iLight Technologies, Inc. v. Clutch City Sports & Entertainment, L.P.

Opinion issued August 29, 2013

In The

Court of Appeals

For The

First District of Texas

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NO. 01-12-00574-CV

———————————

ILIGHT TECHNOLOGIES, INC., Appellant

V.

CLUTCH CITY SPORTS & ENTERTAINMENT, L.P., Appellee

On Appeal from the 157th District Court

Harris County, Texas

Trial Court Case No. 2009-76645

O P I N I ON

Clutch City Sports & Entertainment Inc. (“Clutch City”) sued iLight

Technologies, Inc. (“iLight”) for strict liability manufacturing defect and for

negligence. A jury found iLight liable under these theories and determined that

Clutch City had incurred damages in excess of $2.5 million. iLight appeals the

trial court’s judgment rendered on the jury’s verdict. Raising three issues, iLight

contends that the evidence is legally insufficient to support the judgment,

challenging the two liability findings and the damages award.

We reverse and render.

Background Summary

The Toyota Center, a sports and entertainment facility in downtown

Houston, opened in 2003. It is the home of the Houston Rockets and a venue for

other sporting and entertainment events. Clutch City operates, maintains, and

manages the Toyota Center. Clutch City entered into a “naming rights agreement”

with Gulf States Toyota to have the venue named “Toyota Center.” Toyota agreed

to pay approximately $5 million a year for the naming rights. As part of that

contract, Clutch City agreed to display a lighted “Toyota” logo on the roof of the

facility. A sign was installed on the Toyota Center roof, outlining Toyota’s logo.

The sign was illuminated by red Plexineon light emitting diode (“LED”) strips

manufactured by iLight.

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In February 2007, a fire occurred on the Toyota Center roof involving the

Plexineon sign. iLight replaced the affected sections of the LED sign without

charge to Clutch City. The cause of the 2007 fire was not investigated.

In February 2009, the Plexineon sign caught fire. The fire caused damage to

the Toyota Center’s roof, which cost $1,217.18 to repair. Clutch City replaced the

damaged sections of the LED sign with extra parts of the sign that it had in storage.

Clutch City lit the sign at night for another week after the repair but then noticed

that other sections of the LED lights appeared melted. For safety reasons, Clutch

City decided not to illuminate the sign.

Clutch City requested that iLight replace the damaged Plexineon sign at

iLight’s expense. iLight declined to replace the sign without charge. It asserted

that Clutch City’s use of a bleach-and-water solution and a high-pressure washer to

clean the roof had caused the deterioration and corrosion of the lights, which led to

their failure. iLight offered to replace the damaged portions of the LED sign at a

reduced cost. Clutch City refused the offer. The parties were unable to reach an

agreement with regard to replacement of the damaged sign. Clutch City replaced

the damaged portions of the roof-top sign in August 2011, replacing between 500

and 800 feet of the sign. The replacement cost was $168,434.61.

The illuminated roof-top sign is an important part of Toyota’s naming rights

agreement with Clutch City because it is a high-profile advertising medium.

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However, even after the 2009 fire, Toyota continued to pay Clutch City the

approximate $5 million as required by the naming rights agreement. Clutch City

negotiated an arms-length agreement with Toyota to offset the loss of advertising

that resulted from turning off the lights on the sign. Clutch City provided Toyota

with certain “make goods” in the form of alternate advertising media in the Toyota

Center. From February 2009 to August 2011, Clutch City claimed that it provided

alternative advertising to Toyota worth approximately $4.675 million.

Clutch City filed suit against iLight in November 2009. Over the course of

the litigation, Clutch City refined its claims against iLight. In its fourth amended

petition, Clutch City alleged that the fire was caused by an electrical short in the

LED strip, which had resulted from iLight’s defective manufacturing process.

Clutch City also alleged that iLight had been aware of defects in the LED lights but

had failed to warn Clutch City of the defects. Clutch City asserted claims against

iLight for strict products liability and for negligence.

As damages, Clutch City requested the cost to repair the Toyota Center’s

roof and the cost to replace the damaged portion of the sign. In addition, Clutch

City sought damages for the “loss of use” of the roof and the sign following the

2009 fire. Clutch City asserted that the loss-of-use damages were measured by the

value of the “make goods” or alternate advertising provided to Toyota. In other

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words, Clutch City asserted that it was entitled to $4.675 million for loss-of-use

damages.

Clutch City tried the case to a jury on three theories of liability: strict

liability manufacturing defect, strict liability marketing defect, and negligence. In

support of its manufacturing defect claim, Clutch City offered the testimony of two

experts. The report of one of those experts was also admitted into evidence. In

addition, Clutch City relied on evidence from a federal lawsuit filed by iLight

against the manufacturer of the LED light strip contained in iLight’s Plexineon

light product.

Of the three liability theories submitted, the jury found iLight liable for strict

liability manufacturing defect and for negligence, but it did not find iLight liable

for strict liability marketing defect. The jury awarded the following damages:

(1) $1,217.81 for the cost of repairs to the roof; (2) $168,434.61 for the cost of the

LED sign replacement; and (3) $2,337,575.00 for loss of use of the roof and LED

sign. The trial court rendered judgment on the jury’s verdict.

iLight had objected to the jury charge on the basis that there was legally

insufficient evidence to submit any of the liability claims to the jury. iLight also

filed post-judgment motions in which it challenged the legal sufficiency of the

evidence to support the jury’s liability findings on strict liability manufacturing

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defect and negligence. It further challenged the legal sufficiency of the evidence to

support the loss-of-use damages awarded to Clutch City. This appealed followed.

Legal Sufficiency

iLight presents three issues on appeal. In its first two issues, it contends that

the evidence was legally insufficient to support the liability findings. iLight’s third

issue challenges the sufficiency of the evidence to support the jury’s award of loss-

of-use damages.

A. Standard of Review

Because it is attacking the legal sufficiency of the evidence supporting

adverse findings on issues for which it did not have the burden of proof, iLight

must show that no evidence supports the jury’s adverse findings. Exxon Corp. v.

Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 215 (Tex. 2011) (citing Croucher

v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983)). Evidence is legally sufficient if it

“would enable reasonable and fair-minded people to reach the verdict under

review.” City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). In making

this determination, we credit favorable evidence if a reasonable fact-finder could

and disregard contrary evidence unless a reasonable fact-finder could not. Id. So

long as the evidence falls within the zone of reasonable disagreement, we may not

substitute our judgment for that of the fact-finder. Id. at 822. The trier of fact is

the sole judge of the credibility of the witnesses and the weight to give their

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testimony. Id. at 819. Although we consider the evidence in the light most

favorable to the challenged findings, indulging every reasonable inference that

supports them, we may not disregard evidence that allows only one inference. Id.

at 822.

This court may sustain a legal sufficiency (or no evidence) issue only if the

record reveals one of the following: (1) the complete absence of evidence of a vital

fact; (2) the court is barred by rules of law or evidence from giving weight to the

only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital

fact is no more than a scintilla; or (4) the evidence established conclusively the

opposite of the vital fact. Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev.

& Research Corp., 299 S.W.3d 106, 115 (Tex. 2009) (citing Merrell Dow

Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). Evidence is no more

than a scintilla if it is so weak as to do no more than create a mere surmise or

suspicion that the fact exists. Id. (citing Kroger Tex. Ltd. P’ship v. Suberu, 216

S.W.3d 788, 793 (Tex. 2006)).

B. Manufacturing Defect

In its first issue, iLight challenges the legal sufficiency of the evidence to

support the jury’s affirmative finding to the following question: “Was there a

manufacturing defect in the Plexineon product at the time it left the possession of

iLight that was a producing cause of the occurrence in question?”

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A manufacturing defect exists when a product deviates, in its construction or

quality, from the specifications or planned output in a manner that renders it

unreasonably dangerous. BIC Pen Corp. v. Carter, 346 S.W.3d 533, 540 (Tex.

2011); Cooper Tire & Rubber Co. v. Mendez, 204 S.W.3d 797, 800 (Tex. 2006);

Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). A plaintiff must

prove that the product was defective when it left the hands of the manufacturer and

that the defect was a producing cause of the plaintiff’s injuries. Ridgway, 135

S.W.3d at 600.

The jury in this case was properly instructed with the following definition of

a “manufacturing defect:”

A “manufacturing defect” means that the product deviated in its

construction or quality from its specifications or planned output in a

manner that renders it unreasonably dangerous. An “unreasonably

dangerous” product is one that is dangerous to an extent beyond that

which would be contemplated by the ordinary user of the product,

with the ordinary knowledge common to the community as to the

product’s characteristics.

iLight contends that Clutch City failed to offer more than a scintilla of

evidence to show that the Plexineon light product “deviated in its construction or

quality from its specifications or planned output.” The Supreme Court of Texas

has made clear that a showing that the product deviated in its construction or

quality from specifications or planned output is essential to maintaining a strict

liability manufacturing defect claim. See Ford Motor Co. v. Ledesma, 242 S.W.3d

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32, 41 (Tex. 2007); see also Dewayne Rogers Logging, Inc. v. Propac Indus., 299

S.W.3d 374, 383 (Tex. App—Tyler. 2009, pet. denied) (affirming summary

judgment when plaintiff offered no evidence showing that machine deviated from

specifications or planned output when it left manufacturer’s possession).1 This

requirement is in addition to showing that the product was defective when it left

the manufacturer and that the defect was a producing cause of the plaintiff’s

injuries. See Ledesma, 242 S.W.3d at 42. The supreme court explained that “[t]he

requirement of a deviation from the manufacturer’s specifications or planned

1

Courts in other jurisdictions have held that a plaintiff has failed to show a

manufacturing defect when no showing is made that the product deviated from the

manufacturer’s design specifications or its intended performance standards. See,

e.g., Linden v. CNH America, L.L.C., 673 F.3d 829, 834 (8th Cir. 2012) (affirming

trial court’s determination that plaintiff had failed to introduce sufficient evidence

of manufacturing defect and discussing distinction between manufacturing and

design defects); In re Coordinated Latex Glove Litig., 121 Cal. Rptr.2d 301, 315–

16 (Cal. Ct. App. 2002) (holding no manufacturing defect claim shown when

plaintiff failed to present evidence latex gloves did not meet design

specifications); Welch v. Technotrim Inc., 778 So.2d 728, 733 (La. Ct. App. 2001)

(upholding summary judgment because plaintiff could not produce evidence of

deviation from specifications or performance standards); Leverette v. Louisville

Ladder Co., 183 F.3d 339, 341 (5th Cir. 1999) (holding expert’s testimony

alleging defect in ladder was insufficient to prove manufacturing defect under

Mississippi law because there was no evidence that flaw deviated from

manufacturer’s design); Atkins v. Gen. Motors Corp., 725 N.E.2d 727, 731 (Ohio

Ct. App. 1999) (concluding trial court properly granted summary judgment on

manufacturing defect claim because plaintiffs did not show or claim that product

deviated in any material way from manufacturer’s design specifications, formula,

or performance standards).

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output serves the essential purpose of distinguishing a manufacturing defect from a

design defect.”2 Id.

At trial, Clutch City’s primary theory of a manufacturing defect was that

faulty soldering within the LED light strip caused a short circuit that in turn led to

overheating and the fire. Subsidiary to this theory, Clutch City also presented

expert testimony that unknown contaminants within the internal portion of the

LED light strips and corroded components also constituted manufacturing defects,

which possibly caused the fire.

To determine what caused the lights to fail, Clutch City sent a section of the

LED lights that had thermal damage to Insight Analytical Labs (“IAL”) for testing.

At trial, Gary Shade, who works for IAL, testified by deposition. He stated that he

analyzed and tested a six-foot long section of the lights, which showed evidence of

thermal damage. He testified that x-ray imaging of the light section revealed that

2

Other jurisdictions and the Restatement of Torts also recognize manufacturing

defect and design defect as distinct theories of liability. See Linden, 673 F.3d at

834. For example, the Eleventh Circuit Court of Appeals has explained the

distinction as follows:

This distinction between “aberrational” defects and defects

occurring throughout an entire line of products is frequently

used in tort law to separate defects of manufacture from those

of design. . . . Stated another way, the distinction is between

an unintended configuration [a manufacturing defect], and an

intended configuration that may produce unintended and

unwanted results [a design defect].

Harduvel v. Gen. Dynamics Corp., 878 F.2d 1311, 1317 (11th Cir. 1989).

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an anomalous “solder bridge” had developed between the “common” or ground

power strip and the supply power strip, causing a short circuit.

According to Shade, his investigation revealed that excessive solder was

used to attach the supply wire to the supply strip. The excess solder had migrated,

acting as a conductor between the supply strip and the ground strip. This created a

short circuit, allowing an excessive flow of current. This led to overheating in

close proximity to the plastic on the lights. Shade opined that this caused thermal

damage to the lights and also led to the fire.

Shade testified that, although the “excess” solder would have been present at

the time it left iLight’s possession, the solder bridge connecting the supply and

ground strips would not have initially been present. He stated that there was likely

a gap between the solder holding the supply wire in place and the ground strip

when the strip was originally manufactured. Shade explained that, over time, such

things as temperature changes, humidity, and corrosion likely caused the excess

solder to make contact with the ground strip, creating a bridge, shorting the two

strips together.

Clutch City points to Shade’s testimony as evidence supporting the jury’s

manufacturing-defect finding. However, it is a matter of logic that to demonstrate

how a product deviated from its specifications or planned output would first

require a showing of what the manufacturer’s specifications or planned output are

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for that product. Shade did not testify regarding what the product specifications

required, if anything, with respect to the soldering of the supply wire, including the

amount or positioning of the solder. When asked whether he had reviewed the

plans or specifications for the Plexineon light product, Shade responded that he did

not have access to them.

Even presuming that iLight had no express design specifications for the

soldering, no evidence showed whether the supply wire had been soldered in a

manner or in a configuration unintended by iLight. Shade gave no testimony

indicating why he characterized the solder attaching the supply wire as “excess”

solder. Shade did not explain whether he believed that the product specifications

called for what he termed “excess” solder or whether the solder used was in excess

to what iLight had intended or planned when the product was manufactured.

When asked whether “a mistake was made” when the supply wire was

soldered, Shade replied, “That would be the conclusion, yes.” However, “[e]xpert

opinions must be supported by facts in evidence, not conjecture.” Marathon Corp.

v. Pitzner, 106 S.W.3d 724, 729 (Tex. 2003) (citing Burroughs Wellcome Co. v.

Crye, 907 S.W.2d 497, 499–500 (Tex. 1995)). An expert’s simple ipse dixit is

insufficient to establish a matter; rather, the expert must explain the basis of his

statements to link his conclusions to the facts. See City of San Antonio v. Pollock,

284 S.W.3d 809, 818 (Tex. 2009). “[I]f no basis for the opinion is offered, or the

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basis offered provides no support, the opinion is merely a conclusory statement and

cannot be considered probative evidence.” Id. Here, Shade did not explain the

basis for his conclusion that “a mistake” was made with respect to the soldering.

To the contrary, if the manner of soldering did not depart from iLight’s intended

process or configuration, then there was no manufacturing defect.

In short, iLight’s product specifications or planned output may have

addressed or taken into consideration the soldering process and quantified the

amount, or indicated the placement, of solder to be used in a solder joint; however,

no evidence was presented on this point. For this reason, it is possible that iLight

complied with its own product specifications and planned output with respect to

the soldering process. In other words, it may be that iLight did exactly what it

intended to do with respect to manufacturing and soldering the Plexineon product

but did not solder the supply wire in accordance with industry standards or what

hindsight has determined to be a faulty design. If so, the faulty soldering may be a

matter of design defect rather than manufacturing defect. See Cooper Tire &

Rubber Co., 204 S.W.3d at 808 (noting, in discussion of causation issue, that

plaintiff’s expert had not eliminated possibility of design defect). In any event,

Shade’s testimony presented no evidence that, when it left iLight’s possession, the

Plexineon sign deviated in its construction or quality from iLight’s specifications

or planned output or that the product in any way departed from exactly how iLight

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had intended to manufacture it. See Pollock, 284 S.W.3d at 818; see also Coastal

Transp. Co. v. Crown Cent. Petrol. Corp., 136 S.W.3d 227, 233 (Tex. 2004)

(holding that legal-sufficiency challenge may be made to expert testimony that is

speculative or conclusory on its face, even in the absence of valid objection to its

admissibility).

Clutch City also presented the expert testimony of Kurt Humphrey, an

experienced engineer, to support its manufacturing claim. In addition to his

testimony at trial, Clutch City introduced Humphrey’s expert report into evidence.

As had Shade, Humphrey also examined sections of the Plexineon sign exhibiting

thermal damage. He testified that x-ray imaging showed “solder bridging”

between power and ground strips. Humphrey wrote in his report that “the ‘solder

bridge’ identified in the IAL report is a plausible explanation for the localized

overheating.” Humphrey characterized the solder bridging as a “manufacturing

defect.” However, Humphrey neither testified about, nor discussed in his report,

iLight’s specifications for the product or how iLight had intended the soldering to

be done on its product. In short, with respect to the allegation of faulty soldering,

Humphrey’s expert opinion presented no evidence that the Plexineon product

deviated in its construction or quality from how iLight intended or planned to

manufacture the Plexineon product. See Pollock, 284 S.W.3d at 818.

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Clutch City also points to its evidence from the federal lawsuit filed by

iLight against Marktech—the company that supplied the LED light strips to iLight

for its Plexineon product—as showing that the product deviated in its construction

or quality from its specifications or planned output. In that suit, iLight has alleged

that Marktech supplied it with defective LED strips. At trial, iLight’s CEO, Sean

Callahan, testified that the defect alleged in that case arises from complaints by

iLight’s customers that the LED strips supplied by Marktech cease to illuminate or

light up. The suit is not premised on allegations that the LED strips are

overheating and causing fires.

iLight’s federal complaint does indicate, in general terms, that Marktech did

not follow iLight’s product specifications in manufacturing the LED strips. In the

complaint, iLight alleges that Marktech failed to follow specifications by switching

component parts. Clutch City also points to an affidavit in the federal suit, signed

by Sean Callahan, in which he states that another company, Cree, which supplies

LEDs to Marktech, had claimed that Marktech had failed to control “temperatures

and the duration” during wave soldering. None of the evidence from the federal

lawsuit, however, addresses soldering specifications or planned output by which

the jury could have measured any deviation. Nor does that suit contain allegations

by iLight that Marktech used excess solder material or that anomalous solder

bridging caused the product failures claimed in that litigation. The evidence from

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that suit is of little probative value in determining whether the Plexineon product

deviated in its construction or quality from its specifications or planned output with

respect to the allegations in this suit.

We hold that iLight did not present legally sufficient evidence to show that

the Plexineon sign deviated in its construction or quality from its specifications or

planned output with respect to the claim that faulty soldering constituted a

manufacturing defect. However, as mentioned, Clutch City also offered evidence

at trial identifying other conditions in the Plexineon product that it asserted

constituted manufacturing defects.

Clutch City’s process engineering expert, Kurt Humphrey, testified that, in

addition to the “soldering bridge,” he detected other anomalous conditions in

sections of the Plexineon product that he analyzed. He identified these conditions

in his expert report. Specifically, Humphrey identified the following conditions

that he referred to as “manufacturing defects”: (1) unknown internal contaminants

found within the plastic encasement of the LED light strip and (2) corrosion and

discoloration of solder joints, resulting from an unknown chemical reaction,

causing degradation of the joints. He testified that these conditions would have

occurred during, and been present since, the manufacturing process. Humphrey’s

testimony regarding these conditions provided some evidence to show a deviation

in quality from the planned output. Contaminants and corroded solder joints are

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not elements that a manufacturer, such as iLight, would intend or plan to

incorporate into its product during the manufacturing process. See Am. Tobacco

Co. v. Grinnell, 951 S.W.2d 420, 434 (Tex. 1997) (holding that pesticide found in

cigarettes is a deviation from the planned output type of defect because no cigarette

manufacturer would intend to include pesticides in its cigarettes). Nonetheless, to

prove its strict liability manufacturing defect claim, Clutch City was still required

to show that such manufacturing defects were a producing cause of the fire. See

Ridgway, 135 S.W.3d at 600.

iLight contends that Clutch City offered legally insufficient evidence to

establish producing cause. Because we have determined that legally insufficient

evidence was offered to show that the faulty or excess solder was a deviation from

specifications or planned output—and thus could not serve to establish a

manufacturing defect—we do not analyze whether such alleged defect was a

producing cause of Clutch City’s injuries. Instead, we limit the analysis to

determining whether evidence was presented to show that the other manufacturing

defects specifically identified by Humphrey—such as, unknown internal

contaminants and degraded solder joints—were producing causes of the fire.

C. Producing Cause

The jury charge asked whether there was a manufacturing defect in the

Plexineon product at the time it left iLight’s possession that was a producing cause

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of the fire. “Producing cause” was correctly defined as a “cause that was a

substantial factor in bringing about the occurrence, and without which the

occurrence would not have occurred.” The charge also informed the jury that there

may be more than one producing cause. A producing cause must be a cause-in-

fact; that is, it must be a substantial factor in bringing about the injury, and a cause

without which the injury would not have happened. See BIC Pen, 346 S.W.3d at

541; Ledesma, 242 S.W.3d at 46.

Expert testimony is generally required in manufacturing defect cases to

prove that the specific defect caused the accident. BIC Pen, 346 S.W.3d at 542;

see Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 583 (Tex. 2006) (“Proof other

than expert testimony will constitute some evidence of causation only when a

layperson’s general experience and common understanding would enable the

layperson to determine from the evidence, with reasonable probability, the causal

relationship between the event and the condition.”).

Clutch City’s usage of the bleach-and-water solution and a high pressure

washer was iLight’s primary defense at trial. It argued that the use of this cleaning

method accounted for the degradation and corrosion observed in the Plexineon

product. In his report and at trial, Humphrey opined that the degradation and

corrosion observed in the internal components of the product may have led to a

short circuit, to overheating, and to the fire. However, based on tests that he

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conducted, Humphrey ruled out the bleach-and-water solution used to clean the

Toyota Center roof as a cause for the degradation and discoloration that he saw in

the internal components of the Plexineon light product. In his report, Humphrey’s

wrote, “[T]he specific locations and variation in severity among the examined sites

showing discoloration, staining, degradation of the solder joints, and evidence of

overheating appear to be inconsistent with chemical attack from an external source

as a root cause of the anomalies.”

Humphrey’s report continues,

[A]lternative mechanisms and other contributing factors, including but

not limited to, contamination during manufacturing, e.g. pre-

encapsulation contamination, soldering anomalies, material failures,

and component failures, must be considered as more likely causes for

the discoloration, degradation, and evidence of localized overheating

observed among the iLight lighting samples examined. Although the

root cause of the localized heating in this particular case remains

undetermined, manufacturing defects, e.g. soldering anomalies (as

indicated in IAL’s failure analysis report) and contaminants;

component failures, e.g. discrete component failures including LEDs,

resistors, voltage regulators, constant current drivers, etc., product

design flaws or inadequate tolerances, and/or material integrity

failures are among the most common and suspected culprits.

The results of this preliminary investigation of selected iLight

Plexineon® LED lighting samples from the Toyota Center and review

of provided technical documentation point to: 1) LED strip fabrication

defects and/or contaminants, 2) intrinsic material or component

failure, and/or 3) fundamental design flaws or sensitivities associated

with 1) or 2) as the most likely causes of the lighting failures.

Preliminary assessment of the installation, maintenance, and cleaning

methods and procedures used at the Toyota Center with respect to the

iLight Plexineon® LED lighting system appear to be consistent with

iLight requirements and general engineering practice. Although the

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root cause of the Toyota Center LED lighting fires remains unknown

at this time, the preponderance of evidence points to the potential

causes enumerated above, not installation or maintenance conditions.

The results of this preliminary investigation are insufficient to draw

firm conclusions regarding the root cause(s) of the iLight Plexineon®

LED lighting localized heating and related fires. It is recommended

that: 1) further product investigations, including x-section and EDS

(or other chemical analysis) be performed at selected sites on iLight

Plexineon® LED lighting samples to gather more data to inform root

cause failure analysis, 2) detailed technical information be provided

by iLight and its suppliers describing key process steps and

capabilities, PCB layout dimensions and tolerances, components,

equipment, and materials used in the fabrication of the iLight

Plexineon® LED lighting system in question, and 3) request input

from iLight regarding Plexineon® LED lighting design parameters,

product test and reliability data, and product safeguards with respect

to over-power, over-current, and over-temperature conditions.

In sum, rather than establishing what specific condition caused the fire,

Humphrey’s report ruled out what did not cause the fire; that is, it eliminated

Clutch City’s cleaning and maintenance, including its use of bleach on the lights,

as a cause for the product failure and the fire. The report enumerated possible

causes of the fire, including not only what Humphrey termed “manufacturing

defects,” but also “product design flaws” and “fundamental design flaws.”

At trial, Humphrey somewhat narrowed his opinion. He testified that he

believed the probable cause of the fire was a short circuit associated with

conditions he called “manufacturing defects.” However, as he did in his report, he

stated that his analysis was preliminary in nature because he did not have sufficient

detailed information and had not conducted an adequate in-depth analysis to

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determine the “root cause” or a specific cause of the fire. Humphrey opined that

the fire could have been caused by any one of the “manufacturing defects” that he

identified, including a soldering anomaly as found by Shade and IAL.

In its brief, Clutch City points out that it was required only to show that a

manufacturing defect was a substantial factor in bringing about the fire and was not

required to show that a manufacturing defect was the singular cause of the fire.

See Ledesma, 242 S.W.3d at 45–46. Nonetheless, Clutch City was required to

show that the fire would not have occurred in the absence of a manufacturing

defect. See id. at 46. We agree with iLight that Clutch City did not make this

showing.

Although he testified that he believed a “manufacturing defect” caused the

fire, Humphrey did not address in his testimony which manufacturing defect was

the most likely cause. To the contrary, Humphrey made clear that further study

and analysis was required to determine which of the identified manufacturing

defects caused the fire. Among the defects he recognized was the soldering

anomaly as identified by Shade. As discussed supra, legally insufficient evidence

was presented at trial to establish the soldering anomaly as a “manufacturing

defect,” as defined by the jury charge and the law. Humphrey did not assign any

more likelihood to the soldering anomaly being the manufacturing defect that

caused the fire than he did to the other manufacturing defects that he identified.

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Similarly, Clutch City offered no proof to address whether a design defect may, or

may not, have been a cause for the fire. In contrast, Humphrey’s report expressly

identified “fundamental design flaws” as a possible cause. His report did not

assign any more likelihood to a manufacturing defect being the cause of the fire

than a design defect.

The evidence presented by Clutch City did not contain proof that

manufacturing defects, such as unknown contaminants or corroded parts, were

more likely causes of the fire than a soldering anomaly. Nor did Clutch City

eliminate design defect as a possible cause of the fire. See Cooper Tire, 204

S.W.3d at 807 (“[E]ven if plaintiffs had eliminated every conceivable reason for

the tire failure other than a product defect existing when the tire left Cooper Tire’s

plant, they did not eliminate the possibility of a design defect.”) Accordingly,

there was less than a scintilla of evidence from which the jury could have

determined that the source of the fire was one of the alleged defects that it could

have found to be a manufacturing defect. See Tamez, 206 S.W.3d at 583.

We hold that the evidence was legally insufficient to show that a

manufacturing defect was a producing cause of the fire. We sustain iLight’s first

issue.

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D. Negligence

iLight challenges the legal sufficiency of the evidence to support the jury’s

affirmative finding that iLight’s negligence proximately caused the fire. The

charge defined negligence as “the failure to use ordinary care, that is, failing to do

that which a person of ordinary prudence would have done under the same or

similar circumstances or doing that which a person of ordinary prudence would not

have done under the same or similar circumstances.”

To support the jury’s negligence finding, Clutch City points to the testimony

of iLight’s CEO, Sean Callahn, in which he stated that iLight’s quality assurance

and quality control procedures did not detect the product defect that was involved

in iLight’s federal lawsuit against Marktech, the manufacturer of the LED light

strips. Clutch City also premises its negligence claim on iLight’s knowledge that

the Plexineon product contained defective LED lights sold to it by Marktech.

Clutch City intimates that iLight knew of the defects when it replaced the

Plexineon sign on the Toyota Center roof following the 2007 fire. On appeal,

Clutch City asserts that “iLight discovered that its LED sign parts [sold to it by

Martech] were defective as early as late 2007, but there was no change in quality

control procedures, manufacturing, or any warnings to Clutch City prior to the

2009 fire.”

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Clutch City offered into evidence filings from iLight’s federal lawsuit

against Marktech indicating that iLight had submitted LED light strips to

independent laboratories for testing in late 2007 and that the testing had shown the

strips were defective. In an affidavit from the federal litigation, CEO Sean

Callahan testified that iLight had been told by Cree—the company who supplied

the LEDs to Marktech—that Marktech was using too much heat when soldering

the LED lights. At trial, Callahan explained that Cree claimed that the heat used

by Marktech to solder the LEDs was too high, thereby damaging the LED lights

supplied by Cree to Marktech. However, there was no evidence that the soldering

issue reported to iLight by Cree was an issue of excess solder or solder bridging,

which is the primary defect alleged in this suit.

At trial, Callahan testified that the defect at issue in the federal litigation

with Marktech involved a failure of the LED lights to continue to illuminate.

Callahan testified that it was determined that power was not reaching the LEDs to

illuminate them. In other words, the lights were going out, and iLight’s customers

experiencing this problem were dissatisfied. Callahan testified that to determine

whether the LEDs had the illumination defect at issue in the Marktech suit required

destructive testing of the product. Callahan stated that he was not aware that the

illumination defect at issue in the federal suit resulted in any overheating problems

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or in any fires. Callahan indicated that iLight had not informed Clutch City of the

Marktech issue because it did not affect Clutch City.

As part of its negligence claim, Clutch City was required to show that

iLight’s alleged negligence proximately caused the fire. See W. Invs., Inc. v.

Urena, 162 S.W.3d 547, 550 (Tex. 2005). Here, the jury was instructed,

“Proximate cause” means a cause that was a substantial factor in

bringing about an event, and without which cause such event would

not have occurred. In order to be a proximate cause, the act or

omission complained of must be such that a person using ordinary

care would have foreseen that the event, or some similar event, might

reasonably result therefrom.

Corresponding to producing cause in the strict products liability cause of

action, proximate cause in the negligence cause of action required proof that

iLight’s acts or omissions were a substantial factor in bringing about the fire and

without which the fire would not have occurred. See Metro Allied Ins. Agency,

Inc. v. Lin, 304 S.W.3d 830, 835 (Tex. 2009).

Here, even presuming iLight had a duty (1) to warn Clutch City about the

illumination defect, (2) to change its quality control procedures to detect the

illumination defect, and (3) to change its manufacturing process to prevent the

illumination defect, there is no evidence that but for these failures the fire would

not have occurred. See Sw. Key Program, Inc. v. Gil-Perez, 81 S.W.3d 269, 274

(Tex. 2002) (applying but for causation requirement to negligence case). No

evidence was introduced showing that the failure-to-illuminate problem at issue in

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the federal suit was caused by, or was related to, the defects alleged to have caused

the fire in this suit. In short, less than a scintilla of evidence was offered to show a

correlation between the failure-to-illuminate defect and the fire. Thus, we hold

that the evidence was legally insufficient to establish the element of proximate

causation and to support the jury’s negligence finding.

We sustain iLight’s second issue. 3

Conclusion

We hold that the evidence was legally insufficient to support the jury’s

affirmative liability findings for strict liability manufacturing defect and for

negligence. These are the only two liability findings supporting the judgment.

Accordingly, we reverse the judgment of the trial court and render judgment that

Clutch City take nothing by its claims against iLight.

Laura Carter Higley

Justice

Panel consists of Justices Higley, Brown, and Halbach.4

3

Because of the resolution of issues one and two, we do not reach the third issue,

which challenges the legal sufficiency of the evidence to support the loss-of-use

damages.

4

The Honorable Joseph “Tad” Halbach, Judge of the 333rd District Court of Harris

County, participating by assignment.

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