant, v. BMW OF NORTH AMERICA, INC. and Bayerische Motoren Werk Aktiengesellschaft (BMW AG), Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

532 F.3d 511

William CROSKEY, Plaintiff-Appellant, v. BMW OF NORTH AMERICA, INC. and Bayerische Motoren Werk Aktiengesellschaft (BMW AG), Defendants-Appellees.

No. 06-1386.

United States Court of Appeals, Sixth Circuit.

Argued: January 29, 2008.

Decided and Filed: July 10, 2008.

ARGUED:

Donald M. Fulkerson, Westland, Michigan, for Appellant. Jeffrey T. Gorcyca, Bowman & Brooke, Troy, Michigan, for Appellees.

ON BRIEF:

Donald M. Fulkerson, Westland, Michigan, Marc E. Lipton, Lipton Law Center, Southfield,

Michigan, for Appellant. Jeffrey T. Gorcyca, Thomas P. Branigan, Bowman & Brooke, Troy, Michigan, for Appellees.

Before: MERRITT, DAUGHTREY, and MOORE, Circuit Judges.

OPINION

MERRITT, Circuit Judge.

This is an appeal from a jury verdict in an automotive products liability action in favor of defendants BMW of North America, Inc., a BMW distributor, and Bayerische Motoren Werk Aktiengesellschaft (BMW AG), the manufacturer. Plaintiff was injured when a plastic radiator piece on a 1992 BMW failed, releasing hot radiator fluid. On appeal, plaintiff alleges numerous errors at trial concerning evidentiary rulings and a jury instruction, most of which we reject. But, because the district court erroneously ruled that evidence of similar incidents could not be used by plaintiff to prove negligence in the design of the car by BMW, we reverse the district court and remand for a new trial. A recent Michigan case decided after the district court tried this case indicates that similar-incidents evidence in this case may be admitted to prove design defect.

I. Facts and Procedural History

The facts relevant to this appeal are few and straightforward. Plaintiff William Croskey was severely burned on July 5, 2000, when the plastic "neck" on the radiator of his girlfriend's 1992 BMW failed, spewing scalding radiator fluid on him when he opened the hood to add fluid. The car had a history of overheating and had been serviced by both BMW and non-BMW mechanics for the problem. Croskey brought an action for defective design, negligence and gross negligence in Michigan federal court. Federal jurisdiction is based on diversity and the parties agree that Michigan law controls the substantive law on products liability actions.

Over defendants' objection, the plaintiff was permitted at trial to offer two alternative negligence theories: (1) that defendant BMW AG, the manufacturer, knew, or should have known, at the time of the car's manufacture in 1991 that the plastic used in the radiator neck would fail over time because the plastic degraded after long-term exposure to the hot temperatures in the radiator (traditional "design defect" claim) and (2) that both BMW AG, the manufacturer, and BMW NA, the distributor, became aware at some point after 1991 that the plastic radiator neck might deteriorate and fail, giving rise to a duty to warn the public about such failure. Both parties filed several motions in limine prior to trial that are the subject of this appeal.

The district court issued a written ruling on January 10, 2006, denying defendant's motion in limine to exclude evidence of substantially similar incidents. In the written order, the district court ruled that plaintiff could introduce evidence of similar incidents after the date of the car's manufacture in 1991 to prove his theory based on the failure to warn about a latent defect. The district court, however, failed to put an end date on the use of similar incidents evidence; and the plaintiff referred to several similar incidents that occurred after July 5, 2000, the date of plaintiff's accident. On a motion for reconsideration by defendants, the district court revisited the ruling and agreed with defendants that evidence of similar incidents after the date of plaintiff's accident were improper because they were irrelevant to the notice defendants had before July 5, 2000, concerning any alleged defect in the radiator neck. Relying on Gregory v. Cincinnati, Inc., 450 Mich. 1, 538 N.W.2d 325 (1995), and Ray v. Rheem Textile Sys., Inc., No. 225934, 2002 WL 433157 (Mich.Ct.App. Mar. 19, 2002), the court modified its ruling to allow evidence of similar incidents occurring between 1991, the date of the car's manufacture, and July 5, 2000, the date of plaintiff's accident to prove the failure to warn claim only.

Trial commenced the next day, but the first jury lasted only through opening arguments when a mistrial was granted on defendants' motion. The district court decided that it had erred in its pretrial ruling admitting evidence of similar accidents that happened after the date of plaintiff's accident (July 5, 2000). As the post-accident incidents had been extensively discussed in the plaintiff's opening argument in the first trial, the district court agreed with defendants that admitting the evidence prejudiced defendants and the jury would not be able to overlook the incidents even with a corrective instruction. So, the court granted defendants' request for a mistrial.

After further motions and discussions, the district court ruled that plaintiff could put on evidence of similar incidents only to prove his "failure to warn" negligence theory and could not use such evidence to prove the "design defect" negligence theory. The court also limited the admissible incidents to those occurring before plaintiff's accident in July 2000, those that were "substantially similar" to the incident at issue and only those of which BMW had notice. Plaintiff appealed this ruling on a number of grounds, but primarily he claims that the district court erred in not admitting evidence of similar incidents to prove existence of a "design defect" and limiting the incidents admitted to those occurring before his accident in July 2000.

A new trial commenced the next day and lasted 14 days. The jury found no liability on the part of either defendant. Specifically, it found the manufacturer, BMW AG, not negligent in the design or manufacture of the radiator and not negligent for failing to warn of a defect in the radiator. It also found BMW NA, the seller, not negligent for failing to warn of a defect.

II. Evidence of Similar Incidents

As explained below, the district court should not have limited the admission of the similar incidents evidence solely to prove the failure to warn claim. Under Michigan and federal law, the evidence may also be admitted to prove design defect and negligence. While evidence of substantially similar incidents is always viewed on a case-by-case basis and may be excluded for a number of evidentiary reasons, there is no blanket prohibition under Michigan or federal law against admitting such evidence on plaintiff's claims of design defect and negligence. See C. Wright & K. Graham, Fed. Prac. & Proc. § 5170 (explaining historical reasons for the reluctance to admit evidence of similar incidents, but noting that "The only arguments for excluding evidence of other incidents that retain their cogency today are those involving problems of prejudice and [jury confusion.]").

Underpinning products liability law is the duty of manufacturers to design their products so as to eliminate any unreasonable risk of foreseeable injury. The plaintiff's complaint alleges three causes of action in his complaint: (1) defect in design or manufacture that existed at the time the car left defendants' possession; (2) negligence¹ and (3) gross negligence. Plaintiff claims that the defendants are negligent because they knew that the plastic used on the radiator "neck" could become brittle and break over time (the "defect"), exposing consumers to the possibility of severe burns if the consumer was standing near the car with the hood up when the neck failed and allowed hot liquid to escape from the radiator. Plaintiff also claims that alternative designs were available that could have been used to minimize the type of radiator neck failure that led to plaintiff's injuries. For the purposes of putting on proof, plaintiff's first two causes of action are virtually the same — they are both negligence claims that require plaintiff to prove that defendants negligently designed or manufactured a product and put it into the stream of commerce.

Plaintiff's third negligence theory contends that even if defendants did not know the product was defective when it left defendants' possession, defendants became aware later of the defect and were under a duty to warn consumers. This third theory of negligence arises from plaintiff's allegation that even if the radiator neck was not "defective" when it left defendants' possession due to either a design defect or a manufacturing defect, over time defendants became aware of the problem in older model cars and had a duty to warn customers about the problem in BMWs manufactured with this type of plastic radiator neck.

A negligence cause of action recognizes that manufacturers have a duty to use reasonable care to design and produce a product that is reasonably safe for its intended, anticipated and reasonably foreseeable use. A negligence claim in a products liability action looks to the manufacturer's conduct and not the mere existence of a product's defect to determine whether the manufacturer's conduct was reasonable under the circumstances. The plaintiff must show that the manufacturer failed to manufacture its product so as to eliminate any unreasonable risk of foreseeable injury.

A claim of "negligence" under Michigan products liability law may be established through several different theories. Plaintiff is entitled to plead and try to prove negligence under any of the alternative theories of negligence. The primary issue in this appeal is plaintiff's efforts to prove negligence under a theory of design defect.² To prove a design defect under Michigan law, a plaintiff must show that the product was "not reasonably safe for its foreseeable uses" and that a "risk-utility analysis" favored a safer design. Under this approach, a plaintiff must show...