Caterpillar, Inc. v. Shears

• Citation: 911 S.W.2d 379
• Decision Date: 22 December 1995
• Docket Number: No. 94-1148,94-1148
• Parties: Prod.Liab.Rep. (CCH) P 14,304, 38 Tex. Sup. Ct. J. 979, 39 Tex. Sup. Ct. J. 170 CATERPILLAR, INC. and B.D. Holt Company, Petitioners, v. Cipriano SHEARS et al., Respondents.
• Court: Supreme Court of Texas

Page 379

911 S.W.2d 379

Prod.Liab.Rep. (CCH) P 14,304, 38 Tex. Sup. Ct. J. 979,

39 Tex. Sup. Ct. J. 170

CATERPILLAR, INC. and B.D. Holt Company, Petitioners, v. Cipriano SHEARS et al., Respondents.

No. 94-1148.

Supreme Court of Texas.

Argued March 23, 1995.

Decided June 29, 1995.

Dissenting Opinion by Justice

Spector Dec. 22, 1995.

Rehearing Overruled Dec. 22, 1995.

Roger W. Hughes, Harlingen, James B. Sales, Roger Townsend, Houston, William Powers, Jr., Austin, Gary Norton, Corpus Christi, for petitioners.

Michael T. Gallagher, David W. Holman, Houston, for respondents.

GONZALEZ, Justice, delivered the opinion of the Court, in which PHILLIPS, Chief Justice, HIGHTOWER, HECHT, CORNYN, ENOCH and OWEN, Justices, join.

This is a products liability case. Cipriano Shears, his wife and children sued Caterpillar, Inc. and B.D. Holt Company for personal injuries Shears suffered in a collision of two front-end loaders. The rollover protective structure or "ROPS" for the loader Shears was operating was not installed at the time of the accident. Shears alleged that Caterpillar, the manufacturer of the loader, and B.D. Holt, which sold the loader to Shears' employer, were negligent and strictly liable because the ROPS was designed to be removable, and the defendants did not warn him of the hazards of operating a loader without a ROPS. Based on favorable jury findings, the trial court rendered a judgment for Shears for actual and punitive damages. The court of appeals affirmed the award of actual damages but reversed and rendered a take-nothing judgment as to the punitive damages. 881 S.W.2d 923 (en banc). ¹ For the reasons stated herein, we reverse the judgment of the court of appeals and render judgment that Shears take nothing from Caterpillar and B.D. Holt.

I.

At the time of the accident, Shears was operating a Caterpillar model 920 front-end loader, also called a payloader. It is a four-wheeled, multi-purpose vehicle that is about nineteen feet long and weighs 18,000 pounds. It is used in logging, excavation, construction, mining, material handling, and other industries. The loader has a hydraulic arm in the front which users equip with various devices, typically a bucket for scooping up loose material. Caterpillar manufactured the model 920 with a detachable ROPS as standard equipment. The ROPS on the Caterpillar model 920 is a device with four posts that supports a canopy over and around the driver's seat. Users can remove the ROPS, which weighs 700 pounds, by unbolting twenty-four high-torque bolts and lifting it off with a crane. Removing the ROPS takes twenty or thirty minutes.

In 1979, B.D. Holt, an independent Caterpillar dealer, sold a model 920 front-end loader to Dix Shipping, Inc., which provides stevedore services for the dockyard in Brownsville, Texas. Dix Shipping removed the ROPS in order to use the loaders to unload the cargo of ships with limited clearance between decks. Regulations of the Occupational Safety and Health Administration (OSHA) authorize removing a ROPS for loaders intended for low-clearance use. See 29 C.F.R. § 1918.73(b)(5) (1994). Dix Shipping personnel testified that if the ROPS could not have been otherwise removed, they would have cut it off with a cutting torch.

At the time of the accident, Dix Shipping had hired Shears to move sodium sulphate. Following its transport by railroad to the warehouse, workers unloaded the sulphate onto a conveyer belt, which carried the sulfate into the warehouse and dumped it into a pile. Loader operators moved the sulfate to storage piles in other areas of the warehouse, where it was held until it could be loaded onto ships.

Shears and Jesus Sanchez were using Caterpillar model 920 front-end loaders to move the sulphate from the pile near the conveyer belt to the storage piles. Dix Shipping provided safety personnel to direct Shears' and Sanchez' movements and to keep them in different areas of the warehouse, but blowing sulphate dust limited visibility to a few feet. Shortly before quitting time, Shears stopped his loader to dump a load of sulphate. Sanchez' loader struck Shears' loader from behind, pinning Shears between the seat and the console of the loader and severely injuring him. It is undisputed that if the ROPS that Dix Shipping had removed from Shears' loader had been installed, it would have prevented his injuries.

Shears brought this products liability action against Caterpillar and B.D. Holt, alleging negligence and strict liability. Following trial, the jury found that the defendants failed to warn Shears of the danger of operating a loader without its ROPS: Caterpillar's design of a removable ROPS was unreasonably dangerous; and that both defendants were negligent. Consequently, the jury apportioned causation 0% to Shears, 70% to Caterpillar, and 30% to B.D. Holt. It awarded $5,000,000 in damages to Shears, $650,000 to his wife, and $100,000 to each of his two children. The jury also assessed exemplary damages of $4,095,000 against Caterpillar and $1,755,000 against B.D. Holt for gross negligence. The trial court rendered judgment accordingly. The court of appeals affirmed the judgment on the basis of the defendants' breach of the duty to warn and their negligence, and did not reach the design defect theory of liability. 881 S.W.2d at 935.

We first consider the defendants' duty to warn under the theory of strict liability.

II.

This Court has adopted the theory of strict products liability expressed in section 402A of the Restatement (Second) of Torts. McKisson v. Sales Affiliates, Inc., 416 S.W.2d 787, 788-89 (Tex.1967). The law of products liability does not guarantee that a product will be risk free, since most products have some risk associated with their use. The Restatement imposes liability only for products sold "in a defective condition unreasonably dangerous to the user or consumer." RESTATEMENT (SECOND) OF TORTS § 402A(1) (1965) (emphasis added). A product may be unreasonably dangerous because of a defect in manufacturing, design, or marketing. See Turner v. General Motors Corp., 584 S.W.2d 844, 847 (Tex.1979). A defendant's failure to warn of a product's potential dangers when warnings are required is a type of marketing defect. See Lucas v. Texas Indus., Inc., 696 S.W.2d 372, 377 (Tex.1984). Liability will attach if the lack of adequate warnings or instructions renders an otherwise adequate product unreasonably dangerous. Id.

Caterpillar and B.D. Holt contend that they had no duty to warn Shears about operating the loader without its ROPS because the danger, if any, was obvious and therefore a warning would not have prevented the injury. A number of courts have adopted the position that there is no duty to warn of obvious or commonly-known dangers. See, e.g., Hagans v. Oliver Mach. Co., 576 F.2d 97, 102 & n. 5 (5th Cir.1978) (applying Texas law and holding that the manufacturer had no duty to warn of the danger of removing a safety guard from a table saw); Posey v. Clark Equip. Co., 409 F.2d 560, 563-64 (7th Cir.1969); (holding that as a matter of law a manufacturer had no duty to warn of the danger of operating a forklift without an overhead guard); Davis v. Caterpillar Tractor Co., 719 P.2d 324, 327-28 (Colo.Ct.App.1985) (holding that a product's design is not unreasonably dangerous if its danger is one which anyone would recognize); Stodghill v. Fiat-Allis Constr. Mach., Inc., 163 Ga.App. 811, 295 S.E.2d 183, 185 (1982) (holding that there was no duty to warn of the absence of a protective cage on a bulldozer because it was an obvious risk); Hunt v. Harley-Davidson Motor Co., 147 Ga.App. 44, 248 S.E.2d 15, 16 (1978) (holding that there is no duty to warn of a danger which is obvious or generally known); Winterrowd v. Travelers Indem. Co., 462 So.2d 639, 642 (La.1985) (stating that the duty to warn does not encompass dangers which are obvious to the ordinary user); Bavuso v. Caterpillar Indus., Inc., 408 Mass. 694, 563 N.E.2d 198, 201 (1990) (concluding there was no duty to warn of the dangers of using a forklift without the overhead guard because the hazard was obvious).

Similarly, this Court has recognized that there is no duty to warn when the risks associated with a particular product are matters "within the ordinary knowledge common to the community." Joseph E. Seagram & Sons, Inc. v. McGuire, 814 S.W.2d 385, 388 (Tex.1991) (holding that there is no duty to warn of the dangers of excessive or prolonged use of alcohol since these dangers are already so widely recognized). Seagram's rationale applies with equal force to products with risks that are obvious to anyone who observes the product. In these circumstances, a warning is not required. Thus, the duty to warn is limited in scope, and applies only to hazards of which the consumer is unaware.

A number of courts have observed that a warning that merely states the obvious would accomplish very little and to the contrary may actually be counterproductive. The fact that a risk is readily apparent serves the same function as a warning. See Hagans, 576 F.2d at 102 (after noting the "obvious" dangers of a table saw, stating that "a warning of the dangers involved in using the saw would not have informed [the plaintiff] of anything he did not already know"). Warnings about obvious hazards are not likely to reduce the chances of injury. See Bavuso, 563 N.E.2d at 201. Moreover, consumers are prone to ignore warnings of obvious dangers, thereby diminishing the importance given by users to warnings about non-obvious hazards. See General Motors Corp. v. Saenz, 873 S.W.2d 353, 360-61 (Tex.1993). ² Thus we hold that the law of products liability does not require a manufacturer or distributer to warn of obvious risks.

The court of appeals did not expressly examine if Caterpillar and B.D. Holt had no duty to warn of obvious risks. However, it concluded that it could not substitute its opinion for that of the jury "about whether the dangers of injury...