Thompson v. Hirano Tecseed Co., Ltd., 05-2813.

• Citation: 456 F.3d 805
• Decision Date: 01 August 2006
• Docket Number: No. 05-2813.,05-2813.
• Parties: Linda THOMPSON and Roy Hedbert, Plaintiffs-Appellants, v. HIRANO TECSEED COMPANY, LTD., Defendant-Appellee, v. Sheldahl, Inc., Third-Party Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

456 F.3d 805

Linda THOMPSON and Roy Hedbert, Plaintiffs-Appellants, v. HIRANO TECSEED COMPANY, LTD., Defendant-Appellee, v. Sheldahl, Inc., Third-Party Defendant-Appellee.

No. 05-2813.

United States Court of Appeals, Eighth Circuit.

Submitted: March 13, 2006.

Filed: August 1, 2006.

John C. Goetz, argued, Minneapolis, MN (Sharon L. Van Dyck, on the brief), for appellant.

Brian N. Johnson, argued, Minneapolis, MN (Sheila T. Kerwin, Amanda Cialkowski, Keith J. Kerfield and Kafi C. Linville, on the brief), for appellee.

Before MURPHY, BOWMAN, and BENTON, Circuit Judges.

BENTON, Circuit Judge.

Linda Thompson's arm was crushed as she cleaned an industrial laminator that Hirano Tecseed Company, Ltd. ("Hirano") manufactured for her employer, Sheldahl, Inc. Thompson and her spouse, Roy Hedbert, sued Hirano in Minnesota state court, alleging design-defect and failure-to-warn claims. Invoking diversity jurisdiction, Hirano removed the case to federal court, brought a third-party claim against Sheldahl, and moved for summary judgment. The district court granted summary judgment, holding that Hirano did not design the laminator and had no duty to warn of its open and obvious dangers. Thompson appeals the dismissal of her design-defect claim. Having jurisdiction under 28 U.S.C. § 1291, this court reverses and remands.

I.

Sheldahl manufactures flexible electronic circuit boards, built from laminates. To make them, Sheldahl uses industrial laminating machines to adhere printed circuit boards to flexible substrates. In 1992, it decided to purchase a new laminator to increase production and advance technology. Sheldahl engineers created a general statement of work and submitted the project for bids. After reviewing the capabilities of numerous manufacturers, Sheldahl chose Hirano to manufacture the new laminator.

For two years, Sheldahl engineers developed comprehensive design specifications for the laminator, addressing adhesive requirements, tensions, speeds, temperatures, controls, and safety. The design plans specified the coating system, and directed Hirano to outfit the laminator with comma-coating.¹ Sheldahl specified the gap accuracy, materials, pump speed, tension, and side dams² for the comma coater. Sheldahl instructed Hirano to build manually-adjustable, partially-retractable side dams so that operators could easily adjust the coating controls when starting a new job. To meet health and safety regulations, Sheldahl also requested a coating-enclosure room to capture solvent vapors and control the cleanliness of the coating heads.

As required by the manufacturing contract, Hirano created design drawings of the proposed laminator from Sheldahl's specifications, which Sheldahl had to accept or reject before manufacturing began. In the drawings, Hirano suggested that Sheldahl include interlocking doors on the coating-enclosure room, which would initiate an emergency stop and sound an alarm if an employee entered the room while the machine was operating. Hirano also recommended an emergency stop inside the coating-enclosure room to immediately shut down the machine if a problem arose during start-up or maintenance. Sheldahl rejected these features, because it wanted employees to enter the coating-enclosure room to control and adjust the laminator. Sheldahl hired a different company to design and manufacture the coating-enclosure room, without the recommended interlocks and emergency stops. That company also built an internal enclosure, complete with sliding doors and a stairway for access to the coating rollers. While Hirano played no part in fabricating these components, it did observe their installation and placement on the laminator.

Sheldahl approved Hirano's manufacture of the rest of the laminator, including the coating system. Hirano engineers then built the machine in Japan, shipped it, and assisted Sheldahl for three months with installation and training. Hirano engineers aligned the components of the machine, tested the computers, and made electrical and mechanical adjustments as it was installed. Hirano also assisted Sheldahl in running wet and dry trials to ensure that the machine met Sheldahl's needs.

During the wet trials, adhesive leaked from the side dams of the comma coater, dripping onto the laminate and rollers as the product traveled through the coating system. The lead Hirano engineer testified that the side dams leaked because they were not properly adjusted at the time. He showed Sheldahl employees how to manually adjust the adhesive levels on the side dams, and testified that the problem was fully corrected before Sheldahl finally approved the laminator. Despite Sheldahl's approval, numerous employees stated that the side dams have leaked since the laminator was installed.

Because the side dams leak, Sheldahl operators must watch the laminate as it passes through the comma coater to ensure that the adhesive does not drip and smear the final product. If the adhesive leaks, operators enter the coating-enclosure room to clean the rollers via the stairway and retractable doors on the side of the room. Sheldahl instructs operators to wipe excess adhesive from the rollers with a rag or glove to ensure that no scrap product is created. Operators leave the machine running when cleaning the rollers, because the side dams leak most during start-up. While the lead Hirano engineer testified that he warned Sheldahl employees that this practice was dangerous, he admitted that he cleaned the running machine when training the employees how to adjust and operate the comma coater and side dams.

Thompson, an advanced operator and trainer, has operated the laminator since its 1994 installation. On June 11, 2001, she was feeding a copper laminate roll into the comma coater when adhesive leaked from the side dams, dripping onto the laminate. She could not determine where the adhesive dripped to, so she climbed the stairs and opened the doors to the coating-enclosure room to examine the rollers and clean the drip. After inspecting the rollers in the outer enclosure area, she opened the sliding doors to the internal enclosure room and saw the dripped adhesive on a roller underneath the coating assembly. As she reached through the doors to wipe up the drip, her hand caught between the moving roller and the laminate. The roller pulled her into the machine, crushing her hand and lower arm.

Thompson sued Hirano in state court for defective design and failure-to-warn, alleging that Hirano designed the laminator without adequate guards and warnings. Hirano removed the case to federal court, third-partied Sheldahl, and moved for summary judgment. Hirano argued that it did not design the laminator, but merely followed Sheldahl's specifications. Specifically, Hirano asserted that, in the design phase, it recommended the very safety features Thompson describes, but Sheldahl rejected them. Thompson identified two other design defects in her response to the summary judgment motion, citing depositions not previously available: first, that the side dams to the comma coater are defective because they constantly leak adhesive; and second, that Hirano should have included hand guards on the rollers to prevent operators from reaching nip points.

The district court granted summary judgment to Hirano. Applying law from other jurisdictions, the court held that, because Hirano followed Sheldahl's specifications, it was not liable for a design that it did not produce. The court also found that the danger of touching moving rollers was open and obvious, preventing a failure-to-warn claim under Minnesota law. Thompson appeals only the design-defect ruling.

II.

This court reviews the grant of summary judgment de novo, applying the same standards as the district court. See Price v. Xerox Corp., 445 F.3d 1054, 1056 (8th Cir.2006). Summary judgment is affirmed if, viewing the evidence most favorably to the non-moving party, there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is not appropriate if the prima facie case is supported by specific facts sufficient to raise a genuine issue for trial. A.T. Turner v. Gonzales, 421 F.3d 688, 694 (8th Cir.2005), citing Hesse v. Avis Rent A Car Sys., Inc., 394 F.3d 624, 629 (8th Cir.2005). This court accepts as true all facts presented to the district court by the non-moving party, if properly supported by the record. See Beck v. Skon, 253 F.3d 330, 332-33 (8th Cir.2001), quoting Tlamka v. Serrell, 244 F.3d 628, 632 (8th Cir.2001).

Minnesota law governs this diversity action. See Erie R.R. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Mountain Pure, LLC v. Turner Holdings, LLC, 439 F.3d 920, 923 (8th Cir.2006). To establish a design defect, Thompson must present specific facts that (1) the laminator was in a defective condition unreasonably dangerous for its intended use, (2) the defect existed when the laminator left Hirano's control, and (3) the defect proximately caused her injury. Bilotta v. Kelley Co., 346 N.W.2d 616, 623 n. 3 (Minn.1984), citing Lee v. Crookston Coca-Cola Bottling Co., 290 Minn. 321, 188 N.W.2d 426, 432 (Minn. 1971). Minnesota merges negligence and strict liability claims into a single products liability theory, which employs a reasonable-care balancing test to determine whether a product is defective. See Westbrock v. Marshalltown Mfg. Co., 473 N.W.2d 352, 356 (Minn.Ct.App.1991) (court must balance "the likelihood of harm, and the gravity of harm if it happens, against the burden of the precaution which would be effective to avoid the harm"), quoting Bilotta, 346 N.W.2d at 621. See also Young v. Pollock Eng'g Group, Inc., 428 F.3d 786, 788-89 (8th Cir.2005) (applying Minnesota law). Whether a product is defective is generally a question of fact; only where...