Smith v. Borg-Warner Corp.

• Decision Date: 22 September 1980
• Docket Number: No. 78-2919,BORG-WARNER,78-2919
• Citation: 626 F.2d 384
• Parties: Donald Lee SMITH and Mary Smith, Plaintiffs, Donald Lee Smith, Plaintiff-Appellant, v.CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 384

626 F.2d 384

Donald Lee SMITH and Mary Smith, Plaintiffs, Donald Lee Smith, Plaintiff-Appellant, v. BORG-WARNER CORPORATION, Defendant-Appellee.

No. 78-2919.

United States Court of Appeals, Fifth Circuit.

Sept. 22, 1980.

Pike Powers, Austin, Tex., Michael L. Baker, Beaumont, Tex., Thomas F. Rugg, Port Arthur, Tex., for plaintiff-appellant.

Mehaffy, Weber, Keith & Gonsoulin, O. J. Weber, Paul J. Holmes, Beaumont, Tex., for defendant-appellee.

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

Before AINSWORTH and GEE, Circuit Judges, and HUNTER ^*, District Judge.

GEE, Circuit Judge:

Appellant Donald Lee Smith worked for A. Schulman, Inc. ("Schulman") at the latter's plant in Orange, Texas. On May 21, 1973, Smith was seriously burned in an accident at his work place, and his resulting injuries form the basis for this lawsuit. Smith was in charge of the equipment used by Schulman to "compound" a thermoplastic raw material known as ABS, which is a versatile plastic used in a variety of items, such as telephones, ice chests, and the like. In particular, Smith was compounding ABS 101, a very common commodity-type product that is used in manufacturing black plastic pipe.

The ABS manufacturing process contains three steps. First, a white powder is created by combining certain chemicals. In the second step, the powder is converted, or "compounded," into small rectangular pellets; also, during this stage additives are mixed with the powder to color it and to enhance one or more of its useful characteristics. The plastic pellets are then sold to companies that reheat the pellets and inject the plastic into appropriate molds, completing the manufacturing process.

Appellee Borg-Warner Corporation ("Borg-Warner") had employed Schulman as an "outside compounder" essentially to complete Borg-Warner's portion of the manufacturing process; this contracting-out situation became necessary because Borg-Warner's compounding capacity had been exceeded by the demand for the pellets. Borg-Warner did not sell the ABS powder produced in the first step to Schulman and indeed, Borg-Warner never sells this powder but prefers instead to sell only the pellets to manufacturing concerns. Therefore, Schulman was being paid by Borg-Warner to take over the second step in the manufacturing process, and title to the powder remained with Borg-Warner. Schulman had been compounding the powder into pellets for Borg-Warner since December 1971 and, by the time of Smith's accident in May 1973, had successfully run 21 million pounds of the material through its plant.

On the date of the accident, Smith was engaged in the compounding operation melting the powder and mixing it with carbon black and other additives and chopping the resulting plastic strip into small rectangular pellets, all done with the aid of certain specialized machinery. At approximately 5:30 p. m. on the date of the accident, a dicing machine did not pull the plastic ribbon from the cooling trough, and the material being compounded began to pile up in the trough as it was leaving the extruder. Smith went to the control board and began turning off switches to shut down the compounding operation. Suddenly an explosion occurred that knocked Smith down and caused the ignition of the ABS. Smith's clothing caught fire, and he sustained serious burns on his body. Smith filed suit against Borg-Warner, but the jury returned a general verdict that found against plaintiff and for defendant. Judgment was entered thereon, and Smith appeals.

Smith advanced several theories of recovery. He claimed that Borg-Warner was strictly liable in tort, alleging that the ABS powder was defectively manufactured; he also asserted a strict liability claim based on defective marketing (i. e., failure to warn of the hazards in the product). In the alternative, Smith claimed that Borg-Warner was negligent, either in its failure to warn him or in its failure adequately to test the product.

Borg-Warner cross appeals, asserting that strict liability is inapplicable on these facts under Texas law and cites us to Armstrong Rubber Co. v. Urquidez, 570 S.W.2d 374 (Tex.1978), and Thate v. Texas & Pacific Railway Co., 595 S.W.2d 591 (Tex.Civ.App. Dallas 1980, no writ). In Thate and Urquidez, the Texas courts state that strict liability arises only when a product has been released into the stream of commerce and in both cases found this element lacking. While we find much merit in Borg-Warner's argument that the ABS at issue had not entered the stream of commerce, we need not reach this question, since we decide today to uphold the jury's verdict in favor of Borg-Warner on other grounds. Thate and Urquidez are not squarely on point and apply only by analogy; we prefer to defer to the Texas courts in this unsettled area.

Many of plaintiff's contentions on appeal attack the court's charge to the jury. In analyzing such complaints as these on appeal, "the test is not whether the charge was faultless in every particular but whether the jury was misled in any way and whether it had understanding of the issues and its duty to determine those issues." Coughlin v. Capital Cement Co., 571 F.2d 290, 300 (5th Cir. 1978); Houston v. Herring, 562 F.2d 347, 348-49 (5th Cir. 1977); Borel v. Fibreboard Paper Products Corp., 493 F.2d 1076, 1100 (5th Cir. 1973). Our jurisprudence mandates that we consider the charge as a whole, viewing it in the light of the allegations of the complaint, the evidence, and the arguments of counsel. See Coughlin, supra, 571 F.2d at 300, and cases collected there. Bearing these principles in mind, we turn now to plaintiff's specific complaints about the charge.

First, plaintiff asserts that the court erred in defining "unreasonably dangerous." It is true that a portion of the charge ¹ could be interpreted by an attorney as applicable if a design defect were at issue, which is not the case here. ² Nevertheless, the portion of the charge quoted in the margin ³ is a tolerably accurate, albeit incomplete, ⁴ statement of the law in a failure-to-warn case. Perhaps the questioned instruction was given at the wrong place in the charge, but it came immediately before the court commenced its particularized charge on failure to warn. Moreover, it covers one sentence only in jury instructions that occupied 45 pages of transcript. We conclude that this sentence, viewed in its worst light, merely gave plaintiff an instruction on an issue for which there was no evidence and cannot fairly be read in context as tending to mislead the jury. The jury was told in other portions of the charge that plaintiff claimed to have been injured by reason of a manufacturing defect (i. e., a flaw in the product). In other words, one of plaintiff's contentions was that Borg-Warner had produced a "bad batch" of ABS powder. The trial court inserted the words "unreasonably dangerous" primarily to guard against the possibility that the jury might find for plaintiff if it merely found the ABS powder to be thermally unstable, since there was overwhelming evidence that, in varying degrees, all such powders are unstable, and since plaintiff had made no contention that all such powders were, per se, unreasonably dangerous.

Plaintiff next complains of that portion of the charge in which the court outlined the elements of a strict liability case based on a flaw in the product. In particular, plaintiff contends that the jury should not have been told that he had to prove the existence of a defect at the time of the injury. Again, while this may have been erroneous, ⁵ we do not believe, in light of Coughlin, supra, and our other cases, that this misstep by the trial court rises to the level of reversible error. Just before the allegedly erroneous instruction, the trial court had told the jury that one engaged in the business of...