LYNCH, Chief Judge.
A jury rejected both the negligence and the breach of the implied warranty of merchantability claims brought by the plaintiffs, Dean Hatch and his wife, after Hatch was severely injured at work and left paralyzed from his chest down. Hatch did not bring this suit against his employer, Advanced Drainage Systems, Inc. ("ADS"); it may be he was restricted to an exclusive workers' compensation remedy. See Mass. Gen. Laws ch. 152, §§ 23-24; Roberts v. Delta Air Lines, Inc., 599 F.3d 73, 77 (1st Cir.2010).
Rather, he brought suit against Trail King Industries, Inc., the company that had built a specialized trailer for Hatch's employer, following the employer's specifications
The district court instructed the jury that a defendant fabricator in the circumstances of this case may have duties under the laws of negligence and implied warranty to injured third parties but that such duties were subject to exceptions, which the court then defined. The jury later asked a question on the implied warranty exception and the court's answer provided an additional gloss. In essence, the court instructed under the Restatement (Second) of Torts § 404 that a defendant who manufactures a product according to the buyer's specifications could not be liable under either a negligence or implied warranty theory unless the design defect was so obvious it would not have been reasonable for the defendant to manufacture according to the design.
On appeal, the plaintiffs argue that these instructions and the answer to the jury's question were in error under Massachusetts law, that the errors infected both the negligence and implied warranty findings by the jury, that the denial of the motion in limine was error, and that they must be given a new trial. Trail King, the fabricator, argues that the instructions were entirely correct, as was the denial of the motion in limine, and that the jury had a number of alternative reasons to reject the plaintiffs' case, so any error is harmless.
We affirm.
Trail King is located in South Dakota. Some sixty to seventy percent of the trailers it sells are custom-made, built largely to the specifications of its customers. While Trail King was responsible for the design of the motor vehicle component of the trailer at issue, ADS was responsible for designing and providing Trail King with the specifications for the gates. ADS is the world's "largest manufacturer of corrugated polyethylene pipe" for drainage systems, with thirty-two North American manufacturing facilities and twenty distribution centers. In the 1980s, the ADS Material Handling Committee put together a design for a "hydraulic trailer" that would handle the heavy weight associated with the unloading of ADS's highly successful N-12 plastic pipe product. ADS determined that "[a]n outside flatbed manufacturer [would] build the N-12 trailers using the Material Handling Committee's trailer design." ADS contacted the two largest manufacturers of flatbed trucks, Dakota and Trail King, and awarded the contract to Trail King through competitive bidding. Trail King manufactured approximately 350 N-12 trailers using the designs provided by ADS. ADS was the exclusive user of these trailers.
The N-12 trailers are forty-eight feet long with two separate twenty-foot long compartments. Each compartment has ten-foot high sides and a hydraulic gate on the passenger side of the trailer. These hydraulic gates are hinged at the bottom of the trailer and held upright by two hydraulic cylinders attached to a gate upright above the hinge. In addition, each of the gate uprights has a hole that aligns with a corresponding hole on the trailer frame, through which a 3/4" diameter pin is inserted and secured with a cotter pin to ensure that the gate stays in the upright position. The locations of the pin and hole were mandated by ADS.
ADS employees load the pipes through the front and rear of the trailer while the side gate remains in an upright position. Once loaded, ADS employees secure the load with tie-down straps for each compartment, with strap ratchets on the driver's side of the trailer. ADS mandates "driver's side strapping" to prevent the driver from releasing the straps on the passenger's side while standing in the pathway of the gate. Under ADS safety procedures for unloading the trailer, drivers remove the pins, release the straps from the driver's side, and then stand aside while operating the gate's hydraulics with a remote electrical switch. As the gate lowers, the pipes roll out.
On February 1, 2007, Hatch was assigned trailer No. 25019 to deliver two loads of pipe (one in each compartment) to a customer in Hyannis, Massachusetts. Hatch was unaware, however, that air had been introduced into the gate's hydraulic system a few days earlier by another driver who had not properly reported the problem. Upon arriving at the customer drop-off location, Hatch removed the pins for both gates, loosened the vertical straps for both gates, and brought both gates to 90 degrees while he waited for the customer to clear a space for unloading. Once the space was cleared, Hatch released each of the two straps on the front load, intending to walk to the back of the trailer and lower the front gate to the ground using the remote hydraulic switch. However, as soon as Hatch released the second strap, the gate fell. Hatch was caught beneath the gate and suffered injuries resulting in paraplegia.
The action was tried to a jury in a one-week trial. There was no objection to the form of the two key questions put to the jury on the verdict form:
The instruction continued: "If you find, on the other hand, that Trail King designed the N-12 trailer, as it was sold in 1994, either on its own or in substantial collaboration with ADS, you must then consider the law that governs a manufacturer's liability for a design defect." This largely tracked an instruction proposed by the defendant, which cited to the Restatement (Second) of Torts § 404. Plaintiffs objected to the "fabrication" instruction.
After explaining the difference between negligence and implied warranty, the court then instructed on a manufacturer's duty "[i]n designing a product," setting forth the factors of gravity of any risk, likelihood of accident, feasibility of safer design, financial cost of feasible alternative design, and any adverse consequences of design change on the usefulness of the product. There was no objection to this portion of the charge.
As to the claim of breach of the implied warranty of merchantability, the court instructed:
There was no objection to that portion of the charge.
Plaintiffs did object to the next portion of the charge, as emphasized below:
Plaintiff's counsel objected to this instruction on the grounds that it violated Mass. Gen. Laws ch. 106, § 2-316A(4) and did not set forth a recognized defense or exception to a manufacturer's duty.
The court then instructed more generally:
There was no objection to this language.
During their deliberations the jury asked the following question on the warranty issue about the sophisticated status of the purchaser:
After consultation with counsel, the court answered the question as follows:
The plaintiffs told the court that they had "no issues" with this answer "other than the ones [they] already [had] on the record, with that whole issue."
We review de novo a claim that a jury instruction "embodied an error of law." United States v. Silva, 554 F.3d 13, 21 (1st Cir.2009). We review for abuse of discretion "whether the instructions adequately explained the law or whether they tended to confuse or mislead the jury on the controlling issues." Id. (quoting United States v. Ranney, 298 F.3d 74, 79 (1st Cir.2002)) (internal quotation marks omitted). We look at the instructions as a whole, not in isolated fragments. See United States v. Griffin, 524 F.3d 71, 76 (1st Cir.2008). We review a denial of a motion in limine for abuse of discretion. JOM, Inc. v. Adell Plastics, Inc., 193 F.3d 47, 50 (1st Cir.1999).
As to substantive law, we start with Massachusetts law principles, particularly the implied warranty of merchantability. See Mass. Gen. Laws ch. 106, § 2-314. In Massachusetts, warranty liability may be premised on defective design. Haglund v. Philip Morris Inc., 446 Mass. 741, 847 N.E.2d 315, 322 (2006). Similarly, a design defect claim may be predicated on a negligence theory. Id. at 322 n. 9. The two theories are not identical. There can be a finding of breach of warranty but not of negligence. Id. A finding of negligence, however, is also a finding of breach of the warranty of merchantability. Id. (citing Colter v. Barber-Greene Co., 403 Mass. 50, 525 N.E.2d 1305, 1313 (1988)). As to warranty, "the relevant inquiry focuses on the product's features, not the seller's conduct." Id. at 322. The court correctly instructed on these points.
Plaintiffs' position is that there is no limitation on the warranty liability of a manufacturer in these circumstances, even if it did not design the goods at issue. Plaintiffs argue this is a case about an improper attempt by Trail King to limit implied warranties. Under Mass. Gen. Laws ch. 106, § 2-316, implied warranties may be excluded or modified under some circumstances, subject to limitations set forth in Mass. Gen. Laws ch. 106, § 2-316A. More particularly, under state law, implied warranties may be excluded or modified by writings.
The plaintiffs argue that this is a case about disclaimer of warranties, and that by operation of § 2-316A(4) this case is excluded from any disclaimer of implied warranties. They say the outcome of the case is governed by Ferragamo v. Massachusetts Bay Transportation Authority, 395 Mass. 581, 481 N.E.2d 477 (1985), particularly by Ferragamo's statement that the general rule is that "[t]he employee of the buyer is not bound by a disclaimer of warranties in the sales contract." Id. at 482 (quoting 3 R.A. Anderson, Uniform Commercial Code § 2-316:56 (3d ed.1983)) (internal quotation marks omitted). We disagree with all three points and explain why, even so, that does not resolve the case.
First, the language of § 2-316 does not apply to this case. Entitled "Limitation on Exclusion or Modification of Warranties," § 2-316A makes § 2-316 inapplicable to the extent provided by § 2-316A. Plaintiff relies on § 2-316A(4), which provides:
That provision is, by its terms, inapplicable here. Trail King has not attempted to exclude or limit implied warranty responsibility by language, either oral or written. We also note that § 2-316A(4) does not purport to govern exclusion of implied warranties that arise by "course of dealing or course of performance or usage of trade," the provision that defendant suggests is in play.
The decision in Ferragamo also does not resolve the issue here. Rather, Ferragamo involved an attempt in a contract of sale to disclaim warranties by writing. This case does not involve such an attempt, nor is that the issue. More than that, Ferragamo is not a design defect
Somewhat more relevant but still not on point are the decisions, cited to us by the parties, in Commonwealth v. Johnson Insulation, 425 Mass. 650, 682 N.E.2d 1323 (1997) and Cumberland Farms, Inc. v. Drehmann Paving & Flooring Co., 25 Mass.App.Ct. 530, 520 N.E.2d 1321 (1988). Johnson did not involve a suit by a third party to a contract but instead involved a suit between two contracting parties. It was a suit between the Commonwealth and its contractor Johnson Insulation for recovery of remediation costs for removal of asbestos. Although the government specified materials that Johnson was to supply and install, the court concluded that "the specifications supplied by the Commonwealth were not so detailed, precise, and complete as to exclude [the implied] warranty [of merchantability]." Johnson, 682 N.E.2d at 1327-28. Moreover, the court explained, "[t]he asbestos-containing products supplied by Johnson were `off-the-shelf,' commercially available goods that were not specially designed or manufactured for the Commonwealth." Id. at 1329.
Johnson is not on point. It was not a design defect case; it was concerned with specifications of materials and not design specifications; the materials specifications left some discretion in the contractor as to choice of materials; the materials were off-the-shelf rather than designed by the Commonwealth; and the theory of liability was a failure to warn theory. None of those things are true here. Moreover, the failure to warn theory (on which Johnson's theory of breach of warranty turned) has been abandoned in this case.
Johnson is, nonetheless, significant. It did not overrule the state appeals court decision in Cumberland Farms, but instead limited its holding. In Cumberland Farms, the defendant had installed a brick floor in a dairy plant according to specifications provided by the plaintiff buyer. During the installation, the defendant recommended modifying the specifications to include expansion joints that might prevent damage to the floor. The buyer rejected that recommendation. Within a few years of the installation, the lack of expansion joints resulted in substantial damage to the floor. Johnson characterized Cumberland Farms as holding that there was no implied warranty of merchantability by the defendant and as between contracting parties where the plaintiff had provided flawed specifications. Johnson explained that "the failure of the floor was caused not by the quality of the materials (i.e., bricks) supplied by the installer, nor by a lack of craftsmanship on its part, but by innate flaws in engineering and design that were wholly attributable to the plaintiff." Johnson, 682 N.E.2d at 1329. Cumberland Farms is somewhat helpful to Trail King.
The lack of a clear answer from state precedent still leaves the question of the nature of the implied warranty under Massachusetts law in these circumstances. More particularly, the question is whether Massachusetts law would recognize an implied warranty of merchantability as to an innocent third party victim under these circumstances, where it was the plaintiff's employer, and not the maker of the gate, which specified the gate design that allegedly caused the injury. The district court's combined jury instructions essentially provided that Massachusetts law
The parties do not cite any Massachusetts case on point on either the negligence theory or the implied warranty theory, and we have found none.
Two Restatement provisions are relevant: § 402A and § 404. Plaintiffs rely on the Restatement (Second) of Torts § 402A,
In our view, the Restatement itself requires that we also consider the Restatement (Second) of Torts § 404. Section 404 is entitled "Negligence in Making, Rebuilding, or Repairing Chattel." In general, the section provides that "an independent contractor [who] negligently makes, rebuilds, or repairs a chattel for another is subject to the same liability as that imposed upon negligent manufacturers of chattels." Restatement (Second) of Torts § 404. However, where a contractor builds to the specifications of another, comment. a provides:
Plaintiff responds that Trail King is not an independent contractor, but a manufacturer. Under the facts of this case, calling Trail King a manufacturer does not make § 404 inapplicable. The real issue is the role of the defendant in building to the specifications of another that part which caused the injury.
For these purposes, even assuming Mass. Gen. Laws ch. 106 is relevant, it does not distinguish manufacturers from independent contractors. The Restatement (Second) of Torts also does not include relevant terms which expressly distinguish manufacturers from independent contractors. In fact, it does not define the term "manufacturer" at all. And while it defines the term "independent contractor" twice, neither instance is especially helpful here.
The cases analyzing the Restatement in this context tend to look to the reality of the situation, not to labels. For example, in Hunt v. Blasius, 74 Ill.2d 203, 23 Ill.Dec. 574, 384 N.E.2d 368 (1978), a highway signpost manufacturer installed a highway exit sign pole for the Illinois state government, using mandated state design and installation specifications. While driving on the highway, the plaintiffs collided with the pole and were seriously injured. Plaintiffs sued the manufacturer for negligence and defective design. Treating the manufacturer as an independent contractor under the terms of § 404, the court held that the manufacturer had "no duty to third persons to judge the plans, specifications, or instructions which [it had] merely contracted to follow ... unless they [were] so obviously dangerous that no competent contractor would follow them." Id., 23 Ill.Dec. 574, 384 N.E.2d at 371.
Similarly, in Littlehale v. E.I. du Pont de Nemours & Co., 268 F.Supp. 791 (S.D.N.Y.1966), aff'd, 380 F.2d 274 (2d Cir. 1967), the defendant manufactured blasting caps for the U.S. government pursuant to the government's specifications. Plaintiffs, employees of the Navy, were injured when the caps detonated prematurely and sued on the theory of failure to warn. The court granted summary judgment to the defendant, stating in an extensive footnote that:
Id. at 802 n. 16.
This principle from Littlehale has been widely applied by other courts. See, e.g., Spangler v. Kranco, Inc., 481 F.2d 373, 375
Of the cases cited by the parties, as well as those we have found involving facts like these and construing § 404, the majority limit the liability for fabricators/manufacturers who build to specification under both implied warranty and negligence theories. Indeed, "a growing majority of courts have [held] that even in strict liability a manufacturer who merely fabricates a product according to the purchaser's design is not responsible, in the absence of an obvious defect, if the design proves bad." 2 Madden & Owen on Prods. Liab. § 19:4 (3d ed.). Accordingly, "the soundness of a contract specifications defense to design defect claims does not depend on the underlying theory of liability." Id.
For example, in Garrison v. Rohm & Haas Co., 492 F.2d 346 (6th Cir.1974), the Sixth Circuit held that no defective design theory could be asserted against a defendant manufacturer who had built to the specifications of the buyer. Id. at 353. An employee was injured by a dolly that had been manufactured by the defendant Orangeville Manufacturing Company according to the exact designs, plans, and specifications prepared and furnished by the employer. Id. at 347. The court concluded that "[t]o hold Orangeville liable for defective design would amount to holding a non-designer liable for design defect. Logic forbids any such result." Id. at 351. The court noted that manufacturers producing goods for the public at large generally have a duty to test the design for safety. Id. at 353. But where a manufacturer builds to specifications, the court reasoned, the manufacturer is not required to test for design safety; "the only thing that such a manufacturer should reasonably be expected to test for is whether the specifications have been complied with." Id. The court reasoned that it is the designing customer who has the basic responsibility for testing. Id.
The Kentucky Supreme Court has also held that § 402A does not apply when the seller manufactures the product in accordance with the specifications of the employer. See McCabe Powers Body Co. v. Sharp, 594 S.W.2d 592, 594 (Ky.1980). In McCabe, the defendant manufactured an aerial boom for the Kentucky Department of Highways in exact accordance with the department's specifications, which required that the bucket on the boom have one open side. The plaintiff, an employee of the department, was injured when he fell out of the bucket's open side. The court declined to apply § 402A, reasoning that the case was "entirely different from the classic products liability case due to the added factor of design according to the buyer's specifications." Id. Even though the dangers of the bucket's open side were "open and obvious," the court concluded that the manufacturer was protected from liability for injuries caused by use of the product because the product was manufactured
Similarly, the Supreme Court of Ohio has rejected a strict liability theory against a company that manufactured tanker cars to the specifications of the buyer. See Queen City Terminals, Inc. v. Gen. Am. Transp. Corp., 73 Ohio St.3d 609, 653 N.E.2d 661, 671-73 (1995). The court found that the rationale for strict liability under Restatement (Second) of Torts § 402A did not apply in such a situation because the manufacturer did not launch its product into the stream of commerce. Queen City Terminals, 653 N.E.2d at 672. Where the product is custom built, the court reasoned, the manufacturer is not in any better position than the consumer to assume the costs of design safety. Indeed, unlike the general products liability case, "the manufacturer has no opportunity to spread the costs throughout its many customers, because no other customers exist." Id.
The 1982 New Jersey case on which plaintiffs rely, and which does not discuss Restatement (Second) of Torts § 404, does not persuade us that Massachusetts would follow its reasoning. See Michalko v. Cooke Color & Chem. Corp., 91 N.J. 386, 451 A.2d 179 (1982). We conclude that the basic concepts
As Judge Posner has pointed out, the issue is one of imposing back-up liability for design defects on persons other than the designer. See Mesman v. Crane Pro Servs., 512 F.3d 352, 358-59 (7th Cir.2008) (citing Restatement (Second) of Torts § 404). There are policy arguments which may be made on both sides of this question, and we appreciate the illumination provided on this point by the briefs, including the amicus brief of the Massachusetts Academy of Trial Attorneys.
The district judge drew the line in his instructions where the Restatement (Second) of Torts § 404 does, and we cannot say that was error. The Massachusetts courts have not adopted plaintiffs' theory of the case, and we, as a federal court, have no warrant to extend state product liability law. See Warren v. United Parcel Serv., Inc., 518 F.3d 93, 100 (1st Cir.2008) ("[A] federal court applying state law must be hesitant to blaze a new (and contrary) trail." (quoting Kassel v. Gannett Co., 875 F.2d 935, 949 (1st Cir.1989))); Andrade v. Jamestown Hous. Auth., 82 F.3d 1179, 1186-87 (1st Cir.1996) ("[A]s a federal court hearing this state law issue ..., we are reluctant to extend [state] law `beyond its well-marked boundaries.'" (quoting Markham v. Fay, 74 F.3d 1347, 1356 (1st
Affirmed. No costs are awarded.