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Rossa v. Scientific Design Co.

decided: October 3, 1968.


McLaughlin, Forman and Freedman, Circuit Judges.

Author: Freedman


FREEDMAN, Circuit Judge.

This is a wrongful death and survival action*fn1 invoking the diversity of citizenship jurisdiction of the District Court of New Jersey. It presents for our decision important and difficult questions of New Jersey law.

Plaintiff's decedent was an employee of Witco Chemical Company, a manufacturer of chemical products. Defendant, Scientific Design Company, Inc., contracted with Witco to design, engineer and supervise the construction and initial operation of a new Witco plant for the manufacture of phthalic anhydride. One of the final steps in setting up the plant consisted of loading a catalyst in the form of pellets into a reactor. The loading was performed by employees of Witco, including decedent. Scientific Design supplied the pellets under the contract and was responsible for the supervision of the loading operation.*fn2 The pellets were manufactured by a subsidiary of Scientific Design and their exact chemical formula was a trade secret, but some executives of Witco were aware that vanadium was the active chemical agent in the coating of the pellets.

The loading operation generated dust from the vanadium coating and some of the men working on the operation, although supplied with dust respirator masks, suffered symptoms of a toxic reaction to the dust. About a month after his initial exposure to the dust decedent was found to have a growth in his throat which proved to be cancerous and ultimately caused his death. Plaintiff claims that the alleged carcinogenic properties of the vanadium dust either activated a latent condition or actually caused the cancer itself. Liability was asserted on two separate grounds. One was that Scientific Design was negligent in failing to provide adequate safety precautions and supervision in the loading of the vanadium pellets into the reactor. The other was that express and implied warranties that the process of installation would be safe arose from Scientific Design's contract with Witco and ran in favor of decedent.

At the close of a protracted jury trial the district court granted a motion to dismiss the counts on express and implied warranty but submitted to the jury the negligence counts, requiring it to determine whether Scientific Design was guilty of negligence and if so, whether such negligence was the proximate cause of decedent's cancerous condition and resulting death. The jury returned a verdict in favor of the defendant. Plaintiff appeals from the judgment, claiming that the trial court erred in granting defendant's motion to dismiss the warranty counts.

In the trial court plaintiff claimed that the loading process itself was unsafe rather than that the pellets were defective. She now argues that the pellets were defective because they were unreasonably dangerous. This claim was not pressed in the district court and is not supported by the record. In fact, at trial plaintiff's counsel expressly disavowed any claim that the pellets were defective and plaintiff's position rested on the claim that the decedent would have suffered no ill effects if the catalyst had been loaded under proper safeguards.

We turn first, then, to plaintiff's claim based on breach of express warranty. For this plaintiff relies on a number of provisions of the contract between Scientific Design and Witco. These provisions, which are set out below,*fn3 embody in substance Scientific Design's promise to perform its services in a workmanlike manner and to construct a plant suitable for its intended purpose. The promises as to performance, therefore, are limited to "good and workmanlike" execution and this indicates only the exercise of due care or the absence of negligence. It does not support an interpretation which would absolutely require safe performance under whatever circumstances might arise. On the claim of express warranty arising from the contract between Scientific Design and Witco there is, therefore, no basis for liability without proof of negligence.

Plaintiff's main argument, however, is that Scientific Design should be held liable on an implied warranty because in undertaking to perform services for Witco it impliedly warranted that it would insure the safety of all those who might be affected. We must, therefore, determine the extent of the development in New Jersey of the doctrine of strict liability which has grown out of the expanded principle of implied warranty in products liability cases and its applicability to the facts in this case. Our judgment necessarily must be speculative for there is no New Jersey decision expressly ruling a case such as this, which does not present the usual situation of a product mass produced for consumer use but instead involves professional engineering, design and construction services performed under contract for a large manufacturer.

New Jersey stands in the forefront of those states which have abandoned the need to stand in privity of contract and eliminated any requirement of proof of negligence in cases where a consumer has suffered injury in the use of a mass produced article. The New Jersey Supreme Court led the way in Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69, 75 A.L.R.2d 1 (1960), which held that the wife of the purchaser of a defective automobile was entitled to recover damages for personal injury from the dealer and the manufacturer although there was no showing of negligence and there was no privity of contract, and despite attempted limitations on the express warranties contained in the contract of sale. "In the field of products liability," says Professor Prosser, "the date of the fall of the citadel of privity * * *" is the date Henningsen was decided.*fn4

"What has followed [ Henningsen ]", we quote Prosser again, "has been the most rapid and altogether spectacular overturn of an established rule in the entire history of the law of torts."*fn5 In Henningsen the principle on which liability was made to rest was that an implied warranty existed which ran in favor of the wife of the purchaser of the automobile since she must have been within the anticipation of the parties when the automobile was sold to her husband.*fn6 In Santor v. A & M Karagheusian, Inc., 44 N.J. 52, 207 A.2d 305, 16 A.L.R.3d 670 (1965), the court in effect allowed the device of implied warranty to wither by recognizing that a manufacturer's liability is essentially one of strict liability in tort. The new doctrine was explicitly attributed to important considerations of public policy. The court said:

"In this developing field of the law, courts have necessarily been proceeding step by step in their search for a stable principle which can stand on its own base as a permanent part of the substantive law. The quest has found sound expression, we believe, in the doctrine of strict liability in tort. Such doctrine stems from the reality of the relationship between manufacturers of products and the consuming public to whom the products are offered for sale. As we indicated in Henningsen, the great mass of the purchasing public has neither adequate knowledge nor sufficient opportunity to determine if articles bought or used are defective. Obviously they must rely upon the skill, care and reputation of the maker. * * * It must be said, therefore, that when the manufacturer presents his goods to the public for sale he accompanies them with a representation that they are suitable and safe for the intended use. * * * The obligation of the manufacturer thus becomes what in justice it ought to be -- an enterprise liability, and one which should not depend on the intricacies of the law of sales."*fn7

Although the doctrine of strict tort liability of a manufacturer without proof of negligence has thus been recognized in New Jersey,*fn8 it still bears the imprint of its origin in contractual warranty.*fn9 In recent years the New Jersey cases have held the manufacturer liable, either under implied warranty*fn10 or strict liability in tort, for direct property loss,*fn11 as well as personal injury, and they also have extended liability to include implied warranty of fitness not only in sales of goods, but also in sales of real property*fn12 and bailments for hire.*fn13 The difference in the two concepts at times requires different treatment in elements other than liability, such ...

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