Toshiba Intern. Corp. v. Henry

• Decision Date: 09 December 2004
• Docket Number: No. 06-04-00002-CV.,06-04-00002-CV.
• Citation: 152 S.W.3d 774
• Parties: TOSHIBA INTERNATIONAL CORPORATION, Appellant, v. Shannon HENRY and Teresa Henry, Appellees.
• Court: Texas Court of Appeals

152 S.W.3d 774

TOSHIBA INTERNATIONAL CORPORATION, Appellant, v. Shannon HENRY and Teresa Henry, Appellees.

No. 06-04-00002-CV.

Court of Appeals of Texas, Texarkana.

Submitted October 27, 2004.

Decided December 9, 2004.

Rehearing Overruled January 19, 2005.

Jeffrey C. Lewis, Atchley, Russell, Waldrop & Hlavinka, LLP, Texarkana, for appellant.

W. David Carter, John R. Mercy, Mercy, Carter, Tidwell, LLP, Texarkana, for appellees.

Before ROSS, CARTER, and CORNELIUS,^* JJ.

OPINION

Opinion by Justice CARTER.

This case has one primary issue: Did the manufacturer of a nondefective component part substantially participate in the integration of that part into a system that was found to be defective.

Shannon Henry sued Toshiba International Corporation on products liability and negligence theories to recover damages for personal injuries sustained on the job at Alcoa, an aluminum industrial facility. Teresa Henry (Teresa), Henry's wife, also sued Toshiba alleging a derivative loss of consortium claim. Toshiba manufactured and sold to Alcoa an inverter or controller that Alcoa integrated into a larger system. The inverter itself functioned as it was designed. The jury found for the Henrys on all liability theories and awarded damages totaling $430,610.00.

Facts

Henry worked for Alcoa, which processes raw aluminum into roll form and then paints it. The process produces scrap aluminum that is recycled onto a "scrap winder." The scrap aluminum is taped onto the scrap winder, which is powered by an electrical system. Alcoa designed and assembled a control panel and wired it to the Toshiba inverter, which regulates the power to the scrap winder. The inverter receives electrical commands from the switches on the control panel, converts the current from alternating to direct current and then back to alternating current at variable frequencies and ultimately delivers the electricity at the proper frequency to the motor of the scrap winder to control the speed at which the winder operates. Although Toshiba manufactured the inverter, it did not design or install the control panel, wiring, or switches attached thereto. Toshiba did not make or send the control panel to Alcoa or produce the switch on the panel.¹ Toshiba did provide a detailed manual for use in the installation of the inverter. Either Alcoa or a contractor actually designed and installed the control panel, switches, and wiring to the inverter. The inverter responded to the signals it received in the way it was designed. The inverter is designed for many different types of applications in industrial settings where regulation of the speed of a moving part is required.

The inverter was designed to allow two speed modes. The "run" mode would allow the motor being controlled to run at the speed set or programmed. It would also run at a slow or "jog" speed. Alcoa's control panel was designed so that both the jog and run speeds were connected to the inverter by the operation of one switch. When the switch on the control panel was closed, the slow speed information was relayed to the inverter, whereas the open switch sent the information to the inverter for a fast speed. The alleged defect in the system was that, as it was configured, when an operator would request a slow speed by engaging the jog button, if a switch on the control panel was not operating properly, the switch would not close or connect and therefore improper information was sent to the inverter that a fast speed was needed. In turn, the inverter delivered the frequency to the motor, which started the motor in a fast speed when the operator was expecting a slow speed. In essence, it is alleged that the external switch gave the inverter the wrong signal.

Toshiba included a detailed manual to accompany the inverter, providing instructions and schematics to system designers and installation personnel. The inverter contained a light-emitting diode (LED) display and an operating panel with user buttons and multifunctional keys for data entry. The LED will display "I-04" or "I-00" to indicate to the operator whether the mode is jog or run, respectively, before pushing the start button.

On multiple occasions (ten to twelve times) before Henry's accident, the scrap winder started at a faster speed when the operator selected the jog speed. There was no predictability or pattern to these malfunctions. The Alcoa electricians could not duplicate the malfunction.

On September 14, 1998, Henry was running the paint line at Alcoa. The paint line was shut down for a paint change. Henry went to the scrap winder to begin the process of recycling the scrap aluminum. He picked up the aluminum and taped it to the scrap winder using nylon tape. The aluminum gauge was heavy; Henry requested David Turney's help. Henry asked Turney to start the winder on the jog mode. Turney saw the switch was on the jog mode; he then waited for Henry's signal and pushed the start button. The winder started spinning at fast speed. Henry was startled and backed away, and his pants were caught in hydraulic lines. He fell on his back and was injured.

Analysis

The four elements for a strict liability action are: (a) the product must be defective; (b) the product must reach the consumer without substantial change from the time it leaves the possession and control of the manufacturer or seller; (c) the defective condition of the product must render the product unreasonably dangerous; and (d) the unreasonably dangerous condition of the product must be the cause of the injury to the user. Restatement (Second) of Torts § 402A (1965); see Houston Lighting & Power Co. v. Reynolds, 765 S.W.2d 784 (Tex.1988); McKisson v. Sales Affiliates, Inc., 416 S.W.2d 787, 788-89 (Tex.1967).

The manufacturer has a duty to prevent a defective product that is unreasonably dangerous from reaching a consumer and causing injury. A product may be defective as a manufacturing defect, design defect, or marketing defect. Caterpillar, Inc. v. Shears, 911 S.W.2d 379, 382 (Tex.1995). Conversely, a manufacturer has no duty to protect a consumer from a nondefective product. In order for a component part manufacturer to be responsible for the integration of its product into a larger system, which is found to be defective, it must have substantially participated in the integration of the component into the final product. Otherwise, the component manufacturer has no duty independent of the completed product assembler to analyze the completed product which incorporates its nondefective component part. See Davis v. Dresser Indus., Inc., 800 S.W.2d 369, 371 (Tex.App. — Eastland 1990, writ denied).

Does the component parts doctrine apply?

1. Design defect

Over twenty years ago, this Court held that a manufacturer of a component part that was not defective itself should not be held strictly liable when the component part is integrated into a product alleged to be defective. If the component part manufacturer does not take part in the design or assembly of the final system or product, it is not liable for defects in the final product if the component part itself is not defective. Bennett v. Span Indus., Inc., 628 S.W.2d 470, 473 (Tex.App. — Texarkana 1981, writ ref'd n.r.e.); see Koonce v. Quaker Safety Prods. & Mfg. Co., 798 F.2d 700, 716 (5th Cir.1986). This rationale is now expressed in the Restatement of Torts, which has recently been cited favorably by the Texas Supreme Court. See Bostrom Seating, Inc. v. Crane Carrier Co., 140 S.W.3d 681 (Tex.2004). The Restatement states:

One engaged in the business of selling or otherwise distributing product components who sells or distributes a component is subject to liability for harm to persons or property caused by a product into which the component is integrated if:

(a) the component is defective in itself, as defined in this Chapter, and the defect causes the harm; or

(b) (1) the seller or distributor of the component substantially participates in the integration of the component into the design of the product; and

(2) the integration of the component causes the product to be defective, as defined by this Chapter; and

(3) the defect in the product causes the harm.

RESTATEMENT (THIRD) OF TORTS § 5 (1998).

In Bostrom, a garbage truck driver sued the truck manufacturer, Crane Carrier, for personal injuries sustained in a rollover accident. Bostrom, 140 S.W.3d at 682. Crane brought a third-party action against Bostrom Seating, the manufacturer of the driver's seat used in the truck. Id.

The court held that it was not proper to extend the doctrine of strict liability to the supplier of a component part used in a product according to the design of the product's manufacturer when the injuries are caused by the design of the product itself, rather than by a defect in the component. Id. Thus, the issue was whether the evidence presented during trial demonstrated that the seat supplied by Bostrom to Crane was itself defective. Id. The Court found that Crane designed the garbage truck and chose which seat it would use. Id. The evidence did not prove that the Bostrom seat, in and of itself, was defective. Id. at 684. "At best, the evidence supports a possible conclusion that using the seat in this specific truck created an allegedly defective restraint system design. Crane was in total control of the design of that system, and Bostrom, playing no part in the design of the truck, cannot be held liable for its possible defectiveness." Id. at 684-85.

Likewise, here it is clear that the inverter Toshiba manufactured and sold to Alcoa did not contain a manufacturing defect. The alleged defect is as a result of the integration of the inverter into the Alcoa scrap winding system. Accordingly, Toshiba can be held liable for a design or marketing defect only if it "substantially participated" in the integration of the inverter into the design of the scrap winder system.

Dr. William Gosney, Jr., appellees' expert, summarized the alleged...