Carter v. Massey-Ferguson, Inc.

Decision Date03 October 1983
Docket NumberMASSEY-FERGUSO,INC,No. 82-2287,82-2287
Citation716 F.2d 344
Parties14 Fed. R. Evid. Serv. 566 James Garland CARTER, Plaintiff-Appellee, v., Defendant-Appellant.
CourtU.S. Court of Appeals — Fifth Circuit

Victor Hlavinka, Texarkana, Tex., Jackson, Walker, Winstead, Cantwell & Miller, Jack Pew, Jr., Dallas, Tex., for defendant-appellant.

Scott Baldwin, Carl Roth, Marshall, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of Texas.

Before WISDOM, TATE and GARWOOD, Circuit Judges.

WISDOM, Circuit Judge:

In this products liability case, controlled under Erie by the law of Texas, Massey-Ferguson, Inc., appeals from a jury verdict awarding damages to James Garland Carter for personal injuries that he sustained when a motorized log-moving device, called a skidder, allegedly backed into him. Massey-Ferguson contends that the trial judge committed a prejudicial error by refusing to admit evidence of the industry custom with regard to installation of a back-up alarm. Massey-Ferguson also contests the competency of the plaintiff's expert witness to give an opinion on causation that is based solely on other testimony presented at trial. Massey-Ferguson contends that without this testimony Carter has not established the requisite causal relationship between his injuries and the alleged defect. See Turner v. General Motors Corp., Tex.1979, 584 S.W.2d 844. We hold that the trial judge's refusal to admit evidence of the industry custom is harmless error. Further, we conclude that the expert's opinion testimony is admissible under the federal rules of evidence. See Fed.R.Evid. 703. Alternatively, excluding the expert testimony, we find that sufficient evidence was presented at trial for the jury to infer that the absence of a back-up alarm on the skidder caused the accident that resulted in Carter's injury. We AFFIRM.

I.

James Garland Carter was a woodcutter. On November 6, 1980, the day of the accident, he was chopping down trees that later were to be picked up and moved to an area where they could be loaded onto a truck and transported to a lumber yard. The logs were moved to the loading point by a large motorized machine called a skidder. The skidder, manufactured by Massey-Ferguson, was not equipped with a back-up alarm. Carter alleged, and the jury found, that the driver of the skidder accidently backed into him while he was working close to the ground. Although he could hear the skidder and knew it was near the area where he was working, he did not realize it was backing up at the time he was hit. The driver's visibility to the rear is restricted when he is driving the skidder in dense underbrush, and he could not see Carter. After the accident, the driver found Carter lying on the ground and went for assistance. As a result of the accident, Carter is a paraplegic.

Carter filed suit against Massey-Ferguson, asking that it be held strictly liable for his injuries because of an alleged design defect in the skidder. 1 The skidder was not equipped with an automatic sound alarm that would warn nearby workers when the skidder reversed. 2 The trial judge granted Carter's preliminary motion to exclude evidence of industry custom because neither the feasibility of the alarm nor its availability on the market at the time of manufacture was at issue. 3 On appeal, Massey-Ferguson contends that evidence of the industry custom that would have shown that no manufacturer equips skidders with back-up alarms is relevant to the issue of design defect.

At trial, the facts were hotly disputed. 4 Massey-Ferguson alleged that Carter was injured when a tree fell on him, and that he was not hit by the skidder as he asserted. After hearing the evidence, the jury concluded that Carter was injured when the skidder backed into him. 5 To reach that conclusion the jury necessarily had to determine that the skidder was defective in that it did not have a back-up alarm and that this defect was the cause of Carter's injuries. On appeal, Massey-Ferguson turns its attention to the elements of strict liability, alleging that industry custom is relevant to a finding of defective design and that causation cannot be established by an expert's opinion testimony if it is based solely on testimony adduced at trial.

II.

To vacate the jury's verdict in this case we must find that evidence of industry custom is relevant in a strict liability case and that the trial judge's decision to exclude it was prejudicial to the defendant. Under federal rules of evidence, all relevant evidence is admissible, unless there are sound reasons to exclude it. Fed.R.Evid. 402. Although this case is based on diversity jurisdiction, federal rules of evidence apply. Hanna v. Plumer, 1965, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8; see also C. Wright, Law of Federal Courts Sec. 93 at 620-27 (4th ed. 1983). Thus, we begin with the premise that this evidence, if relevant, is admissible.

Evidence is relevant if it relates to any fact that is "of consequence" to the action. Fed.R.Evid. 401. To determine relevancy in a diversity case we must look to the underlying state substantive law. The Texas Supreme Court imposes strict liability on manufacturers for injuries caused by design defects. Otis Elevator Co. v. Wood, Tex.1968, 436 S.W.2d 324. The plaintiff in a strict liability case based upon a design defect must show that a defect exists, that the defect makes the product unreasonably dangerous, and that the defect is a producing cause of the injury. Turner v. General Motors Corp., Tex.1979, 584 S.W.2d 844; Kindred v. Con/Chem, Inc., Tex.Civ.App.1982, 644 S.W.2d 828; see Restatement (Second) of Torts Sec. 402A (1965).

A manufacturer is not obligated to design a completely safe product. A product is not "unreasonably dangerous" merely because it could have been designed with greater safety. Simien v. S.S. Kresge Co., 5 Cir.1978, 566 F.2d 551. Two tests have been developed to determine whether a defect is unreasonably dangerous. Under the first test, a product is unreasonably dangerous if it 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". Restatement (Second) of Torts Sec. 402A, comment i (1965). Courts using this test admit evidence of industry custom because it is relevant to an ordinary consumer's expectations. Two Rivers Co. v. Curtiss Breeding Service, 5 Cir.1980, 624 F.2d 1242, 1249. In design defect cases, the Texas Supreme Court has adopted the second test, Dean Page Keeton's formulation of the unreasonably dangerous standard. Turner v. General Motors Corp., Tex.1979, 584 S.W.2d 844; Keeton, Annual Survey of Texas Law--Torts, 34 Sw.L.J. 1, 7-9 (1980); Keeton, Product Liability and the Meaning of Defect, 5 St. Mary's L.J. 30 (1973). Under this formulation, a product is unreasonably dangerous and defective, if the danger-in-fact associated with the use of the product outweighs the utility of the product. Turner v. General Motors Corp., Tex.1979, 584 S.W.2d at 851; see also Note, Turner v. General Motors Corporation: Crashworthiness in Texas, 31 Baylor L.Rev. 375 (1979). Because this case involves an allegation of a design defect, that is, the absence of a back-up alarm, the risk-utility formulation applies.

The issue before this court is whether evidence of an industry custom that skidders are not equipped with back-up alarms is relevant to the determination of either risk or utility. The Texas Supreme Court has not decided this issue. In Boatland of Houston, Inc. v. Bailey, Tex.1980, 609 S.W.2d 743, the supreme court held that "state of the art" evidence is admissible in a strict liability case. This type of evidence, however, is distinguishable from evidence of the industry custom, here at issue. "Custom" refers to the usual practice of the manufacturer, that is, what is done; "state of the art" refers to the technological environment, that is, what can be done. 6 See id. at 748; see also Note, Use of the "State of the Art" Evidence in Strict Liability Claims: The New Texas Standard, 33 Baylor L.Rev. 165 (1981). Because the Texas Supreme Court has not decided the issue raised in this appeal, we must determine what the Texas Supreme Court would hold on the relevancy and admissibility of custom evidence in a design defect case if the issue were before it. Green v. Amerada-Hess Corp., 5 Cir.1980, 612 F.2d 212, 214, cert. denied, 449 U.S. 952, 101 S.Ct. 356, 66 L.Ed.2d 216.

Under Texas jurisprudence, evidence of industry custom is relevant to the proof of negligence by a manufacturer because the reasonableness of the manufacturer's conduct is at issue. Weakley v. Fischbach & Moore, Inc., 5 Cir.1975, 515 F.2d 1260, 1267 (applying Texas law). In a strict liability case, however, the reasonableness of the manufacturer's conduct is not at issue; the manufacturer may be held liable even though he has exercised the utmost care. Restatement (Second) of Torts Sec. 402A, comment a (1965). Thus, the argument is made that industry custom is not relevant in a strict liability case. See, e.g., Bruce v. Martin-Marietta Corp., 10 Cir.1976, 544 F.2d 442, 447 (dictum). But see Wisconsin Electric Power Co. v. Zallea Bros., 7th Cir.1979, 606 F.2d 697, holding that evidence of industry custom is admissible at the discretion of the trial judge. This argument, however, goes too far: evidence need not be dispositive of an issue to be relevant. Fed.R.Evid. 401 advisory committee note. Industry custom is relevant in a strict liability case if it has any bearing on the condition of the product, which is the focus of a strict liability case. Boatland of Houston, Inc. v. Bailey, Tex.1980, 609 S.W.2d 743, 749.

The Texas Supreme Court has rejected the use of specific, enumerated guidelines in the jury instruction on the standard of unreasonable dangerousness. Turner v. General Motors Corp., Tex.1979, 584 S.W.2d 844, 847....

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