Margaret Sherman v. Winco Fireworks ( 2008 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
________________
Nos. 07-2267/2393
________________
Margaret Sherman; Richard *
Sherman, *
*
Appellants/Cross-Appellees, *
* Appeal from the United States
v. * District Court for the
* District of Nebraska.
Winco Fireworks, Inc.; Winco *
Fireworks International, LLC., * [PUBLISHED]
*
Appellees/Cross-Appellants. *
*
________________
Submitted: March 13, 2008
Filed: July 3, 2008
________________
Before WOLLMAN, HANSEN, and MELLOY, Circuit Judges.
________________
HANSEN, Circuit Judge.
Margaret and Richard Sherman appeal the district court's grant of Winco
Fireworks, Inc.'s motion to amend its answer, which allowed Winco to plead an
affirmative federal-law preemption defense more than seventeen months after the
deadline for amending pleadings. The Shermans also challenge the district court's
exclusion of expert testimony and the district court's failure to give several jury
instructions. On cross-appeal, Winco challenges the district court's attorney's fees
award. We reverse the district court order granting Winco leave to amend and remand
for a new trial on the Shermans' failure-to-warn claim in addition to Mr. Sherman's
pendent consortium claim. We do not reach the district court's exclusion of expert
testimony, and we affirm on the jury-instruction issues. Finally, we reverse, in part,
the district court's attorney's fees award.
I.
On July 3, 2002, the Shermans were watching their grandson Nate Kapustka set
off fireworks in Mrs. Sherman's daughter's back yard. Nate ignited a "Saturn Missile"
that errantly struck and injured Mrs. Sherman's eye. Nate's father, Stanley Kapustka,
had purchased the Saturn Missile from Hale Fireworks, Inc., in Nixa, Missouri, prior
to the accident. Winco is allegedly the fireworks distributor that sold the Saturn
Missile to Hale Fireworks.
On July 2, 2004, the Shermans filed this suit in the District of Nebraska,
asserting nine causes of action against several businesses in the fireworks industry
allegedly responsible for the manufacture, distribution, and/or sale of the Saturn
Missile. The Shermans' nine claims included a Nebraska-law
negligent-failure-to-warn claim, among others. In its initial scheduling order, the
district court directed the parties to file motions to amend their pleadings by May 6,
2005. A later progression order directed the parties to file motions to amend their
pleadings by August 9, 2005. The district court directed the parties to complete
discovery and to file motions for summary judgment by December 15, 2006.
On December 15, 2006, Winco filed a motion for summary judgment and
argued, for the first time, that the Shermans' negligence and warranty claims–counts
two through seven–were label-based claims preempted by the Federal Hazardous
Substances Act (FHSA) and FHSA regulations. See 15 U.S.C. § 1261(p)(1) (defining
"misbranded hazardous substance"); 16 C.F.R. § 1500.14(b)(7)(xiv) (describing the
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label required for "[m]issile-type rockets," pursuant to the Consumer Product Safety
Commission's authority under 15 U.S.C. § 1262(b) to establish label requirements
additional to those mandated by 15 U.S.C. § 1261(p)(1)). On January 22, 2007, more
than seventeen months after the August 9, 2005, deadline for amending pleadings,
Winco filed a motion for leave to file and serve an amended answer formally pleading
this affirmative preemption defense. The district court granted Winco's motion for
leave to amend its answer, noting that allowing the amendment was "somewhat
prejudicial" and that Winco's delay was "unwarranted." (Shermans' Add. at 10.)1 In
an attempt to mitigate the prejudice resulting from the belated amendment, the district
court permitted the Shermans to file a supplementary brief on the preemption issue;
allowed the Shermans to seek leave to conduct additional discovery; permitted the
Shermans to seek relevant time extensions; and invited the Shermans to file a motion
for attorney's fees and costs incurred as a result of the belated amendment. The
district court subsequently awarded the Shermans $32,019.87 in attorney's fees, costs,
and other expenses based on 28 U.S.C. § 1927, which permits the award of fees if an
attorney "multiplies the proceedings in any case unreasonably and vexatiously."
In a February 2007 order, the district court addressed Winco's summary-
judgment motion and considered Winco's affirmative preemption defense, concluding
that only the Shermans' third cause of action for negligent failure to warn was
preempted insofar as the Shermans sought to hold Winco to a higher standard of care
than the standard established by federal law. See Mattis v. Carlon Elec. Prods., 295
F.3d 856, 862 (8th Cir. 2002) (quoting 15 U.S.C. § 1261 note (b)(1)(a) ("[N]o State
. . . may establish or continue in effect a cautionary labeling requirement applicable
to such substance or packaging and designed to protect against the same risk of illness
or injury unless such cautionary labeling requirement is identical to the labeling
requirement under [§ 1261(p) or § 1262(b)]."). Specifically, the district court
1
For ease of reference, in the remainder of this opinion the Shermans'
addendum will be cited as "SA," and Winco's addendum will be cited at "WA."
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concluded that the Saturn Missile's warning label satisfied the requirements of 16
C.F.R. 1500.14(b)(7)(xiv) as a matter of law, but found that genuine issues of material
fact remained with respect to whether the firework's warning label complied with the
requirements of 15 U.S.C. § 1261(p)(1)(E) (requiring hazardous substances to bear
a label including, among other things, "an affirmative statement of the [product's]
principal hazard or hazards"). The district court expressly rejected Winco's contention
that the preemption defense affected the Shermans' remaining claims, but the district
court did dismiss all but four of the nine original causes of action on grounds not
challenged on appeal. The following four causes of action remained for trial: (1)
negligent failure to use reasonable care to see that goods are safe for intended use; (2)
negligent failure to warn (as limited by the district court's preemption ruling); (3)
breach of implied warranty of merchantability; and (4) loss of consortium.
Prior to trial, Winco filed a motion in limine to exclude the testimony of the
Shermans' expert, Dr. Christine Wood. The district court granted Winco's motion,
concluding that Dr. Wood's testimony concerning the development of warning labels
would not assist the jury because, as a result of its preemption ruling, "the warnings
the Product's label was required to include ha[d] already been developed and stated
in the federal regulations." (SA at 18.)
At trial, a jury found for Winco on all four claims, and the district court entered
judgment in favor of Winco. The Shermans filed a renewed motion for judgment as
a matter of law, or in the alternative, a new trial, which the district court denied. This
appeal, and Winco's conditional cross-appeal of the attorney's fees award, followed.
II.
First, we consider the Shermans' argument that the district court erred by
applying the wrong standard in ruling on Winco's motion to amend its answer, which
was filed well after the Rule 16 scheduling deadline for amending the pleadings.
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While we review the district court's decision allowing a party to amend a pleading for
an abuse of discretion, see Popoalii v. Corr. Med. Servs., 512 F.3d 488, 497 (8th Cir.
2008) (standard of review), we review whether the district court applied the correct
legal standard in exercising that discretion de novo, see Ind. Lumbermens Mut. Ins.
Co. v. Timberland Pallet & Lumber Co., 195 F.3d 368, 374 (8th Cir. 1999)
("Interpreting the Federal Rules of Civil Procedure . . . presents a question of law
subject to de novo review." (internal marks omitted)).
Winco's belated motion to amend its answer and plead its affirmative
preemption defense implicated three different federal rules of civil procedure. First,
because preemption is an affirmative defense, see Wuebker v. Wilbur-Ellis Co., 418
F.3d 883, 886 (8th Cir. 2005), Rule 8(c) required Winco to plead the preemption
defense in its answer. "Generally, failure to plead an affirmative defense results in a
waiver of that defense." First Union Nat'l Bank v. Pictet Overseas Trust Corp., 477
F.3d 616, 622 (8th Cir. 2007). However, "when an affirmative defense is raised in the
trial court in a manner that does not result in unfair surprise, technical failure to
comply with Rule 8(c) is not fatal." Id. (internal marks omitted). Here, consistent
with governing caselaw, the district court recognized that Rule 8© is not an absolute
bar to a party's belated attempt to plead an affirmative defense, concluding that Winco
had not waived its affirmative preemption defense in this particular case. Because the
Shermans do not meaningfully contest this discretionary determination,2 we do not
address the district court's Rule 8(c) analysis further.
In addition to Rule 8(c), Winco's motion implicated both Rule 15(a) and Rule
16(b). Rule 15(a) governs the pretrial amendment of pleadings and states that where
2
In their brief, the Shermans argue that the district court erred by concluding
as a matter of law that an affirmative preemption defense can never be waived. But
the district court's order is not so categorical. Rather, the order's plain language
indicates that the district court concluded, in its discretion, that waiver of the
preemption defense was not warranted in this particular case.
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an amendment is not sought "as a matter of course"–as defined by the Rule–"a party
may amend its pleading only with the opposing party's written consent or the court's
leave." Fed. R. Civ. P. 15(a)(2). The Rule provides that "[t]he court should freely
give leave when justice so requires." Id. But parties do not have an absolute right to
amend their pleadings, even under this liberal standard. United States ex rel. Lee v.
Fairview Health Sys., 413 F.3d 748, 749 (8th Cir. 2005). A district court
appropriately denies the movant leave to amend if "there are compelling reasons such
as undue delay, bad faith, or dilatory motive, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the non-moving party, or futility
of the amendment." Moses.com Sec., Inc. v. Comprehensive Software Sys., Inc., 406
F.3d 1052, 1065 (8th Cir. 2005) (internal marks omitted).
Rule 16(b), on the other hand, guides the district court's issuance and
modification of pretrial scheduling orders and provides that "[e]xcept in categories of
actions exempted by local rule, the district judge . . . must issue a scheduling order,"
which "must limit the time to join other parties, amend the pleadings, complete
discovery, and file motions." Fed. R. Civ. P. 16(b)(1), (3)(A). This schedule "may
be modified only for good cause and with the judge's consent." Fed. R. Civ. P.
16(b)(4) (emphasis added). In addition, Rule 16(d) states that a pretrial order
"controls the course of the action unless the court modifies it."
Relying on the plain language of Rule 16, the Shermans argue that the district
court erred by failing to apply Rule 16(b)'s "good cause" standard in ruling on Winco's
motion to amend. But as a threshold matter, Winco contends that the Shermans
waived this argument by failing to raise it before the district court. Winco's position
is unsupported by the record. In the Shermans' brief in opposition to Winco's motion
to amend its answer–albeit in a lengthy footnote–the Shermans directed the district
court to a district court case applying the same approach now advocated by the
Shermans–the primacy of Rule 16(b) over Rule 15(a) in cases in which the deadline
to amend pleadings has past. See Fin. Holding Corp. v. Garnac Grain Co., 127 F.R.D.
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165, 165-66 (W.D. Mo. 1989). We conclude that this footnote raised the issue in the
district court in a way sufficient to avoid waiver on appeal.
The interplay between Rule 15(a) and Rule 16(b) is settled in this circuit. In
Popoalii, we stated that "[i]f a party files for leave to amend outside of the court's
scheduling order, the party must show cause to modify the schedule." 512 F.3d at 497
(citing Rule 16(b) (emphasis added)). Moreover, we said so in the context of a
discussion of the Rule 15 amendment standard, unmistakably concluding that Rule
16(b)'s good-cause standard governs when a party seeks leave to amend a pleading
outside of the time period established by a scheduling order, not the more liberal
standard of Rule 15(a). Id. Because Popoalii filed her motion to amend her complaint
five months after the scheduling deadline for amending pleadings, "[u]nder [Rule]
16(b), Popoalii needed to show cause in order to be given leave to amend." Id.
The approach taken in Popoalii is derived directly from the plain language of
Rule 16(b), which states both that district courts must issue a scheduling order limiting
the time to amend the pleadings, and that a scheduling order "may be modified only
for good cause." When a party seeks to amend a pleading after the scheduling
deadline for doing so, the application of Rule 16(b)'s good-cause standard is not
optional. To permit district courts to consider motions to amend pleadings under Rule
15(a) without regard to Rule 16(b) "would render scheduling orders meaningless and
effectively . . . read Rule 16(b) and its good cause requirement out of the Federal
Rules of Civil Procedure." Sosa v. Airprint Sys., Inc., 133 F.3d 1417, 1419 (11th Cir.
1998)); see also Leary v. Daeschner, 349 F.3d 888, 909 (6th Cir. 2003) ("Once the
scheduling order's deadline passes, a plaintiff first must show good cause under Rule
16(b) for failure earlier to seek leave to amend before a court will consider whether
amendment is proper under Rule 15(a)."); Hawthorne Land Co. v. Occidental Chem.
Corp., 431 F.3d 221, 227 (5th Cir. 2005), cert. denied, 127 S. Ct. 48 (2006) (applying
the same approach); O'Connell v. Hyatt Hotels of P.R., 357 F.3d 152, 154-55 (1st Cir.
2004) (same); Parker v. Columbia Pictures Indus., 204 F.3d 326, 340 (2d Cir. 2000)
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(same); Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992)
(same).
Because Winco's motion to amend was filed more than seventeen months after
the established scheduling deadline for amending pleadings, the district court was
required to apply Rule 16(b)'s good-cause standard in ruling on Winco's motion.
Winco argues that even if the district court was required to apply Rule 16(b), the
district court's analysis was tantamount to a good-cause finding. Were we satisfied
that the substance of the district court's ruling was in fact a good-cause analysis,
giving due consideration to Winco's diligence in attempting to comply with the
scheduling deadline, we would not disapprove of a functional reading of the district
court's order; a formal citation of Rule 16(b)'s "good cause" requirement is not what
counts. But as we explain below, we are not satisfied that the district court effectively
engaged in a good-cause analysis as required by Rule 16(b).
The good-cause inquiry required under Rule 16(b) is more narrow than the
analysis undertaken by the district court. "The primary measure of good cause is the
movant's diligence in attempting to meet the order's requirements." Rahn v. Hawkins,
464 F.3d 813, 822 (8th Cir. 2006); see also Fed. R. Civ. P. 16(b), advisory committee
note (1983 Amendment) ("[T]he court may modify the schedule on a showing of good
cause if it cannot reasonably be met despite the diligence of the party seeking the
extension."). While the prejudice to the nonmovant resulting from modification of the
scheduling order may also be a relevant factor, generally, we will not consider
prejudice if the movant has not been diligent in meeting the scheduling order's
deadlines. See Bradford v. DANA Corp., 249 F.3d 807, 809 (8th Cir. 2001)
(concluding that there was "no need to explore beyond the first criterion, [diligence,]
because the record clearly demonstrate[d] that Bradford made only minimal efforts to
satisfy the [scheduling order's] requirements"). Our cases reviewing Rule 16(b)
rulings focus in the first instance (and usually solely) on the diligence of the party who
sought modification of the order. See, e.g, Rahn, 464 F.3d at 822 (affirming the
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district court's denial of Rahn's request for a modification of the scheduling order
because the record made clear that Rahn did not act diligently to meet the order's
deadlines); Barstad v. Murray County, 420 F.3d 880, 883 (8th Cir. 2005) (affirming
the district court's denial of leave to amend the Barstads' complaint under Rule 16(b)
because the Barstads had eight months to request an amendment of the scheduling
order and "knew of the claims they sought to add when they filed the original
complaint"); Freeman v. Busch, 349 F.3d 582, 589 (8th Cir. 2003) (affirming, under
Rule 16(b), the district court's denial of Freeman's motion to amend her complaint
because she provided no reasons why the amendment could not have been made
earlier or why her motion to amend was filed so late).
The district court's order ruling on Winco's motion to amend cannot be read
consistently with Rule 16(b)'s good-cause standard as this court has interpreted and
applied that standard. The district court characterized Winco's delay in seeking to add
the preemption defense as "unwarranted." (SA at 10.) The district court also found
that Winco "admitt[ed] awareness of the . . . affirmative defense at least as early as
May 16, 2006," (id.), but Winco still waited until January of 2007 to seek leave to
plead the affirmative defense. The district court's order makes clear that in its
analysis, Winco was anything but diligent in complying with the scheduling deadline.
Winco's argument that the district court effectively applied and found good cause for
the modification of the scheduling order is also at odds with the district court's
attorney's fees award. The award of attorney's fees was based on 28 U.S.C. § 1927,
which–in the words of the district court–"provides for . . . attorney's fees against an
attorney who so multiplies the proceedings in any case unreasonably and vexatiously."
(WA at 74.) Thus, the very basis for the district court's fee award was Winco's lack
of diligence in seeking to amend its answer. For these reasons, we conclude that the
district court did not implicitly apply Rule 16(b)'s good cause standard when ruling
on Winco's motion to amend, and erred by failing to do so.
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Moreover, the record provides no support for a finding of good cause here.
Even though preemption is a purely legal defense based on readily available federal
law, Winco waited to seek leave to plead the affirmative defense until two and a half
years after the suit was filed; a month after the close of discovery; a month after it
raised the defense in its summary judgment motion; almost eighteen months after the
deadline for amending pleadings; and eight full months after it was actually aware of
the preemption defense's applicability. Winco's explanation for its "inadvertent failure
to plead pre-emption as an affirmative defense" was that "at the close of discovery and
during research and preparation for [Winco's] summary judgment motion . . . [Winco]
determined the merits of the pre-emption argument." (Appellants' App. at 609.) But
this is effectively a concession that Winco did not explore the applicability of the
preemption defense before the summary judgment stage of the litigation. Had Winco
been diligent, it would have performed this research at the outset of the litigation, and
at least prior to the scheduled deadline for adding affirmative defenses. The very fact
that our court treats preemption as an affirmative defense presupposes that, in a typical
case, a diligent defendant will be able to plead the defense on the basis of the
complaint alone, at the onset of the litigation. Here, no change in the law, no newly
discovered facts, or any other changed circumstance made the preemption defense
more viable after the scheduling deadline for amending pleadings. Given the absence
of good cause, we must conclude that the district court abused its discretion in
allowing Winco to amend its answer so long after the scheduling deadline.
Despite the district court's error, reversal is not mandated unless the error
"affect[s] a substantial right of the objecting party." Crane v. Crest Tankers, Inc., 47
F.3d 292, 296 (8th Cir.1995). Here, the district court's error was not harmless. In its
summary judgment order, the district court concluded that the Shermans' negligent-
failure-to-warn claim was preempted insofar as that claim sought "to impose warning
requirements that [were] different from or in addition to federal standards."
(Appellants' App. 1705.) As a result of the improperly allowed preemption defense,
the Shermans were precluded from demonstrating that under Nebraska law the Saturn
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Missile's "cautionary warning label should have included more than that which is
required by the federal standards." (Id. at 1706.) Consistent with this limitation that
it placed on the Shermans' state-law failure-to-warn claim, and relying on its
preemption discussion, the district court excluded the proffered expert testimony of
Dr. Wood. The district court reasoned that because "Dr. Wood [could not] testify to
a standard of care that requires more than the federal regulations," her "testimony
concerning the development of warning labels [was] irrelevant to this case." (SA at
18.) The exclusion of Dr. Wood's expert testimony followed directly from the district
court's preemption analysis.
At oral argument, Winco suggested that the district court's allowance of the
preemption defense made no real difference in the case, contending that the Shermans'
evidence would have been the same with or without the amendment. Winco asserts
that, in fact, the allowance of the amendment lightened the Shermans' burden of proof
because they were not required to prove the applicable Nebraska standard of care at
trial. We respectfully disagree. Winco's argument assumes that the standard of care
in Nebraska is the same as the standard of care set out in the FHSA. But the standards
are not necessarily the same in all cases. In fact, Winco recognized as much when it
argued for the applicability of the preemption defense for the first time. (Appellants'
App. at 228.) ("To hold that . . . Winco [is] liable for not having provided additional
label language . . . would be contrary to the express purpose of Congress to develop
uniform safety standards." (internal marks omitted)). The FHSA standard of care that
was submitted to the jury required the Saturn Missile's label to conspicuously state:
(A) The name and place of the manufacturer, packer, distributor or seller;
(B) The signal word "WARNING" or "CAUTION" on all other
hazardous substances; (C) An affirmative statement of the principal
hazard(s), such as "Flammable," "Combustible," "Vapor Harmful,"
"Causes Burns," "Absorbed Through Skin," or similar wording
descriptive of the hazard(s); (D) Precautionary measures describing the
action to be followed or avoided; (E) Instruction, when necessary or
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appropriate, for first aid treatment; and (F) Adequate directions for the
protection of children from the hazard(s) . . . .
(SA at 35.) In contrast, had the Shermans been permitted to proceed on the basis of
an unrestricted Nebraska common-law negligent-failure-to-warn claim, they would
have been required to establish the relevant standard of care by proving that Winco
failed "to exercise reasonable care to inform [expected users] of [the Saturn Missile's]
dangerous condition or of the facts which make it likely to be dangerous." Erickson
v. U-Haul Int'l, Inc., 738 N.W.2d 453, 460 (Neb. 2007); see also NJI2d Civ. § 11.11.
Unlike the more concrete FHSA standard of care, the Nebraska common-law standard
does not establish the form in which the warning must be communicated to the user,
and it also does not limit the warning requirement to "principal hazards." Instead,
Nebraska law vests the jury with the task of determining the dangers that require a
warning and the form that the warning must take. Accordingly, the FHSA standard
of care is not necessarily equal to or greater than the standard of care that Nebraska
law imposes upon the distributor of the Saturn Missile that injured Mrs. Sherman.
Theoretically, under Nebraska law, the Shermans could prove that Winco failed to
comply with a standard of care different than the FHSA standard that the jury may
have concluded Winco did not breach. For these reasons, we conclude that as a result
of the district court's error in granting Winco's motion to amend, the Shermans' state-
law failure-to-warn claim was prejudicially limited.
The Shermans contend that this error requires a new trial on all of their claims.
But the record unambiguously indicates that the Winco's affirmative preemption
defense affected only the Shermans' negligent-failure-to-warn claim. The district
court's summary judgment order explicitly rejected Winco's contention that claims
other than the failure-to-warn claim were preempted. Likewise, in its attorney's fees
order, the district court recognized that "ultimately, the [Shermans'] first, second, and
fourth through ninth causes of action were unaffected by [Winco's] untimely filing."
(WA at 75.) There is no indication in the record, and the Shermans make no showing,
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that the legal elements of any claim other than the failure-to-warn claim were affected,
and there is no indication that Dr. Wood's expert testimony was relevant to any claim
other than the failure-to-warn claim, and by extension Mr. Sherman's pendent
consortium claim. Accordingly, the prejudicial effect of the district court's error was
limited to the failure-to-warn claim and the consortium claim. A remand for a new
trial on all of the Shermans' claims is unwarranted.
III.
The Shermans also argue that the district court committed reversible error by
excluding the expert testimony of Dr. Wood. Because we conclude in part II that a
new trial is required on the Shermans' state-law failure-to-warn claim, and because Dr.
Wood's testimony was relevant only to that claim, we do not reach this evidentiary
issue. It is for the district court now to determine, in the first instance, whether Dr.
Wood's expert testimony is properly admissible under the Nebraska common-law
theory under which the case will proceed on remand.
IV.
Next, we consider the Shermans' challenge to the district court's jury
instructions. We review the district court's refusal to submit proffered jury
instructions and its decision to give certain instructions for an abuse of discretion.
The Shaw Group, Inc. v. Marcum, 516 F.3d 1061, 1068 (8th Cir. 2008); Bennett v.
Hidden Valley Golf & Ski, Inc., 318 F.3d 868, 873 (8th Cir. 2003). "A federal district
court presiding over a diversity case is not bound to give the jury instruction requested
by the litigants, nor is the court constrained to follow the language contained in a
state's uniform instructions." Fin. Holding Corp. v. Garnac Grain Co., 965 F.2d 591,
594 (8th Cir. 1992). In conducting our review, "we must determine simply whether
the instructions, taken as a whole and viewed in light of the evidence and applicable
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law, fairly and adequately submitted the issues in the case to the jury." The Shaw
Group, Inc., 516 F.3d at 1068 (internal marks omitted). Reversal is only warranted
if a party's substantial rights are prejudiced by instructional error. Burry v. Eustis
Plumbing & Heating, Inc., 243 F.3d 432, 434 (8th Cir. 2001) ("We will order a new
trial only if the error misled the jury or had a probable effect on its verdict." (internal
marks omitted)).
A. The Effect of the Jury's Allocation of Negligence
First, the Shermans argue that the district court abused its discretion by
declining to give an instruction on the effect of the jury's allocation of negligence
among Winco and nonparties whom Winco argued were responsible for Mrs.
Sherman's injuries.
In Instruction No. 20, the district court instructed the jury that if it found that
Winco proximately caused some of Mrs. Sherman's injury, it was "required to
consider and assign the respective shares of fault, if any, of the Winco Defendants
against the persons or entities with whom the [Shermans] have settled." (SA at 48.)
Consistent with this instruction, section B of the final verdict form directed the jury–if
it reached that section–to assign negligence on a percentage basis. According to the
Shermans, the district court's instructions are deficient because the jury was not
instructed on the effect of its allocation of negligence between Winco and the
nonparties.
The Shermans rely on two Nebraska statutes, the first of which–Neb. Rev. Stat.
§ 25-21,185.09–provides:
Any contributory negligence chargeable to the claimant shall diminish
proportionately the amount awarded as damages for an injury
attributable to the claimant's contributory negligence but shall not bar
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recovery, except that if the contributory negligence of the claimant is
equal to or greater than the total negligence of all persons against whom
recovery is sought, the claimant shall be totally barred from recovery.
The jury shall be instructed on the effects of the allocation of negligence.
The second statute that the Shermans rely on is Neb. Rev. Stat. § 25-21,185.11(2),
which states:
A release, covenant not to sue, or similar agreement entered into by a
claimant and a person liable shall preclude that person from being made
a party or, if an action is pending, shall be a basis for that person's
dismissal, but the person's negligence, if any, shall be considered in
accordance with section 25-21,185.09.
According to the Shermans, Neb. Rev. Stat. § 21-25,185.11(2)'s instruction that a
settling party's negligence "be considered in accordance with section 25-21,185.09"
requires that the district court instruct the jury on the effect of its allocation of
negligence among the defendant and the nonparties, even when contributory
negligence is not at issue.
The Shermans' legal position is inconsistent with our reading of Nebraska law.
Crucially, the Shermans ignore Neb. Rev. Stat. § 25-21,185.07, which restricts the
applicability of the two Nebraska statutes on which they depend: "Sections 25-
21,185.07 to 25-21,185.12 shall apply to all civil actions to which contributory
negligence may be, pursuant to law, a defense . . . ." (Emphasis added.) By expressly
narrowing the application of these statutes to cases in which contributory negligence
is at issue, § 25-21,185.07 impliedly excludes the statutes' application outside of that
context. See Chapin v. Neuhoff Broad.-Grand Island, Inc., 684 N.W.2d 588, 593
(Neb. 2004) (recognizing and applying the expressio unius est exclusio alterius canon
of statutory construction). Consistent with this statute, Nebraska cases construing
§ 25-21,185.07 through § 25-21,185.12 limit these statutes to the contributory-
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negligence context. See, e.g, Tadros v. City of Omaha, 735 N.W.2d 377, 380 (Neb.
2007) ("[F]or cases involving multiple defendants where contributory negligence is
a defense, the Legislature has altered the common law." (citing §§ 25-21,185.07 to 25-
21,185.12)). Although the Nebraska cases that the Shermans rely on have held that
it is prejudicial error for the district court not to instruct the jury on the effects of its
allocation of negligence in accordance with § 25-21,185.09, they have done so where
the plaintiff's own contributory negligence was a defense at issue. See Russell v.
Stricker, 635 N.W.2d 734, 737, 740 (Neb. 2001); Wheeler v. Bagley, 575 N.W.2d
616, 620 (Neb. 1998).
Early in this litigation, in Winco's answer, Winco alleged that Margaret
Sherman was contributorily negligent. But by the time of trial, that affirmative
defense was apparently abandoned. The district court did not give a contributory-
negligence instruction to the jury, and in its brief, Winco concedes that contributory
negligence was not at issue at trial. Because contributory negligence was not at issue
at trial, and because the Shermans cite no persuasive Nebraska authority applying
Neb. Rev. Stat. §§ 25-21,185.09 and 25-21,185.11(2) outside of the contributory-
negligence context, we conclude that the district court committed no prejudicial error
by denying the requested instruction.
B. The Effect of a Violation of a Statute or Regulation
The Shermans also contend that the district court committed reversible error by
failing to instruct the jury on the effect of a violation of a statute or regulation. The
Shermans argue that the district court should have instructed the jury that the
violation of a statute or regulation is merely evidence of negligence and does not
constitute negligence per se. According to the Shermans, because the jury was not
given this instruction, it may have found for Winco because it erroneously concluded
that Stanley and Nate Kapustka were automatically negligent by virtue of their
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violation of a regulation issued by the Nebraska Fire Marshal's Office and should
therefore "bear the entire brunt of fault under the law." (Shermans' Br. at 46.) In
response, Winco contends that the Shermans failed to preserve this issue and therefore
our review is for plain error.
Even under the more lenient harmless-error standard, we find insufficient
prejudice to justify reversal for the district court's failure to give the instruction.
While it may have been appropriate for the district court to give such an instruction,
there is no basis in the record to conclude that the lack of such an instruction had a
"probable effect on [the jury's] verdict." Burry, 243 F.3d at 434. We will not order
a new trial here, after the jury has passed on the evidence, merely because there is a
metaphysical possibility that the jury's verdict was affected by the district court's
failure to give the instruction.
Winco presented many theories under which the jury may have found that
Winco was not liable. Among other arguments, Winco argued that it had not sold the
Saturn Missile; that there was no evidence that the Saturn Missile was prone to an
erratic flight path; that the warning label was legally sufficient; and that Winco–just
one of several companies in the chain of distribution–was not the proximate cause of
Mrs. Sherman's injuries. Winco did introduce the Nebraska fireworks regulation into
the record when examining Stanley Kapustka; and during its closing argument, Winco
argued that if Stanley Kapustka had not brought the illegal firework into Nebraska,
Mrs. Sherman would not have been injured. But beyond these two isolated references
to the regulation, the Shermans cite to no other time during the five-day trial in which
the illegality of the presence of the Saturn Missile in Nebraska was brought to the
jury's attention. Moreover, Winco did not argue to the jury that the Kapustkas' illegal
conduct was per se negligence, legally barring the Shermans' claims. For these
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reasons, we conclude that the district court did not commit reversible error by failing
to give the instruction on the effect of a violation of a statute or regulation.3
C. Instruction Requiring the Jury to Find that Mrs. Sherman was Among Those
Reasonably Expected to be Endangered by the Saturn Missile
The Shermans also contend that the district court erred by instructing the jury
that it was required to find that Mrs. Sherman was "among the group of people that
the Winco Defendants should reasonably have expected would be endangered by the
probable use of the Saturn Missile." (SA at 31, 33.) According to the Shermans, the
district court ought to have concluded as a matter of law that Mrs. Sherman was
among those expected to be endangered by the firework.
We recognize that the drafting committee's comments to the Nebraska Model
Jury instructions indicate that "in almost all cases this issue will be resolved as a
question of law," see NJI2d Civ. § 11.10, comments & authorities, but Nebraska law
also indicates that the determination of whether a legal duty exists "is a question of
law dependent on the facts in a particular case." Erickson, 738 N.W.2d at 459. In
Erickson, for example, the Nebraska Supreme Court characterized the question of
whether the plaintiff was a person whom the product's supplier should have expected
to be endangered by using the product as an issue of material fact. Id. at 462-63.
Here, we conclude that even if the district court improperly submitted the question to
the jury, on this record, the Shermans cannot meet the standard required to justify
3
To demonstrate prejudice, the Shermans rely on an affidavit from the jury
foreperson. In ruling on the Shermans' post-verdict motions, however, the district
court concluded that the affidavit is not competent evidence under Fed. R. Evid.
606(b). That determination is not challenged on appeal, and accordingly, we do not
consider the affidavit further.
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reversal. Slidell, Inc. v. Millennium Inorganic Chems., Inc., 460 F.3d 1047, 1054 (8th
Cir. 2006) ("[A] new trial is necessary only when the errors [in the district court's
instructions] misled the jury or had a probable effect on the jury's verdict."). The
instruction submitted by the district court did not misstate the law or mislead the jury
in any way. And there is no indication in this record that the submission of the
instruction prejudicially influenced the jury's verdict. As discussed above, there were
many theories under which the jury may have concluded that Winco was not liable for
Mrs. Sherman's injuries. The Shermans' assignment of prejudice is speculative.
Moreover, if the evidence at trial so clearly showed that Mrs. Sherman was among the
group of people reasonably expected to be endangered by the firework, as the
Shermans claim, then the district court's submission of this question to the jury was
hardly prejudicial because the jury would have reached the same conclusion. Because
we find no prejudice on this record, we conclude that the district court committed no
reversible error by permitting the jury to determine whether Mrs. Sherman was among
the group of people that Winco should have reasonably expected to be endangered by
the probable use of the Saturn Missile.
V.
Finally, we address Winco's cross-appeal of the district court's attorney's fees
award, which totaled $32,019.87. Winco argues that if we conclude that the district
court abused its discretion by allowing Winco's belated preemption amendment, and
reverse and remand for a new trial, then the attorney's fees award should be reversed
and vacated in its entirety. The Shermans do not agree that the full award should be
vacated, but concede that "[i]f this Court orders a new trial and allows Dr. Wood to
testify at the new trial . . . Winco should not be required to pay $15,426.37 related to
Dr. Wood's fees." (Shermans' Reply Br. at 24.)
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Part of the attorney's fees award–$15,426.37 worth–accounted for costs
incurred by the Shermans in preparing Dr. Wood's expert testimony. Those costs were
incurred unnecessarily, and that testimony became irrelevant, as a result of Winco's
belated preemption amendment. But because we reverse and remand for a new trial
on the state-law failure-to-warn claim, it is no longer true that those costs were
unnecessarily incurred as a result of Winco's counsel's conduct. As a result of our
decision, on remand, the Shermans will again be allowed to offer Dr. Wood's expert
testimony in support of their state-law failure-to-warn claim, effectively returning the
Shermans to the status quo ante. Because we concluded in part II that the district
court abused its discretion in allowing the preemption amendment, and because
$15,426.37 worth of the fee award was based on costs associated with Dr. Wood's
improperly excluded expert testimony, the admissibility of which will be considered
anew on remand, we reverse and vacate $15,426.37 of the fee award.
Winco also urges us to reverse and vacate the remaining portion of the award,
amounting to $16,593.50. But Winco makes no claim that the district court
improperly awarded the Shermans attorney's fees in the first instance, effectively
conceding that its conduct and the fee award meet the standard set out at § 1927.
Instead, Winco's position on appeal is that a reversal of the district court's decision
allowing the amendment requires a reversal of the related fee award.
The district court based its award of attorney's fees on § 1927, which authorizes
a district court to require an attorney to reimburse the excess costs and attorney's fees
reasonably incurred by the opposing party as a result of an attorney's "unreasonable[]"
and "vexatious[]" "multipli[cation] of the proceedings." That statutory authority for
the award of attorney's fees focuses on the conduct of the movant's opposing counsel.
Here, Winco's counsel has not multiplied the proceedings to any lesser degree and its
conduct is no less "unreasonabl[e]" and "vexatious[]" just because we conclude in part
II that the district court improperly permitted Winco to amend its answer. Winco's
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untimely pleading of the preemption defense after the scheduling deadline, without
good cause to do so, still caused the Shermans to incur fees unnecessarily. Our
resolution of the amendment issue above does not undermine the district court's
statutory rationale for the remaining $16,593.50 portion of the fee award in any way;
rather, it reinforces the validity of the award. Accordingly, we affirm the award in the
amount of $16,593.50.
The judgment of the district court is affirmed in part, reversed in part, and
remanded for further proceedings consistent with this opinion.
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