By John W. Scanlan, J.D.
The employee of a baked goods company who was injured while operating a product wrapping machine was granted reconsideration of a federal district court’s prior ruling against her independent failure to warn claim based on the discovery of evidence of an alternative design for the machine that was in the company’s possession that it had not turned over during discovery. The evidence suggested the existence of a "special relationship" between the successor manufacturer and the purchaser that created a duty to warn as well as the breach of that duty (Vicuna v. O.P. Schuman & Sons, Inc., October 31, 2017, Korman, E.).
The worker was employed by a muffin company to operate a Model 60 packing machine manufactured by S.K.S. Equipment Co. under the AmeriPak brand name. The machine had a polycarbonate guard to protect the operator from coming into contact with a heating element while the machine is in automatic mode, but her employer had instructed her to operate the machine in manual mode without the guard so she could prevent the baked goods from being damaged. While doing so, three of her fingers were crushed and burned by the descending heating element, and two of them were amputated.
Model 60 machines were last manufactured in 1999, and the last one was sold in 2004, when O.P. Schuman & Sons entered into an asset purchase agreement with S.K.S. and bought the AmeriPak product line, the blueprints and patents for the machines, and the goodwill, customer lists, and product records for AmeriPak. S.K.S. is now defunct, and effectively exists only on paper.
The worker and her husband brought claims in federal court for strict product liability, failure to warn, breach of express and implied warranties, negligence, and loss of services against Schuman, S.K.S, and AmeriPak. Schuman moved for summary judgment on the issues of successor liability and failure to warn. The district court ruled that Schuman could be liable under the product line exception to the successor theory of liability, but could not be independently held liable on the failure to warn claim because there was no indication of a "special relationship" between Schuman and her employer [see Products Liability Law Daily’s May 18, 2015 analysis].
The worker moved for reconsideration of the court’s independent failure to warn ruling based on the discovery of an alternative design schematic for the Model 60 that provided a workaround that prevented it from being operated in manual model without proper guarding. Schuman had this schematic in its possession as part of an engineering folder on the Model 60, but the court found that the company did not make any particular effort to locate it in discovery and would not have provided it without the worker’s investigatory work and follow-up efforts. Schuman moved to preclude testimony by the worker’s engineering expert and for summary judgment on almost all remaining claims against it.
Reconsideration. The court granted reconsideration based on the discovery of the engineering folder containing sales records, client contact information, and other information related to the Model 60, including the alternative design schematic. The worker had shown diligence and prudence in pursuing her motion for reconsideration and brought her motion within a reasonable length of time given the need to consult with an expert. Schuman argued that the folder and the schematic were "not Schuman documents," but they were under Schuman’s sole possession and control during all relevant times, and the record indicated that Schuman apparently failed to conduct an adequate search for responsive documents during discovery and did not subsequently correct that failure when it should have realized that responsive documents existed.
Independent failure to warn claim. The court declined Schuman’s motion for summary judgment on the worker’s claim that the failure to warn claim existed independently of the company’s status as the successor to S.K.S. First, the court found that the issue of whether Schuman had an independent duty to warn was a decision for the trier of fact because there was evidence suggesting the existence of a "special relationship" between Schuman and the worker’s employer. A successor corporation has an independent duty to warn purchasers of a product manufactured by the predecessor company if there is a special relationship between the successor and the buyer of the product. The court found that Schuman was "eager" to present itself as an expert in the Model 60 and that it could be relied on for the employer’s needs. Schuman provided the worker’s employer with an operator’s manual and spare parts for the machine. While by itself this would not be enough, the court stated that Schuman had actual or constructive knowledge of the alternative design for the machine and of the owner in question, and also was aware of the defect and had made changes to correct the defect.
A jury also could reasonably find that Schuman had breached a duty to warn. The worker alleged that Schuman easily could have added a one-page alternative design schematic to the manual that would have warned the worker’s employer about the danger of operating the machine in manual mode and provided an easy way to work around the defect; this would not have burdened Schuman given that Schuman already was customizing the original manual. In addition, Schuman also could have equipped the machine with properly located warning decals, the court said, observing that the decal that actually was present was unclear and was positioned where it could not be seen while the interlocking guard was unsecured.
Based on the record, a reasonable jury also could find proximate cause, given that the worker testified that she would not have operated the machine as she did if she had been properly warned. Her employer had ordered and received an operator’s manual from Schuman prior to the accident, and had Schuman provided the alternative schematic in this manual, the accident might have been prevented.
Expert testimony. The court refused to exclude the testimony of the worker’s engineering expert because he was qualified and his proffered testimony was reliable. The expert’s background was both "expressive" and "germane," the court determined, noting that he had over 30 years of work experience and had worked directly with numerous machines relevant to the events underlying the litigation and had been trained specifically on machine guarding. Although he had not previously worked with a Machine 60, the court noted that this model had been out of production for nearly 15 years and an expert who had worked directly on it would be difficult to locate. He had been retained in 36 separate projects involving interlocking guards similar to the guard at issue.
The engineer’s report was based on his examination of the Model 60 in question, photographs of the machine, his study of the operator’s manual and the manuals for subsequent machines in the AmeriPak line, his review of depositions taken in the case, and his study of the alternative schematic. He also consulted numerous safety regulations and protocols. Schuman’s assertion that the engineer had not considered alternative designs was untrue; the court believed that the company had not read his report in its entirety. His proposed alternative design—which the court found would have prevented the injuries in this case—would shut down electricity to the conveyor mechanism when the machine was in manual mode, was similar to the alternative schematic created by S.K.S., and also was similar or identical to that used in AmeriPak models manufactured by Schuman after the Model 60. His proposal to move the start button, which must be continuously depressed in manual mode, to a location where an operator cannot both press the button and reach the pinch point was supported by a feasibility, cost, and utility analysis. His report acknowledged that the worker operated the machine in manual mode without the guard, but found that this use was foreseeable, given that the operator’s manual contemplates the operation of the machine in manual mode without the guard for setup and for "jogging" the machine. Finally, the court disagreed with Schuman’s assertion that the expert was biased into finding in favor of the worker.
Design defect. There was significant evidence in the record indicating that the machine at issue had a design defect that prevented granting summary judgment to Schuman. The worker’s engineering expert stated that the machine could operate in manual mode without the protective guard, and that this design contravened both prudent design and industry standards. His report indicated that the defect could have been remedied inexpensively without changing the machine’s utility, examining two alternative designs in detail. This defect was a substantial factor contributing to the worker’s injuries, and the manual for the machine contemplated the use of the machine in manual mode for setup and jogging purposes.
Other claims. Summary judgment was granted on the manufacturing defect claim because the worker offered no evidence or discussion of the issue. She also offered no evidence or discussion regarding her express warranty claim, although the court declined summary judgment to the company on her implied warranty claim because liability for implied warranty and strict products liability are essentially the same under New York law, and the court had denied summary judgment on the strict liability claim. Similarly, the negligent design claim survived because it was essentially the same as the strict liability claim. Although Schuman argued that the worker’s own negligence contributed to her injury, her actions did not constitute the sole proximate cause of her injuries because she used the machine in a foreseeable manner. The loss of services claim survived because it was derivative of other claims that survived. While Schuman also argued that the worker’s use of the alternative schematic should be excluded as an inadmissible subsequent remedial measure because it was created after the machine was manufactured, it was created before the injury in this case; furthermore, the worker is using the schematic to prove feasibility and for other purposes permissible under the Federal Rules of Evidence. Because Schuman did not move for summary judgment on the worker’s claim for failure to warn as the successor to S.K.S., this claim also will proceed to trial.
The case is No. 13-cv-2834-ERK.
Attorneys: Gregory J. Cannata (Gregory J. Cannata & Associates, LLP) for Federica Vicuna. Lisa M. Fitzgerald (Ropers Majeski Kohn Bentley PC) for O.P. Schuman & Sons, Inc.
Companies: O.P. Schuman & Sons, Inc.
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