Foster v. Day & Zimmermann, Inc., s. 74-1085
| Decision Date | 13 September 1974 |
| Docket Number | 74-1124,Nos. 74-1085,s. 74-1085 |
| Citation | 502 F.2d 867 |
| Parties | Michael T. FOSTER, Appellee, v. DAY & ZIMMERMANN, INC., Appellant, and Mason & Hanger-Silas Mason Co., Inc., Appellant. Michael T. FOSTER, Appellee, v. DAY & ZIMMERMANN, INC., Appellant, and Mason & Hanger-Silas Mason Co., Inc., Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Thomas K. Berg, Minneapolis, Minn., for appellant.
Thomas F. Daley, Jr., Davenport, Iowa, for appellee.
Before LAY, HEANEY and ROSS, Circuit Judges.
On July 25, 1969, the plaintiff, Michael T. Foster, received serious injuries while enrolled in the Army Reserve Officers Training Program at Ft. Benning, Georgia, when a hand grenade exploded in his hand during a training exercise. The grenade had been assembled in Texas by the defendant Day & Zimmermann, Inc. It contained a fuse manufactured by the defendant Mason & Hanger-Silas Mason Co., Inc., at their plant in Burlington, Iowa. The plaintiff filed suit in the United States District Court for the Southern District of Iowa and recovered a jury verdict against both defendants in the sum of $151,800.00. The defendants appeal the district court's denial of a judgment n.o.v. or a new trial.
The defendants charge as error (1) that the district court improperly applied the Iowa law of strict liability; (2) that the plaintiff failed to prove all of the essential elements of strict liability; (3) that the trial court improperly instructed that plaintiff could recover under the doctrine of res ipsa loquitur; and (4) that the defendants were not liable since they were entitled to the defense of governmental immunity.
We affirmed the judgment of the district court.
The district court determined that the state of Iowa, the state where the grenade fuse had been manufactured, had the most significant relationship to the parties and the litigation. It therefore applied the doctrine of strict liability. The defendants urge that Georgia, the state of injury, has the most relevant contact. Georgia does not apply strict liability. 1 See Whitaker v. Harvell-Kilgore Corp., 418 F.2d 1010 (5th Cir. 1969).
The district court was bound in this diversity case to apply the Iowa law of conflict of laws. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). The Supreme Court of Iowa has consistently adhered to the significant relationships concept in conflict of law cases. See Berghammer v. Smith, 185 N.W.2d 226 (Iowa 1971); Fuerste v. Bemis, 156 N.W.2d 831 (Iowa 1968); Flogel v. Flogel, 257 Iowa 547, 133 N.W.2d 907 (1965). In Fabricius v. Horgen, 257 Iowa 268, 132 N.W.2d 410 (1965), the Iowa Supreme Court adopted as controlling the list of relevant contacts set forth in the Restatement:
(2) Important contacts that the forum will consider in determining the state of most significant relationship include:
(c) the domicil, nationality, place of incorporation and place of business of the parties, and
(d) the place where the relationship, if any, between the parties is centered.
(3) In determining the relative importance of the contracts, the forum will consider the issues, the character of the tort, and the relevant purposes of the tort rules of the interested states.
Id. at 414, citing Restatement (Second) Conflict of Laws, Tentative Draft No. 9 379.
The district court noted that five states have arguably relevant contacts with this litigation. The accident and injury occurred on a military reservation in Georgia. The allegedly defective fuse was manufactured in Iowa, the forum state, while the grenade was assembled in Texas. The plaintiff resided in the state of Washington at the time of his injury but lived in Oregon at the time of trial. On the relative strength of these contacts, the district court ruled that Iowa law should be applied since Iowa was the forum state and the fuse had been manufactured there. In discarding the relevancy of the place of injury, the court observed:
Because of the nature of the product and the place of its use, most of the reasons given for applying the lex locidelicti do not apply here. This particular product, used only for army training, poses no danger to the general population of Georgia; the state has no burden of hospitalization or treatment of persons injured by its use; and the users of this product in Georgia will more than likely be residents of other states. Under these particular circumstances Georgia has little interest in the outcome of this litigation.
We agree that under the facts presented, Georgia has little if any contact with or interest in the parties or in the subject matter of this litigation. The fact that Iowa is the forum state, at least under the Restatement rule, is not a factor deemed relevant to the test. We hold that Iowa, as the state of manufacture, has an interest in this litigation which outweighs any entertained by the state of Georgia. 2 We therefore conclude that the law of Iowa was properly applied.
The defendants urge that, even if Iowa law is controlling, it was not proper to apply strict liability under the facts present here. Their argument is based upon their belief that neither the fuse nor the grenade in question were placed in the stream of commerce since they were manufactured exclusively for and on behalf of the United States Government. Thus, they urge, one of the primary justifications for the doctrine of strict liability, that of the public's interest in ensuring that only safe products are placed in the stream of commerce, is absent.
In adopting strict liability in 1970, the Iowa Supreme Court quoted with approval the following passage from Suvada v. White Motor Co., 32 Ill.2d 612, 210 N.E.2d 182 (1965):
It seems obvious that public interest in human life and health, the invitations and solicitations to purchase the product and the justice of imposing the loss on the one creating the risk and reaping the profit are present and as compelling in cases involving motor vehicles and other products, where the defective condition makes them unreasonably dangerous to the user, as they are in food cases.
Hawkeye-Security Ins. Co. v. Ford Motor Co., 174 N.W.2d 672, 684 (Iowa 1970).
In making the grenade and its component parts the defendants knew that it was made for military personnel and that it was to be used by them. We believe the public interest in human life and health requires the protection of the law against the manufacture of defective explosives, whether they are to be used by members of the public at large or members of the public serving in our armed forces. It is true that the defendants here did not solicit the use of their product, yet they most certainly did reap the profits from its production. When these factors are considered together, the defendants' argument is unpersuasive.
The defendants also urge that to be liable under the law of strict liability as contained in 402(a) of the Restatement (Second) of Torts, they must 'sell' their product. Here, they say, they did not purchase the raw materials which went into their products but rather assembled them from materials and according to specifications provided by the government. Thus, it is urged, they did not sell a product but a service. We likewise reject this argument. Section 402(a) of the Restatement (Second) of Torts makes the principles of strict liability applicable to 'any person engaged in the business of selling products for use or consumption.' Restatement (Second) of Torts, 402(a), Comment f. The defendants were paid for each fuse and each grenade produced. They clearly were within the chain of distribution of a product supplied for use and consumption by others. We believe this is all that is required.
In Delaney v. Towmotor Corp., 339 F.2d 4 (2d Cir. 1964), the Second Circuit was presented with a non-sale situation. There, a manufacturer supplied a forklift to another for demonstration purposes. When the plaintiff was injured, the defendant argued against the application of strict liability on the ground that he was a bailor, not a seller. The court said:
We realize that the latest version of the section of the Restatement of Torts Second dealing with a manufacturer's liability, 402A(1) (Tent. Draft No. 10, 1964), speaks of 'one who sells any product in a defective condition * * *.' But we think the Court of Appeals would regard this, as we would, as a description of the situation that has most commonly arisen rather than as a deliberate limitation of the principle to cases where the product has been sold, intentionally excluding instances where a manufacturer has placed a defective article in the stream of commerce by other means. We can see no sensible reason why Delaney's rights against Towmotor should be less extensive on the facts here than if Towmotor had first sold the hilo to its distributor, or than if it had sold the machine to Hogan, for a nominal down payment, subject to return if Hogan was not satisfied after a trial period.
Whether the manufacturer 'sells' his product in the normal sense of that word, leases it, or supplies it for a sole purchaser under contractual arrangements such as those present here, the policy considerations involving the doctrine of strict liability remain the same. 3
The defendants also urge that the trial court erred by instructing the jury that the plaintiff could recover on the alternative theory of res ipsa loquitur. Defendants contend that (1) the plaintiff failed to demonstrate that the defendants had exclusive control of the instrumentality which caused the injury, and (2) the plaintiff failed to discount other probable causes for the accident.
The trial court submitted the following instruction to the jury on the issue of exclusive control:
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