DG&G v. FlexSol Packaging Corp. of Pompano Beach

Citations: 576 F.3d 820; 2009 U.S. App. LEXIS 18359; 2009 WL 2487079Docket: 08-3417

Court: Court of Appeals for the Eighth Circuit; August 17, 2009; Federal Appellate Court

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DG&G, Inc. appeals a summary judgment favoring FlexSol Packaging Corp. in a case concerning moisture damage to cotton bales stored in polyethylene (PE) bags manufactured by FlexSol. DG&G contends that the district court incorrectly admitted unsworn exhibits and excluded expert testimony. The court has jurisdiction under 28 U.S.C. § 1291 and affirms the lower court's decision.

In the fall of 2005, DG&G, a cotton gin operator, added moisture to cotton bales prior to baling, using FlexSol’s PE bags, which had National Cotton Council (NCC) approval for cotton storage. Following an inspection in January 2006, significant mold was found on the cotton bales, attributed to uneven moisture application. Although FlexSol's bags had received approval since 1998, they did not disclose that the bags would not allow moisture-restored cotton to breathe adequately.

DG&G utilized FlexSol bags from 2001 to 2005, reporting minimal damage in 2004. However, in September 2005, a representative from Vomax, the supplier of DG&G’s moisture restoration equipment, identified issues with uneven water application. Subsequent lawsuits from cotton marketing associations prompted DG&G to cross-claim against several parties, including FlexSol, for strict liability failure-to-warn, strict liability product defect, negligence, and breach of implied warranties. FlexSol's motion for summary judgment was granted.

DG&G argues this judgment was erroneous, asserting that FlexSol failed to warn users that its PE bags were unsuitable for moisture-restored cotton. Under Missouri law, a strict liability failure-to-warn claim requires the product to be dangerous when sold, inadequate warnings from the seller, and that the user suffered damages directly attributable to the product. The court reviews the summary judgment de novo, confirming that no material facts were in dispute that would preclude such judgment.

A claimant alleging failure to warn must establish two criteria: the product must have caused the user's damages, and the user must prove that a warning would have influenced the behavior of those involved in the incident. If evidence suggests the plaintiff was unaware of the danger, a presumption exists that a warning would have been heeded; however, this presumption is rebuttable. The defendant is not required to warn about dangers that are open and obvious or commonly known. It is insufficient for the defendant to demonstrate that the plaintiff was aware of general dangers; the plaintiff must have known of the specific danger causing the injury.

In the case of DG&G, it claimed ignorance of the permeability issues of polyethylene (PE) bags when used with its moisture restoration system, yet acknowledged that the cotton industry was aware of these shortcomings. DG&G had prior experience with water-damaged cotton bales and had raised concerns about moisture readings in 2005, indicating knowledge of the specific danger of using PE bags for excess moisture. As such, the district court correctly dismissed DG&G's strict liability failure-to-warn claim.

On the issue of defective products, Missouri law requires proof that the product was sold in the course of business, was in a defective and unreasonably dangerous condition, was used in a reasonably anticipated manner, and that the user suffered damages as a direct result. Strict liability does not imply absolute liability, and the claimant must demonstrate the product's use was reasonably anticipated, which includes foreseeable misuse. DG&G contended that it used FlexSol's bags appropriately, referencing industry recommendations regarding moisture content. However, evidence showed that the moisture in DG&G's cotton bales was unevenly distributed and exceeded recommended levels, leading to property damage that rendered the cotton 'not merchantable' when it left the gin. The district court found no genuine issue of material fact regarding the damage occurring due to excess moisture added by DG&G.

Bagging DG&G's excessively water-packed cotton with FlexSol's PE bags does not constitute a reasonably anticipated use. DG&G contends that the bags can equilibrate moisture levels with the atmosphere, but FlexSol's bags were approved by the NCC based on specific attributes such as tensile strength and thickness, not their moisture handling capabilities. The NCC does not mandate drying moisture-restored cotton nor does it consider breathability in its specifications, which focus on protecting cotton bales from contamination. DG&G's assertion that using the bags for moisture transmission was a foreseeable misuse lacks support, especially given the industry’s awareness of PE bags' breathability limitations. Therefore, it is not objectively foreseeable that DG&G would utilize the bags for this purpose.

Consequently, DG&G failed to show a reasonably anticipated use, leading the district court to grant FlexSol's motion for summary judgment on the strict liability defective-product claim. DG&G's negligence and implied warranty claims were also dismissed since negligence requires demonstrating that a product is foreseeably dangerous in its anticipated use, and breach of implied warranty depends on the product's ordinary purpose being aligned with customary uses. 

Additionally, DG&G objected to the district court's consideration of unsworn expert reports from William S. Anthony, arguing that FlexSol introduced unverified documents. Although FlexSol later provided an affidavit to verify these reports, the court found the documents were "cured" for summary judgment purposes. For documents to be considered in summary judgment, they must be authenticated by an affidavit or deposition per Fed. R. Civ. P. 56(e). The district court has broad discretion in supplementing the summary judgment record, reviewed under an abuse-of-discretion standard. While DG&G cites other circuits that disallow unsworn expert reports, those cases do not address the admissibility of documents later authenticated by an affidavit. Thus, the district court retains discretion to accept or reject such materials.

Multiple district courts have allowed affidavits to rectify previously unsworn materials, permitting their consideration in summary judgment motions. Citing cases such as *Cornell Research Found. Inc. v. Hewlett-Packard Co.* and *Maytag Corp. v. Electrolux Home Prods. Inc.*, it is established that an unsworn expert report can be validated through an affidavit or declaration. In the current case, the district court allowed FlexSol to enhance the summary judgment record with Anthony's affidavit, affirming that subsequent verification of an unsworn expert's report enables its inclusion in such motions. DG&G contended that Anthony's report should be disregarded because he was a retained expert for a settling party and was not deposed; however, no authority was cited to bar the use of another party's expert report. The record indicated DG&G had opportunities to depose Anthony when he was identified as both a retained and a non-retained expert.

DG&G also argued against the exclusion of Robert J. Bockserman's expert testimony. The district court's exclusion is reviewed for abuse of discretion under Federal Rule of Evidence 702, which outlines the criteria for expert testimony. Bockserman's methods for testing water vapor transmission rates were flawed; he tested only three specimens instead of the required four, was unaware of how additional tests might influence results, did not use a dummy specimen as mandated, and his report lacked peer review. Consequently, the district court's decision to exclude Bockserman's testimony was upheld. The overall judgment of the district court has been affirmed.