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KALIK v. ALLIS-CHALMERS CORP.

April 15, 1987

Ben Kalik and Frances Kalik, individually and Ben Kalik, t/d/b/a Swissvale Auto Surplus Parts Company, Plaintiffs
v.
Allis-Chalmers Corporation, Bethlehem Steel Corporation, Max Berman, Simon Brothers Company, Inc., Dravo Corporation, Duquesne Light, Keystone Resources, LTV Steel Company, Luria Brothers & Company, Inc., Robert Strellec, Union Railroad Company, United States Steel Corporation, Wagner Electric Company, Weirton Steel, Consolidated Coal Company, National Steel Corporation, Westinghouse Electric Corporation, General Electric Company, Sanford Steel Products, and Noralco Corporation, Defendants, v. Edward P. Green, The Kaiser-Nelson Steel & Salvage Corp., Marino Brothers, Inc., P. J. Greco & Sons, Inc., and Follansbee Steel Corporation, Defendants



The opinion of the court was delivered by: TEITELBAUM

 TEITELBAUM, U.S.D.J.

 This is an action by the owners of a site contaminated by hazardous substances against the manufacturers and suppliers of the products containing the hazardous substances to recover clean-up costs and damages under the Comprehensive Environmental Response Compensation and Liability Act of 1980 (CERCLA) and under state law.

 The action was brought by the Kaliks (para. 1.1, 1.2), *fn1" the owners of a site (para. 1.3) from which plaintiff Ben Kalik operated the Swissvale Auto Surplus Parts Company (SASPC) (para. 1.3-1.4), a scrap metal business. There are 27 defendants: 3 manufacturers of electrical components containing PCB's, a hazardous substance (para. 2.1, 2.11, 2.16), 23 suppliers of junk electrical components containing PCB's (para. 2.2-2.10, 2.12-2.14, 2.17-2.27), and 1 defendant which is both a manufacturer of electrical components containing PCB's and a supplier of junk electrical components containing PCB's (para. 2.15).

 The complaint makes the following allegations. Between 1970 and 1984 SASPC purchased junk electrical components for use as scrap (para. 6, 8). The junk electrical components contained PCB's, a hazardous substance (para. 9). During the course of storage, handling and dismantling of the junk electrical components, PCB contaminated oil spilled or leaked onto the site (para. 10). The combustion of PCB's under certain circumstances may produce dioxins, a highly toxic substance (para. 11). As a furnace was used in dismantling and processing the junk electrical components, dioxins polluted the site (para. 12). The United States Environmental Protection Agency (EPA) has spent $1.9 million to clean up the site (para. 15-16); the plaintiffs have spent $22,000 to remove PCB contaminated oil from the site (para. 17).

 Plaintiffs seek recovery of clean-up costs, damages for injuries to the site and to the business, and a declaration of rights. Federal jurisdiction over the manufacturer defendants is based on diversity of citizenship. Federal jurisdiction over the supplier defendants is based on CERCLA, 42 U.S.C. §§ 9601-57.

 Before the Court are motions to dismiss by General Electric Company (GE), Allis-Chalmers Corporation, Robert Strellac, Max Berman, and Edward P. Green.

 1. General Electric

 The complaint identifies GE as a manufacturer of electrical components containing PCB's. GE is named as a defendant in two counts: Count 1 sets forth a products liability claim under § 402A of the Restatement (2d) of Torts, Count 5 sets forth a claim for a negligent failure to warn. *fn2"

 a. failure to state a claim - reasonably foreseeable use

 GE moves to dismiss for failure to state a claim. GE's position derives from the fact that it manufactured new electrical components, but that SASPC dealt in junk electrical components. Based on these facts, GE makes a three part argument.

 First, GE argues that the plaintiffs are not within the class of persons protected under § 402A or the duty to warn. Specifically, GE contends that the allegations of the complaint that SASPC dealt in junk electrical components establishes as a matter of law that the plaintiffs are not "users" of the new electrical components manufactured by GE entitled to the protection of § 402A or to warnings.

 Second, GE argues that it is not a person subject to liability under § 402A. Specifically, GE contends that there are no allegations that it sold junk electrical components which would be necessary to impose liability under § 402A.

 Third, GE argues that its product has been substantially changed precluding liability under § 402A. Specifically, GE contends that there are no allegations that the new electrical components it manufactured were not substantially changed and, in fact, the allegations that SASPC dealt in junk electrical components suggest that GE's product was substantially changed, thereby precluding liability under § 402A.

 Although GE has framed its argument in three parts focusing on the persons protected, the persons subject to liability, and the product, these three parts can all be subsumed within the broader inquiry of whether plaintiff's use of defendant's product was reasonably foreseeable by ...


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