F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
December 12, 2006
UNITED STATES CO URT O F APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
103 IN VESTORS I, L.P.,
Plaintiff-Appellant,
v. No. 05-3385
SQ U A RE D CO M PA N Y ,
Defendant-Appellee.
A PPE AL FR OM T HE UNITED STATES DISTRICT COURT
FOR T HE DISTRICT OF KANSAS
(D .C . No. 01-CV-2504-KHV)
Submitted on the briefs: *
David R. Buchanan, Dennis J. Cassidy, Brown & James, P.C., Kansas City,
M issouri, for Plaintiff-Appellant.
Thomas N. Sterchi, James S. Kreamer, Baker, Sterchi, Cowden & Rice, L.L.C.,
Overland Park, Kansas, for Defendant-Appellee.
Before T YM KOV IC H, A ND ER SO N, and BALDOCK , Circuit Judges.
T YM K O VIC H, Circuit Judge.
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
Plaintiff 103 Investors I, L.P. appeals from the district court’s decision
entering judgment in favor of defendant Square D Company on plaintiff’s
products liability claims. Plaintiff argues that the district court: (1) abused its
discretion by granting defendant’s spoliation motion; (2) erred in granting
defendant’s motion for judgment as a matter of law on the failure to warn claim;
(3) abused its discretion by excluding the expert testimony of Carl M artin;
(4) erred by granting summary judgment in favor of defendant on the
manufacturing defect claim; and (5) abused its discretion by sustaining
defendant’s objection to the playing of the videotaped deposition of Ron Rush.
W e have jurisdiction under 28 U.S.C. § 1291 and we affirm.
I. Background
In M arch 2001, a fire caused damage to an office building that plaintiff
owned. Plantiff investigated the fire and ultimately attributed the cause of the
fire to a busway malfunction. A busway is a system of four insulated aluminum
bars in aluminum casing that run from the basement to the top floor and distribute
electricity to the floors. Defendant manufactured the busway and another
company installed it in 1978. Plaintiff brought an action asserting strict liability
and negligence based on manufacturing defects and failure to warn.
Plaintiff advanced alternate theories for recovery. Plaintiff argued that the
presence of contaminants in the busway indicated that there was a manufacturing
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defect. Alternatively, plaintiff argued that if the contaminants had infiltrated the
busway through water intrusion after it left defendant’s control, then defendant
had failed to place a warning label on the product instructing owners to keep the
high-voltage busway free of w ater and other contaminants.
After discovery, defendant filed for summary judgment. The district court
granted the motion based on its rejection of plaintiff’s expert reports as untimely.
Plaintiff appealed and this court reversed the district court’s decision because the
timeliness of plaintiff’s report had been unfairly affected by extensions that had
been granted to defendant without a corresponding extension for plaintiff. See
103 Investors I, L.P. v. Square D Co., 372 F.3d 1213, 1216-17 (10th Cir. 2004).
On remand, defendant again filed a motion for summary judgment and for
exclusion of one of plaintiff’s experts, Carl M artin, under Rule 702 of the Federal
Rules of Evidence and Daubert v. M errell Dow Pharmaceuticals, Inc., 509 U.S.
579 (1993). After the district court held a Daubert hearing, it granted defendant’s
motion to exclude M r. M artin’s testimony and granted defendant’s motion for
summary judgment on the manufacturing defect and negligence claims. The
district court denied defendant’s motion for summary judgment on the failure to
warn claim.
Prior to trial on the failure to warn claim, defendant filed a motion for
sanctions for spoliation of evidence because plaintiff had failed to preserve all but
a small section of the busway. The case proceeded to trial on the sole issue of
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whether the warning label defendant placed on its busways was placed on the
busway in question when it left defendant’s control in 1978. Plaintiff elicited
testimony from Gregory Goens, the building maintenance supervisor, who
testified that he had not seen a warning on the busway. His testimony was
controverted by Ron Rush, defendant’s senior staff engineer, who testified that in
the manufacturing of the busw ays, defendant placed a warning label on specific
components of the busway assembly and on the installation instructions.
At the close of evidence, defendant moved for judgment as a matter of law
on the basis that there was no evidence the busw ay lacked a warning label when it
left defendant’s control. At that point, the district court granted defendant’s
motion for sanctions for spoliation of evidence and struck M r. G oens’ testimony.
The district court then granted the motion for judgment as a matter of law,
concluding that even with M r. Goens’ testimony there remained an absence of
evidence on whether a warning label was missing from the busw ay at the time it
left defendant’s control in 1978. This appeal followed.
II. Discussion
A. Spoliation Sanction
Plaintiff first argues that the district court erred in granting defendant’s
motion for spoliation and striking the testimony of M r. Goens. In the motion,
defendant asserted that plaintiff’s investigators had access to the busway after the
fire and were able to inspect and evaluate it. Then without notice to the
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defendant, plaintiff threw away fifty to sixty feet of the busw ay and saved only
four feet. The portion of the busw ay that was saved was not a piece that would
have contained a warning. Defendant argued that plaintiff had a duty to preserve
the busway and that defendant was prejudiced by plaintiff’s actions because there
was no way for defendant to defend against the claim that the busway lacked a
warning. The district court agreed and struck M r. Goens’ testimony as a sanction
for the spoliation.
Plaintiff asserts that the district court should not have granted defendant’s
motion without a showing that plaintiff was acting in bad faith when it destroyed
the majority of the busway after the fire, relying on Aramburu v. Boeing Co., 112
F.3d 1398 (10th Cir. 1997). In Aramburu, however, we did not reach the question
of w hat kinds of sanctions could be used for spoliation generally. Instead, we
focused solely on the use of an adverse inference jury instruction as a spoliation
sanction. W e noted that “the general rule is that bad faith destruction of a
document relevant to proof of an issue at trial gives rise to an inference that
production of the document would have been unfavorable to the party responsible
for its destruction.” Id. at 1407.
In its ruling on the spoliation motion, the district court cited to Aramburu
as guiding precedent and explained that an adverse-inference jury instruction
would not be appropriate because defendant had not shown that plaintiff acted in
bad faith. To support its decision to impose a different type of spoliation sanction
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without a showing of bad faith, the district court cited to an unpublished decision
from this court, Jordan F. M iller Corp. v. M id-Continent Aircraft Service, Inc.,
No. 97-5089, 1998 W L 68879 (10th Cir. Feb. 20, 1998). In that case, we noted
that “[c]ourts have not generally imposed a similar requirement of bad faith when
considering other sanctions for the spoliation of evidence.” Id. at *4 (citing
Allstate Ins. Co. v. Sunbeam Corp., 53 F.3d 804, 806-07 (7th Cir. 1995); Dillon v.
Nissan M otor Co., 986 F.2d 263, 267-69 (8th Cir. 1993); Unigard Sec. Ins. Co. v.
Lakewood Eng’g & Mfg. Corp., 982 F.2d 363, 368-69 (9th Cir. 1992)). W e then
upheld the dismissal of M r. M iller’s damages claim as a spoliation sanction
without a showing of bad faith on the part of M r. M iller. Id. at *7.
Defendant was not required to show that plaintiff acted in bad faith in
destroying the evidence in order to prevail on its request for spoliation sanctions.
The district court found that plaintiff had a duty to preserve the evidence because
it knew or should have known that litigation was imminent, and defendant was
prejudiced by the destruction of the evidence because there was no substitute for a
direct visual examination of the busway. The district court also imposed the least
severe sanction that would be appropriate to balance out the prejudice to the
defendant. We conclude that the district court did not abuse its discretion in
granting defendant’s motion for sanctions and striking M r. Goens’ testimony.
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B. Judgment as a M atter of Law on the Failure to W arn Claim
Plaintiff next argues that the district court erred when it sustained
defendant’s motion for judgment as a matter of law on the failure to warn claim.
It contends there was sufficient evidence from which a reasonable juror could
have concluded that all the elements of a prima facie case for strict liability were
met. In order to establish a prima facie case for negligence or strict liability in a
Kansas products liability case, plaintiff must produce evidence that shows: “(1)
the injury resulted from a condition of the product; (2) the condition was an
unreasonably dangerous one; and (3) the condition existed at the time it left
defendant’s control.” M esser v. Amway Corp., 210 F. Supp. 2d 1217, 1227 (D .
Kan. 2002) (citing Jenkins v. Amchem Prods. Inc., 886 P.2d 869, 886 (Kan.
1994)). Plaintiff asserted at trial that defendant had failed to include a warning
label on the busway regarding the risks of water infiltration into the busway.
Defendant offered testimony that it did place such a warning label on the busway
when it w as manufactured.
In ruling in favor of the defendant on its motion for judgment as a matter of
law, the district court concluded that there was “a complete absence of proof on
the issue of whether the warnings were missing from the bus duct system at the
time it left the control of the Square D Company.” A plt. App. at 18. The court
noted that it would reach the same conclusion even if the testimony of M r. Goens
was considered by the jury.
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Plaintiff did not own the building when the busw ay was installed and it
failed to elicit testimony from anyone who was present when the busway left the
control of defendant and was installed in the building. Although M r. Goens
testified that he had not seen a warning on the busway, he did not start working at
the building until five years after the busway was installed. M oreover, the fire
did not occur until twenty-three years after the busway was installed, prompting
the district court to observe that “I don’t think that any jury could reasonably
conclude that the bus duct was still in the same condition as it was when it left the
manufacturer’s premises except by engaging in speculation.” Id. at 19.
W e agree. The plaintiff failed to present sufficient evidence on a necessary
element for its prima facie case, that the unreasonably dangerous condition–lack
of a warning label–existed at the time the busway left defendant’s control. The
district court did not err in granting defendant’s motion for judgment as a matter
of law.
C. Excluding Expert Testimony
Plaintiff also asserts that the district court abused its discretion in
excluding the testimony of its expert. It contends that M r. M artin’s reports and
testimony met the Daubert tests for scientific reliability.
To determine w hether an expert opinion is admissible, the district court
performs a two-step analysis. First, the court must determine w hether the expert
is qualified by “knowledge, skill, experience, training, or education” to render an
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opinion. See Fed. R. Evid. 702. Second, if the expert is sufficiently qualified, the
court must determine whether the expert’s opinion is reliable under the principles
set forth in Daubert. In determining whether a particular scientific theory is
reliable, the court may consider several nondispositive factors: (1) whether the
proffered theory can and has been tested; (2) whether the theory has been subject
to peer review; (3) the known or potential rate of error; and (4) the general
acceptance of a methodology in the relevant scientific community. Daubert, 509
U.S. at 593-94.
M r. M artin is a certified fire investigator and performs 150 to 200
cause-and-origin analyses each year. He opined that contaminants in the inner
bus bar caused premature deterioration of the mylar insulation, which resulted in
a short circuit between the bus bars thereby generating heat through the insulation
and causing the fire. M r. M artin concluded that the contaminants must have
originated during the manufacturing process and that this was a manufacturing
defect.
In considering the issue of M r. M artin’s qualifications to render an opinion
on whether the busway contained a manufacturing defect, the district court noted
that it did not question M r. M artin’s general qualifications as a fire investigator.
The district court concluded that M r. M artin was qualified to testify on the origin
of the fire. The court determined, however, that plaintiff had not established that
M r. M artin had any expertise that was relevant to the question of how the
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contaminants got into this particular duct system. In making this determination,
the court noted that M r. M artin had testified that: he is not familiar with the basic
steps of the manufacturing processes specific to busw ays; he is not familiar with
what precautions are taken during the manufacturing process; he does not know
what codes govern the manufacturing process or whether defendant met those
standards; and he did not conduct any research into the manufacturing of
busways. In addition, the court noted that plaintiff had not demonstrated any
generally accepted scientific methodology for addressing the question of how the
contaminants got into the busway or that M r. M artin had followed any such
method.
M r. M artin’s methodology was to conduct one test–the so-called
permeability test. In this test, M r. M artin poured water on top of the mylar
insulation to see whether it permeated the mylar. From this test, M r. M artin
concluded that water could not go through the surface of mylar. The district court
noted, however, that M r. M artin conducted no test to see whether water and other
contaminants could go around the mylar insulation into the busway system. The
court pointed out the undisputed evidence that not all portions of the busway
system w ere insulated with mylar, the mylar insulation was not sealed, and all of
the janitorial closets that abutted the bus duct system revealed evidence of water
stains running from the slop sinks to the busw ay system. Although M r. M artin
admitted during his testimony that there was a possibility “that water could drain
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down inside the bus duct, contact the bus bars, and create a short-circuit which
could ignite a fire,” Aplt. App. at 26, he believed that this was a “far stretch,” id.
at 27.
The district court concluded that M r. M artin could not testify that the
contaminants in the busway resulted from a manufacturing defect, stating:
If science offers a generally accepted methodology for determining
whether the contamination resulted from the manufacturing process,
or whether it resulted from janitorial practices, M artin has not
explained what it is or how he applied it in this case. M artin’s
testing and hypothesis did not account for the admitted fact that
water can enter a bus duct by going around the mylar insulation.
This possibility cannot be summarily eliminated by M artin’s
unexplained opinion that this scenario would be a “far stretch.” On
this record, M artin’s opinion that the contamination cannot be
explained as anything but a manufacturing defect is not shown to be
grounded in expertise or accepted methodology.
Id. at 33. The district court did not abuse its discretion in excluding M r. M artin’s
testimony on this issue.
D. Summary Judgment on the M anufacturing Defect C laim
Plaintiff next asserts that the district court erred in granting defendant’s
motion for summary judgment on the manufacturing defect claim. In making this
argument, however, plaintiff relies primarily on its contention that the district
court abused its discretion by excluding plaintiff’s expert testimony and that the
expert testimony creates a genuine issue of material fact. As discussed above, the
district court properly excluded the testimony of plaintiff’s expert.
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The only other argument that plaintiff advances on this issue is that this
court’s earlier decision in this case indicated that the manufacturing defect claim
should be decided by a jury. Although that decision did reverse the district
court’s earlier grant of summary judgment in favor of defendant, the decision was
based solely on this court’s conclusions that the district court abused its
discretion in rejecting plaintiff’s expert rebuttal report as untimely and in relying
on the exclusion of the rebuttal report to reject plaintiff’s other expert reports,
and that therefore the district court erred in granting summary judgment based on
the exclusion of all of plaintiff’s expert reports. 103 Investors I, L.P., 372 F.3d at
1218. There was no discussion of whether the expert opinions ultimately should
be admissible or w hether the opinions created a genuine issue of material fact.
Id. at 1214-18.
On remand, the district court granted summary judgment on the
manufacturing claim because plaintiff produced no evidence, other than
M r. M artin’s excluded expert testimony, that the busw ay was unreasonably
dangerous when it left defendant’s control. Plaintiff has not shown that the
district court erred in making this determination.
E. The Videotaped Deposition of Ron Rush
Finally, plaintiff contends that the district court abused its discretion by not
letting it play the videotaped deposition of Ron Rush during trial. Plaintiff argues
that it should have been able to use M r. Rush’s deposition for any purpose
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because he was designated as a Rule 30(b)(6) representative. W hile it is true that
M r. Rush had been identified as a Rule 30(b)(6) representative for an earlier
deposition, defendant had not designated him as a Rule 30(b)(6) representative for
the deposition in question. Plaintiff’s counsel admitted as much at trial. See
Aplee. Supp. App., Vol. II at 415-16.
M ore importantly, M r. Rush was testifying in person at trial and plaintiff’s
counsel was able to elicit live testimony from him and to impeach him with the
deposition transcript. There was no prejudice to the plaintiff in not being able to
play the videotaped deposition. The district court did not abuse its discretion in
sustaining defendant’s objection to the playing of the videotaped deposition.
III. Conclusion
The judgment of the district court is AFFIRMED.
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