EI du Pont de Nemours and Company v. McCain
| Decision Date | 16 June 1969 |
| Docket Number | No. 26320.,26320. |
| Parties | E. I. du PONT de NEMOURS AND COMPANY, Appellant, v. Bruce McCAIN et al., Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
William L. Kerr, Theodore M. Kerr, Kerr, Fitz-Gerald & Kerr, Midland, Tex., Walter D. Ford, Edward W. Schall, Harry Fairchild, Wilmington, Del., Daniel M. Gribbon, Washington, D. C., for appellant; Covington & Burling, Washington, D. C., of counsel.
Eldon B. Mahon, Walter S. Pope, Jr., Abilene, Tex., for appellees; Willoughby, Pope, Dickenson, Batjer & Glandon, Abilene, Tex., of counsel.
Before GOLDBERG and MORGAN, Circuit Judges, and LIEB, District Judge.
This products liability and negligence action was brought against duPont by persons who were injured and whose home was destroyed when an explosion occurred while Charles McCain was applying a water repellent compound, called "X-33", in the basement of his parents' home. The compound was manufactured by Wilmington Chemical Corporation (WCC). It contained 98% Shell Sol B, a petroleum distillate supplied by Shell Oil Company, and 2% "Tyzor HS", a trade-marked organic titanate supplied by duPont.
Charles McCain bought two cans of X-33 at an auction sale. As he was applying the compound an explosion occurred which resulted in severe injuries to him and, to a lesser extent, his mother. Suit was brought in Federal Court against WCC, Shell and duPont.
Prior to trial, Shell settled with the McCains for $31,000 and received in return a covenant not to sue. DuPont did not attempt to obtain indemnity or contribution from Shell by way of a third party action for any damages which the jury might assess against duPont. WCC filed no answer to the complaint because it was already insolvent and extinct. However, its president and sole stockholder, Joseph Klehman, attended the trial; he testified and was permitted to examine and cross-examine witnesses.
The issue at the trial was solely as to duPont's liability. Following testimony and instructions, twelve specific questions were asked of the jury, all of which were answered favorably for the McCains. A judgment of $99,652.89, being the full amount of damages less the $31,000 Shell settlement, was entered for the McCains. DuPont does not quarrel with the amount of compensatory damages assessed by the jury. It does contest the liability aspect and the trial court's computation in fixing the judgment.
In 1960, Joseph Klehman contacted duPont representatives about manufacturing a water repellent. DuPont proposed that Klehman use its patented repellent, "Tyzor." He was given technical advice by duPont on the proper use of Tyzor. It was suggested to Klehman that the compound should contain 98% solvent. DuPont contacted Shell, which recommended its "Sol B" as a solvent. DuPont conducted tests of the compound with "Sol B" in its labs, but, admittedly, such tests were not directed to factors of safety, flash point, and flammability.
DuPont was aware that the compound as finally formulated would be sold to the general public. It knew that WCC, when organized, would be a "thin corporation." It reserved the right to approve the product label to protect its trade-mark. Its policy was to permit the use of its name on labels so as to promote sales of the product. Yet it acknowledges that it made no effort to determine whether the warnings on the label were adequate. DuPont also approved advertising material which contained the statement that the product was produced "in strict accordance with duPont's exacting quality control standards."
There exists a controversy as to the degree of prominence which the word "duPont" enjoyed on the label of the X-33 can. It is clear, however, that the word duPont is easily observed by the casual viewer. The label contained the statement, "Formulated From DuPont Tyzor® Organic Titanate." Standing boldly in large black letters against a clear yellow background at the center of the container is the word "DU PONT". That word captures one's eyes initially before further examination is permitted. Above "DU PONT" on the can there is printed "X-33" in print much larger than that of the former. However, it has been cleverly blended into a beige background which has the effect of reducing its attractiveness. At the lowest portion of the can, in letters which are larger than "DU PONT", but smaller than "X-33", are the words "WILMINGTON CHEMICAL CORPORATION." Once again the beige background detracts from the distinct wording. Additionally, the last mentioned phrase is printed so as to almost surround the can. From any angle the observer can see but one of the three words; the word "CHEMICAL" lies directly below the word "DU PONT".
The flash point of duPont's Tyzor is nearly 500 degrees Fahrenheit, which practically speaking means it will not burn. The product X-33 had a flash point of minus 78 degrees Fahrenheit, which is more explosive than gasoline. It is undisputed, and the trial judge so instructed the jury, that the Tyzor was "completely safe." The explosion was not caused by duPont's ingredient in the water repellent compound.
The McCains' recovery was grounded on two theories of liability: negligence and strict liability in tort.
The McCains maintained below that the X-33 label, which was approved by duPont and contained its name, misled and deceived the general public, thereby providing the basis for holding duPont strictly liable. It is argued that duPont lent and permitted WCC to use its name in the manner it did for the sole purpose of selling the product by leading the public to believe that the end product was duPont's. The McCains contend that strict liability should be imposed, under the circumstances, even though duPont manufactured only a harmless part of the end product.
DuPont counters by arguing that Texas law does not apply strict liability to the manufacturer of a "perfectly safe" component part; that such application would require manufacturers to impose unbearable burdens on their customers. In addition, it is insisted that the duPont statement on the label was a truthful statement, which it could not legally have prevented WCC from using, and which therefore cannot form the basis for holding duPont strictly liable. DuPont insists that manufacturers should not be held responsible to consumers who misconstrue the appearance of their names and trademarks on their labels.1
DuPont maintains that it had no responsibility to test WCC's end product or to insure the adequacy of the warnings on the label.
DuPont also objects that the trial court should have ruled as a matter of law that the independent, intervening negligent acts and omissions of WCC and Shell were the proximate cause of Charles McCain's injuries, and thereby insulated duPont from liability. The McCains reply that the question of independent, intervening cause is one for the jury and that it was properly submitted in the District Court's instructions.
DuPont argues that the law of Texas requires that a joint tortfeasor's liability for an injured party's damages should be limited to one-half the amount of the jury award. According to duPont, Shell, which settled before trial, should have been held responsible for one-half the total damages, and judgment should have been entered against duPont for the remainder.
The jury's verdict finding duPont guilty of negligence was grounded on three possible negligent acts or omissions: (1) failure to test the end product; (2) permitting its name to be used on the label without determining the safety of the end product; and (3) permitting its name to be used on the label without determining whether the warning was adequate. DuPont maintains that the law imposes no duty on it to do any of these acts.
Whether the law requires an alleged tortfeasor to do or refrain from doing an act depends on the amalgam of facts of the case. Did the McCains have a legally protected interest, the violation of which would render duPont, the manufacturer of a harmless component part of the finished product liable? The test is foreseeability and its application depends upon all the relevant facts. Palsgraf v. Long Island R. R., 248 N.Y. 339, 162 N.E. 99, 59 A.L.R. 1253 (1928); City of Dallas v. Maxwell, 248 S.W. 667, 27 A.L.R. 927 (Tex.Comm.App.1923).
The jury has determined as a factual matter that that which was on the label was printed so as to lead the consumer public to believe that the product was duPont's.
264 U.S. 368-369, 44 S.Ct. 351.
Following the holding of Prestonettes, the trial court was justified in relying on the jury to decide whether a "casual purchaser" might be deceived into believing that duPont was the manufacturer of the end product. The jury said that he might be so deceived.
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