                 United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 14-1853
                        ___________________________

Arena Holdings Charitable, LLC, a Delaware limited liability company; RE Arena,
                      Inc., a Nevada foreign corporation

                      lllllllllllllllllllll Plaintiffs - Appellants

                                           v.

                             Harman Professional, Inc.

            lllllllllllllllllllll DefendantThird Party Plaintiff - Appellee

                                           v.
                                            .

       Impulse Group, Inc.; Impulse Group LLC; HB Sound & Light, Inc.

                      lllllllllllllllllllllThird Party Defendants

                         ON Semiconductor Corporation

                lllllllllllllllllllllThird Party Defendant - Appellee
                                      ____________

                    Appeal from United States District Court
                   for the District of North Dakota - Bismarck
                                  ____________

                          Submitted: November 12, 2014
                               Filed: May 7, 2015
                                 ____________
Before RILEY, Chief Judge, BEAM and GRUENDER, Circuit Judges.
                              ____________

BEAM, Circuit Judge.

      Arena Holdings Charitable, LLC, and RE Arena, Inc. ("Arena Holdings")
appeal the district court's1 grant of summary judgment in favor of Harman
Professional in this tort claim arising out of a fire that occurred at the Ralph Engelstad
Arena in Grand Forks, North Dakota. We affirm.

I.    BACKGROUND

       The facts involved in this case as described by the district court are uncontested
on appeal. This matter arises from a fire that occurred at the Ralph Engelstad Arena
on July 3, 2011. Arena Holdings alleges the fire started when a Crown Macro-Tech
5002VZ amplifier produced a direct current to a speaker that spread to adjoining
speakers located in the catwalk area of the Engelstad Arena. Harman Professional is
the manufacturer of the alleged defective amplifier, and Impulse Group installed the
sound reinforcement system at the Engelstad Arena when it was originally built, and
so installed the amplifier as well.

       The fire caused approximately $5 million of damage throughout the Engelstad
Arena, including damage to the building and fixtures, as well as damage to personal
property. The fire directly damaged the arena structure and equipment in the vicinity
of the amplifier and speakers. The presence of smoke and soot throughout the
Engelstad Arena after the fire caused additional damage. Arena Holdings initiated
this action against Harman alleging negligence, strict liability and post-sale failure-to-

      1
       The Honorable Daniel L. Hovland, United States District Judge for the District
of North Dakota.

                                           -2-
warn claims. Harman then filed a third-party complaint against Impulse Group, and
others. The district court granted Harman's motion for summary judgment, finding
that the economic loss doctrine precluded Arena Holdings from recovering tort
damages.

II.   DISCUSSION

       We review the district court's grant of summary judgment de novo. Torgerson
v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011). Summary judgment is
proper "if the pleadings, the discovery and disclosure materials on file, and any
affidavits show that there is no genuine issue as to any material fact and that the
movant is entitled to judgment as a matter of law." Id. (quotation omitted).

      A.     Economic Loss Doctrine

       Under the economic loss doctrine in North Dakota, economic loss resulting
from damage to a defective product, as distinguished from damage to persons or other
property, may be recovered in a cause of action sounding in contract, but not in tort.
Leno v. K & L Homes, Inc., 803 N.W.2d 543, 550 (N.D. 2011). "The economic loss
doctrine distinguishes between bargain expectation interests, which are protected
under contract law, and safety interests, which are protected under tort law." Steiner
v. Ford Motor Co., 606 N.W.2d 881, 885 (N.D. 2000). North Dakota has yet to
directly rule on the issue presented here–whether, or to what extent, redress can be
sought in tort where there is injury not only to the defective product but also to other
property.

       In 1996, this circuit had occasion to predict how North Dakota would analyze
this very subject in Dakota Gasification Co. v. Pascoe Building Systems and held that
the North Dakota Supreme Court would likely conclude "that the economic loss
doctrine extends to preclude liability in tort for physical damage to other nearby

                                          -3-
property of commercial purchasers who could foresee such risks at the time of
purchase." 91 F.3d 1094, 1101 (8th Cir. 1996). The facts and circumstances of
Dakota Gasification as they relate to the contracting parties in this case are nearly
identical.

       In Dakota Gasification, the predecessor to the owner of a large coal gasification
plant contracted for the construction of a federally guaranteed $2 billion synthetic
natural gas production plant, which was to be "one of the largest synthetic fuel plants
in the world and the only one of its kind in the United States." Id. at 1096. In part,
the plans called for the construction of an oxygen plant, which was to be housed in
a separate steel building but still within the larger plant. Id. Down a chain of
subcontractors involved in the overall project, none of whom directly contracted with
the Dakota Gasification plaintiff, one subcontractor that was to furnish the pre-
engineered metal building that would enclose the oxygen plant contracted with
Defendant Pascoe Building Systems who furnished the structural steel for the
building. Id.

       During the construction process in Dakota Gasification, several defective welds
were discovered on some of the Pascoe materials and Pascoe repaired them. Id. The
building was ultimately accepted after construction was completed. Id. However,
eight years later, the roof of the building collapsed, causing damage to the steel
building as well as parts of the oxygen plant contained within. Id. at 1097. The
owner of the gasification plant sued Pascoe, among others, seeking to recover
damages. Id. On appeal of an adverse summary judgment ruling in favor of Pascoe,
the Eighth Circuit predicted that North Dakota would take the "modern,"
foreseeability approach to the economic loss doctrine. Id. at 1100-01. Applying this
approach, this court held that because damage to the other property in the physical
proximity of the oxygen plant was foreseeable and within the contemplation of the
parties when the oxygen plant was built, the economic loss doctrine precluded
recovery. Id. at 1101.

                                          -4-
       Arena Holdings contends that Dakota Gasification missed the mark, pointing
to a Supreme Court decision in 1997, see Saratoga Fishing Co. v. J.M. Martinac &
Co., 520 U.S. 875 (1997), as well as the Restatement (Third) of Torts: Products
Liability § 21, which both take a different approach to the economic loss doctrine.
Arena Holdings essentially urges this court to define a more bright line rule–that
physical damage to anything other than the product itself would be considered
damage to "other property" and therefore subject to suit in tort. This, they argue, is
more in line with the Supreme Court's articulation in Saratoga Fishing and is most
likely the avenue North Dakota would travel.

        In Saratoga Fishing, the Court addressed the limits on the damages that a tort
plaintiff can recover for physical damage to property caused by a defective product.
520 U.S. at 876. The admiralty case involved a defectively designed hydraulic
system in a fishing vessel, and the specific issue was whether equipment that had
been added on by the boat's initial owner after its purchase from the manufacturer was
"other property" such that its loss could be recovered in tort. Id. at 877-78. The ship
itself constituted the original property. Id. at 877. Applying and building upon its
previous decision in East River S.S. Corp. v. Transamerica Delaval Inc., 476 U.S. 858
(1986), the Court determined that equipment added to a product after manufacture is
not part of the original property, and in fact is "other property," and compensation for
damage to this other property can be recovered in tort. Id. at 879, 881.

       Arena Holdings also alleges that the most recent version of the Restatement of
Torts adopts the Saratoga Fishing approach as to whether damages to "other property"
due to a defective product can be recovered in tort. Restatement (Third) of Torts:
Products Liability Ch. 4, Topic 3, § 21 cmt. e ("A defective product that causes harm
to property other than the defective product itself is governed by the rules of this
Restatement. What constitutes harm to other property rather than harm to the product
itself may be difficult to determine."). According to Arena Holdings, the Court's
position in Saratoga Fishing (bolstered by the Restatement) provides a reason for us

                                          -5-
to distance ourselves from the Dakota Gasification decision. At bottom, though,
Saratoga Fishing is inapposite in the instant analysis primarily because it does not
construe North Dakota law, as we are bound to do, but rather was an admiralty case
and thus does not address the heart of the matter we now face.

       The North Dakota Supreme Court has rarely spoken of the economic loss
doctrine subsequent to Dakota Gasification, and as relevant to the specific question
before us today, has only done so in dicta. Arena Holdings cites this dicta, however,
in support of its position on appeal. In Clarys v. Ford Motor Co., 592 N.W.2d 573
(N.D. 1999), the plaintiff sought to recover in tort for the loss of a used van that was
destroyed by fire due to a defective ignition switch. Id. at 573. Damage to "other
property" was not at issue in the case. In dicta, however, the Supreme Court of North
Dakota stated that there was a distinction between damage to the product and damage
to "other property" and that this distinction was not without consequence under the
public policy of North Dakota. Id. at 574-75. The court cited the Restatement
(Third) of Torts, and noted that while the economic loss doctrine should preclude tort
recovery for damage to the defective product itself, when the defective product causes
damage to persons or other property, tort law would apply. Id. at 578-79; see also
Steiner, 606 N.W.2d at 884 (applying the economic loss doctrine in a case where the
only damage was to the defective product, a car, and quoting the language from
Clarys distinguishing the situation from when the defective product causes damage
to persons or other property). The ultimate holding in Clarys, however, only clarified
that the economic loss doctrine applies equally in commercial and consumer contexts
alike, as that was the "sole" issue raised. Clarys, 592 N.W.2d at 574, 579.
Importantly, Clarys did not discuss the rationale underlying the economic loss
doctrine in the context of discerning the definition of "other property" and where the
line falls between "[t]he separate and distinct functions served by tort and contract
law." Id. at 575.




                                          -6-
        While we acknowledge that some doubt concerning the issue at hand is raised
by North Dakota's subsequent discussion of the economic loss doctrine, Clarys and
Steiner do not stand as decisive legal authority sufficient to conclude that North
Dakota would shun the foreseeability approach advanced in Dakota Gasification. It
still remains that North Dakota has specifically discerned the very critical distinction
that exists between contract and tort and the balance achieved by limiting liability so
that one does not subsume the other. Too, this dicta could be interpreted differently.
It is not axiomatic that North Dakota's later discussion points to a rejection of the
foreseeability approach to the economic loss doctrine. Clarys acknowledges that the
economic loss doctrine protects the purchaser's expectation of receiving the
bargained-for product, and that the comprehensive framework available in contract
compensates consumers when a product fails to fulfill a purchaser's economic
expectations. Clarys, 592 N.W.2d at 576. "'Tort principles more adequately address
the creation of an unreasonable risk of harm when a person or other property sustains
accidental or unexpected injury.'" Id. (quoting Alloway v. Gen. Marine Indus., 695
A.2d 264, 268-69 (N.J. 1997)). "The economic loss rule is the fundamental boundary
between contract law, which is designed to enforce the expectancy interests of the
parties, and tort law, which imposes a duty of reasonable care and thereby encourages
citizens to avoid causing physical harm to others." Id. (internal quotation omitted).
These analyses discussed in Clarys parallel that of the foreseeability approach used
when discussing damage to "other property," and it is thus not certain that if faced
with the very issue of how to define "other property" in light of those considerations,
North Dakota would not follow suit and apply the foreseeability approach.

       Barring tort claims where a plaintiff seeks economic damages for foreseeable
losses for which the plaintiff could have contractually allocated risk is admittedly no
longer a "modern trend" as we described in 1996. Dakota Gasification, 91 F.3d at
1099. However, neither is it an antiquated or disfavored approach. In fact, the Third
Circuit recently discussed the split in authority regarding the meaning of "other
property" in the context of the economic loss doctrine and deduced that:

                                          -7-
      [t]he majority of jurisdictions employ some variation of a test under
      which tort remedies are unavailable for property damage experienced by
      the owner where the damage was a foreseeable result of a defect at the
      time the parties contractually determined their respective exposure to
      risk, regardless whether the damage was to the "goods" themselves or
      to "other property."

Travelers Indem. Co. v. Dammann & Co., 594 F.3d 238, 250 (3d Cir. 2010) (internal
quotation omitted) (predicting the course New Jersey would take on the matter and
collecting cases employing the foreseeability approach as opposed to those applying
a more bright line approach).

       The similarities between the instant case and Dakota Gasification, in the end,
dictate the result. No matter our independent inquiry today, and because North
Dakota has yet to speak on the matter, we follow the precedent established in Dakota
Gasification.2

      Although our circuit has never specifically determined the binding effect
      of a state law determination by a prior panel, other circuits defer to prior
      panel decisions absent a subsequent state court decision or statutory
      amendment that makes the prior federal opinion clearly wrong. This
      provides us with an additional basis for our holding.

AIG Centennial Ins. Co. v. Fraley-Landers, 450 F.3d 761, 767-68 (8th Cir. 2006)
(alteration, citations and internal quotation omitted). "Absent an intervening opinion


      2
        Exercising our sound discretion, and because nothing has transpired in North
Dakota since this court's Dakota Gasification prediction that would alter an analysis
of the matter, we decline Arena Holding's request to certify a question to the North
Dakota Supreme Court pursuant to Rule 47 of the North Dakota Rules of Appellate
Procedure. Babinski v. Am. Family Ins. Group, 569 F.3d 349, 353 (8th Cir. 2009)
("Whether a federal court should certify a question to a state court is a matter of
discretion." (quotation omitted)).

                                          -8-
by a [North Dakota] court, [Dakota Gasification] controls this appeal." Washington
v. Countrywide Home Loans, Inc., 747 F.3d 955, 958 (8th Cir.), cert. denied, 135 S.
Ct. 307 (2014); see also Huffman v. Credit Union of Texas, 758 F.3d 963, 966 (8th
Cir. 2014) (holding that "we are bound by our [prior panel] decision" concerning the
meaning of state law).

      B.     Foreseeability

       Arena Holdings alternatively argues that even if we do not retreat from Dakota
Gasification's foreseeability approach, the economic loss doctrine does not bar
recovery because nothing about the specific accident itself was foreseeable, and there
was no evidence that the parties anticipated or negotiated about the possibility of such
an occurrence. We agree with the district court that the existence of the
indemnification and warranty clauses here inform the outcome in this case, although
that is not always true in each analysis. Arena Holdings would have us look at the
contractual clauses here to see if, in fact, the damage at issue is "covered" and that if
not, then these tort actions may proceed. However, this argument runs wholly
contrary to the very purpose of the economic loss doctrine.

      One basis for the economic loss doctrine is the resistance to the usurpation of
contract law by tort law. Clarys, 592 N.W.2d at 577. Followed to its logical
conclusion, Arena Holdings' argument would lead to contrary consequences. "The
availability of a tort remedy in a case such as this would encourage buyers like [Arena
Holdings] to forgo contractual protection in exchange for a lesser purchase price . . .
[and s]uch an approach would yield results that conflict with the economic loss
doctrine's very purpose." Travelers, 594 F.3d at 249; see also Dakota Gasification,
91 F.3d at 1100 ("A contrary holding would yield results that conflict with the
economic loss doctrine's purpose, as recognized by the North Dakota Supreme Court




                                          -9-
. . . [and a]llowing tort remedies in a case such as this would perversely encourage
contractors to 'bargain' for no warranty or insurance protection in exchange for a
reduced purchase price, because they could rely on tort remedies as their 'warranty.'").

       Evidence of bargaining or negotiation, or the lack thereof, is not necessarily
part of the foreseeability analysis. Yet, contrary to Arena Holdings' arguments, the
existence of indemnification and warranty clauses on these facts evinces an ability to
negotiate and to provide for the allocation of risk and the limitation of liability in this
very area, which supports the foreseeable approach discussed in Dakota Gasification.
Travelers, 594 F.3d at 249; see also Dakota Gasification, 91 F.3d at 1100 (noting that
the agreement entered into between the parties evinced an intent by the parties to
evaluate the risks and liabilities that potentially would follow if the materials failed
to perform and noted that the "language demonstrate[d] that the damage which
occurred here was well within the contemplation of the parties."). It was foreseeable
to the contracting parties that a defect in an amplifier or the sound system as a whole
could lead to fire and resulting damage. This was not beyond contemplation. Dakota
Gasification, 91 F.3d at 1099. Under the foreseeability analysis set out in Dakota
Gasification, these damages are thus not recoverable in tort. Id. at 1099-1101.

III.   CONCLUSION

    For the reasons discussed herein, we affirm the district court's grant of
summary judgment in this matter.

RILEY, Chief Judge, dissenting.

      Because (1) the North Dakota Supreme Court has approved tort recovery for
damage to “other property” and directed its state courts away from the foreseeability
approach we erroneously predicted twenty years ago in Dakota Gasification Co. v.
Pascoe Building Systems, 91 F.3d 1094 (8th Cir. 1996), and (2) even if Dakota

                                           -10-
Gasification states the relevant test, it would not control the facts of this case, I
dissent.3

I.     North Dakota Law
       “The economic loss doctrine recognizes the distinction between the bargain
expectation interests protected by contract law under the Uniform Commercial Code
and the safety interests protected by tort law.” Clarys v. Ford Motor Co., 592 N.W.2d
573, 578 (N.D. 1999). “‘[I]t prevents tort law from altering the allocation of costs
and risks negotiated by the parties’” by “‘den[ying] a remedy in tort to a party whose
complaint is rooted in disappointed contractual or commercial expectations.’”
Dannix Painting, LLC v. Sherwin-Williams Co., 732 F.3d 902, 906 (8th Cir. 2013)
(quoting Marvin Lumber & Cedar Co. v. PPG Indus., Inc., 223 F.3d 873, 882 (8th
Cir. 2000), and Mut. Serv. Cas. Ins. Co. v. Elizabeth State Bank, 265 F.3d 601, 615
(7th Cir. 2001)).

        In 1992, the North Dakota Supreme Court held, “[A] manufacturer of a
machine sold in a commercial transaction may not be held liable in negligence or
strict liability for economic loss caused by a failure of a component part of the
machine which causes damage to the machine only.” Coop. Power Ass’n v.
Westinghouse Elec. Corp., 493 N.W.2d 661, 667 (N.D. 1992). In doing so, the North
Dakota Supreme Court adopted the economic loss doctrine as announced in East
River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858 (1986), agreeing
with East River that the economic loss doctrine is necessary to preserve the
distinction between tort liability—which flows from the responsibility and capability
of a manufacturer to ensure the safety of its products—and contract liability—which
flows from “losses [that] essentially relate to the benefit of the bargain between

      3
       Under the principles of Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), it is
axiomatic that “[a]s a federal court, our role in diversity cases is to interpret state law,
not to fashion it” or “expand [it] in ways not foreshadowed by state precedent.”
Kingman v. Dillard’s, Inc., 643 F.3d 607, 615 (8th Cir. 2011) (quotations omitted).

                                           -11-
business entities.” Coop. Power, 493 N.W.2d at 664-65, 667. The court in
Cooperative Power recognized that because “the rules of negligence and strict
liability for damage to property other than the product itself and for personal injury
adequately protect [society’s] interest [in safe products] and provide manufacturers
with incentive to produce safe products,” economic loss to the product itself is
recoverable only under contract and warranty principles. Id. at 665.

       Four years later, we decided Dakota Gasification. “Although there [wa]s no
North Dakota case directly on point” deciding whether the economic loss doctrine
applied to property other than the product itself, we thought North Dakota would
follow “the modern trend in many jurisdictions . . . that tort remedies are unavailable
for property damage experienced by the owner where the damage was a foreseeable
result of a defect at the time the parties contractually determined their respective
exposure to risk, regardless whether the damage was to the ‘goods’ themselves or to
‘other property.’” Dakota Gasification, 91 F.3d at 1099. We thus extended North
Dakota’s economic loss doctrine and predicted the state’s supreme court would apply
the doctrine to all property damage that could foreseeably result from a defect rather
than rely upon a distinction between the purchased product and other property. See
id.

        The majority here perpetuates this flawed prediction because the North Dakota
Supreme Court has not directly contradicted Dakota Gasification. “While we are
loath to reject the considered judgment of a prior panel decision of our court, our task
is to apply state law.” Marvin Lumber, 223 F.3d at 883. Because it is not federal law
we apply, we must utilize all “‘relevant state precedent, analogous decisions,
considered dicta, and any other reliable data’” to anticipate how the state’s highest
court would decide this case. Ashley Cnty., Ark. v. Pfizer, Inc., 552 F.3d 659, 665
(8th Cir. 2009) (quoting In re W. Iowa Limestone, Inc., 538 F.3d 858, 866 (8th Cir.
2008)). We cannot blithely look past the North Dakota Supreme Court’s recent
statements by adhering to a prediction based on a decades-old legal landscape. See,

                                         -12-
e.g., Holden Farms, Inc. v. Hog Slat, Inc., 347 F.3d 1055, 1066-67 (8th Cir. 2003)
(giving a non-binding intermediate state court decision controlling weight over our
earlier panel decision given the absence of “data suggesting the [state] Supreme Court
would disagree with the” intermediate state court’s decision).

      A.     “Modern Trend” of Foreseeability
      The unstable foundation upon which we built our position in Dakota
Gasification has eroded over time. In Dakota Gasification, we relied primarily on a
“modern trend in many jurisdictions” which we found consistent with the general
rationale underlying Cooperative Power’s adoption of the economic loss doctrine.
See Dakota Gasification, 91 F.3d at 1099. Shortly after our decision, that trend lost
its momentum. In 1997, the United States Supreme Court explained that East
River—the primary authority for the North Dakota Supreme Court in Cooperative
Power—“held that an admiralty tort plaintiff cannot recover for the physical damage
the defective product causes to the ‘product itself’; but the plaintiff can recover for
physical damage the product causes to ‘other property.’” Saratoga Fishing Co. v.
J.M. Martinac & Co., 520 U.S. 875, 877 (1997) (emphasis added). The Supreme
Court rejected the idea that “tort recovery for damage to . . . other property” could be
precluded by “the mere possibility” that a product’s manufacturer and initial
purchaser could have negotiated a contract term apportioning potential loss for other
property. Id. at 882. Soon after, the American Law Institute published the
Restatement (Third) of Torts (Restatement), which employs an economic loss rule
permitting recovery in tort for “harm to . . . the plaintiff’s property other than the
defective product itself.” Restatement (Third) of Torts: Product Liability § 21(c)
(1998); see also id. cmt. e. Dakota Gasification’s “modern trend” stalled.

       The majority acknowledges the Restatement and Saratoga Fishing but
dismisses “Saratoga Fishing [a]s inapposite in the instant analysis primarily because
it does not construe North Dakota law . . . but rather was an admiralty case and thus
does not address the heart of the matter we now face.” Ante at 5-6. This distinction

                                         -13-
ignores (1) the Restatement (which obviously applies outside admiralty), and (2) the
fact that North Dakota derived its economic loss doctrine from East River, an
admiralty law case. See Coop. Power, 493 N.W.2d at 664-67. The majority accepts
Saratoga Fishing as “[a]pplying and building upon . . . East River,” ante at 5, the very
case North Dakota expressly followed. See Coop. Power, 493 N.W.2d at 667.

       The foreseeability approach’s earlier momentum, upon which we relied in
Dakota Gasification, has since dissipated against the contrary views of the economic
loss doctrine. See, e.g., 2-J Corp. v. Tice, 126 F.3d 539, 544 n.4 (3d Cir. 1997)
(noting the disagreement as to whether “the economic loss doctrine bars tort recovery
where the ‘other property’ damaged was always likely to have been injured upon the
failure of ‘the product’ itself” and finding “more persuasive” the cases rejecting “this
expansion of the economic loss doctrine”); Lesiak v. Cent. Valley Ag Coop., Inc., 808
N.W.2d 67, 84-85 (Neb. 2012) (per curiam) (rejecting the foreseeability approach
because it “precludes tort recovery based on the mere possibility that the parties could
have included a contract term dealing with the occurrence of the damage at issue”);
Grams v. Milk Prods., Inc., 699 N.W.2d 167, 180 (Wis. 2005) (Abrahamson, C.J.,
dissenting) (reasoning that with a foreseeability threshold, Wisconsin’s economic loss
doctrine has become “a swelling globule on the [state’s] legal landscape” akin to “the
ever-expanding, all-consuming alien life form portrayed in the 1958 B-movie classic
The Blob”).

      B.     Recent Statements by the North Dakota Supreme Court
      Since Dakota Gasification, the North Dakota Supreme Court unquestionably
has shown it adheres to the dichotomy between the product itself and other property.
In 1999, the North Dakota Supreme Court “consider[ed] for the first time whether the
economic loss doctrine should be applied to consumers” in addition to commercial
purchasers. Clarys, 592 N.W.2d at 575. The Clarys court found the economic loss
doctrine applied to consumer transactions, reasoning, “When a defective product
causes damage to itself, only the consumer’s product expectations are infringed, and

                                         -14-
those interests are protected under contract principles found within the remedies
provided by the U.C.C.” Id. at 576 (emphasis added). Throughout its discussion, the
Clarys court reaffirmed its agreement with East River and reiterated that contract
liability is for damage to “the product itself” while indicating tort liability is available
for damage to “other property.” Id. at 574-75, 577, 578-79. The court explained:

       When a defective product causes damage to persons or other property,
       the interest at stake is health and safety . . . . Those safety interests are
       protected under tort law, which allows recovery by injured plaintiffs
       against a seller or manufacturer of an unreasonably dangerous defective
       product. When, however, a product is defective and damages only itself,
       the interest at stake is the purchaser’s expectation of receiving the
       bargained-for product. That interest is protected by the remedies
       provided under Article 2 of the Uniform Commercial Code.

Id. at 578-79 (emphasis added) (citation omitted); see also id. at 577-78 (interpreting
North Dakota’s Tort Reform Act of 1993 to permit “tort actions . . . when a defective
product causes damage to persons or other property,” but not “when only the
defective product has been damaged”).

        The Clarys court expressly agreed with the drafters of the Restatement “that the
Uniform Commercial Code, not product liability tort law, governs actions of persons
seeking redress for damages when the injury is confined to the defective product
itself, and neither persons nor other property are damaged.” Id. at 578. In
announcing its agreement with the Restatement, the court emphasized that its
approach permits recovery in a product liability suit for harm to “‘property other than
the defective product itself,’” but not for harm “to the defective product itself.” Id.
(emphasis in original) (quoting Restatement (Third) of Torts: Product Liability
§ 21(c)).




                                           -15-
      Since Clarys, the North Dakota Supreme Court has only twice addressed the
economic loss doctrine, and in both instances, it reiterated the distinction between the
product itself and other damaged property. See Leno v. K & L Homes, Inc., 803
N.W.2d 543, 550 (N.D. 2011) (“[U]nder the economic loss doctrine in North Dakota,
‘economic loss resulting from damage to a defective product, as distinguished from
damage to other property or persons, may be recovered in a cause of action for breach
of warranty or contract, but not in a tort action.’” (quoting Steiner v. Ford Motor Co.,
606 N.W.2d 881, 884 (N.D. 2000))); Steiner, 606 N.W.2d at 884 (“‘[D]amage to
persons or other property . . . [is] protected under tort law.’” (quoting Clarys, 592
N.W.2d at 578)).

       The majority dismisses these indications of North Dakota law, disregarding the
discussion in Clarys as “dicta.” Ante at 6-7. However, the signals in Clarys are more
than just fleeting comments or unassuming word choices. The North Dakota Supreme
Court’s statements about “other property” represent an important part of the careful
weighing and molding that went into the court’s understanding and description of
how best to balance contract law with tort. “[C]onsidered dicta” such as this provides
crucial insight into the North Dakota Supreme Court’s thinking, Ashley Cnty., 552
F.3d at 665, particularly when that same court cites and repeats the point in later
cases, see, e.g., Leno, 803 N.W.2d at 550; Steiner, 606 N.W.2d at 884.

      The majority notes the North Dakota Supreme Court’s later cases do not
expressly “point[] to a rejection of the foreseeability approach” advanced in Dakota
Gasification. Ante at 7. While the majority may fit Dakota Gasification’s
foreseeability approach within portions of Clarys’s general discussion of the role and
underpinnings of the economic loss doctrine, the majority does not justify Dakota
Gasification’s outright disregard for the product/other property analysis in light of the
North Dakota Supreme Court’s recent decisions favoring such a distinction. Compare
Dakota Gasification, 91 F.3d at 1099, 1101 (applying its foreseeability rule to
preclude tort recovery “regardless whether the damage was to the ‘goods’ themselves

                                          -16-
or to ‘other property’” (emphasis added)), with Clarys, 592 N.W.2d at 578
(explaining tort law protects “damage to persons or other property”).

      I share the majority’s respect for our prior panel’s opinion. But time proved
our prediction wrong, and the prediction should now give way to our obligation to
apply North Dakota law in the way described by the highest court of that state. I
believe North Dakota would not ask whether the harm was foreseeable but whether
the harm occurred to “other property.”

II.    Foreseeability Under Dakota Gasification
       Even accepting Dakota Gasification’s test as controlling, that case does not
preclude Arena Holdings’s tort recovery under the summary judgment standard. See
Fed. R. Civ. P. 56(a) (requiring summary judgment only where “the movant shows
that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law”).

       As “‘the fundamental boundary between contract law . . . and tort law,’” Clarys,
592 N.W.2d at 576 (quoting Casa Clara Condo. Ass’n v. Charley Toppino & Sons,
Inc., 620 So. 2d 1244, 1246 (Fla. 1993)), the economic loss doctrine retains the
delicate task of balancing the competing policy interests of both areas of the
law—not just resisting “the usurpation of contract law by tort law,” ante at 9 (citing
Clarys, 592 N.W.2d at 577). The majority’s foreseeability analysis does not account
for the two primary circumstances that led the panel in Dakota Gasification to find
the harm in that case foreseeable. Both circumstances are noticeably absent here.

       First, in Dakota Gasification, the foreseeability inquiry was whether damage
to a plant and its contents was a foreseeable result of defects in “structural
components such as steel rafters, columns, and purlins,” which were used in building
the plant. Dakota Gasification, 91 F.3d at 1096-97, 1100. Such harm is nearly per
se foreseeable when the potential defect lies in the plant’s structural components

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because the components’ ability to hold up the building and protect its contents is the
primary motivation for purchasing such materials. Our discussion of foreseeability
in Dakota Gasification made special note of this fact on more than one occasion. See
id. at 1100 (reasoning, in discussing our adoption of the foreseeability approach, that
“it is difficult to imagine a scenario in which the natural consequence of an installed
structural component’s failure would be damage only to the structural component
itself without any damage to the surrounding property”); id. (assessing foreseeability
and analogizing the case to a Sixth Circuit decision because in both cases, “the
defective structural components caused great damage to surrounding property”). In
this case, it is not clear whether fire safety was a reason for purchasing Harman’s
amplifiers, and unlike the dangers of collapsing structural components, the bargained-
for function of an amplifier normally would not entail an inherent danger of
widespread fire damage and put these risks “within the scope of bargaining” as a
matter of law. Grams, 699 N.W.2d at 175.

      Second, in Dakota Gasification we looked to one other fact in assessing
foreseeability: A limitation of liability provision in the purchase contract for the steel
components stating, “SELLER SHALL NOT BE RESPONSIBLE FOR . . .
DAMAGES TO THE CONTENTS OR FURNISHINGS IN ANY BUILDING.”
Dakota Gasification, 91 F.3d at 1100. That contract specifically allocated the risk of
defects in the product harming the building’s furnishings and contents. See id.
(reasoning that “[t]his language demonstrates that the damage which occurred here
was well within the contemplation of the parties” (emphasis added)).

      But Harman relies on language declaring,

      YOU ARE NOT ENTITLED TO RECOVER FROM US . . . ANY
      DAMAGE TO ANOTHER PRODUCT OR PRODUCTS RESULTING
      FROM . . . A DEFECT [IN THE PURCHASED PRODUCT].



                                          -18-
This disclaimer acknowledges that an amplifier defect might damage “another
product,” but this statement is far too vague to give any sense that the fire and smoke
damage here was one of the allocated risks considered during the bargaining.

       Foreseeability of harm generally “is a question of fact for the jury, unless the
facts are such that reasonable minds could not differ.” Barsness v. Gen. Diesel &
Equip. Co., 383 N.W.2d 840, 843 (N.D. 1986); accord Haugenoe v. Workforce Safety
& Ins., 748 N.W.2d 378, 387 (N.D. 2008); see also Foremost Farms USA Coop. v.
Performance Process, Inc., 726 N.W.2d 289, 297 (Wis. Ct. App. 2006) (considering
foreseeability, as used in the economic loss doctrine, a “factual question”). In Dakota
Gasification, the structural nature of the defect made the resulting damage a practical
inevitability, a fact reflected by a limitation of liability clause specifically addressing
damage to the building’s furnishings and contents.

       Before granting summary judgment to Harman, I would require a similarly
undeniable indication of foreseeability. Harman’s evidence here—(1) the user
manual shipped with the amplifier, which referenced at one point the possibility of
speakers overheating and warned at another point against the increased risk of fire
should the amplifier be exposed to rain or moisture; (2) knowledge by the initial
purchasing subcontractor that amplifiers could (but rarely did) cause fires; and
(3) Arena Holdings’s implementation of technical fire-safety specifications for
contractors working on the arena project—is not so clear. On this evidence, the fire-
risk of an amplifier defect might be foreseeable enough to bring the risk within the
purview of the bargaining process, but that question is not beyond reasonable dispute
and thus should be left to a jury.

III.   Conclusion
       Because I disagree that Dakota Gasification governs, I would return this case
to the district court to address the economic loss doctrine under a dichotomy between
the product itself and other property. Even applying Dakota Gasification, I would

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still remand because there are material factual disputes precluding summary
judgment.
                     ______________________________




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