1999 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

8-18-1999

Port Auths. of NY & NJ v. Arcadian Corp.

Precedential or Non-Precedential:

Docket 98-5045

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Recommended Citation

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Filed August 18, 1999 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 98-5045 

PORT AUTHORITY OF NEW YORK AND NEW JERSEY, 

 Appellant 

v. 

ARCADIAN CORP; 

DYNO NOBEL INC, f/k/a 

*Ireco Incorporated; 

HYDRO AGRI NORTH AMERICA, INC. 

 (*Amended per clerk's 

 order of 2/20/98) 

On Appeal from the United States District Court 

for the District of New Jersey 

(D.C. Civil Action No. 96-cv-01635) 

District Judge: Honorable William G. Bassler 

Argued September 17, 1998 

Before: ROTH and STAPLEON, 

Circuit Judges HOEVELER,1 District Judge 

(Opinion Filed: August 18, 1999) 

_________________________________________________________________ 

1. Honorable William M. Hoeveler, United States District Court Judge for 

the Southern District of Florida, sitting by designation. 
 William B. McGuire, Esquire 

 (Argued) 

 Marianne Espinosa Murphy, Esquire 

 George G. Campion, Esquire 

 Tompkins, McGuire & Wachenfeld 

 100 Mulberry Street, Gateway Four 

 Newark, NJ 07102 

 Samuel J. Pace, Jr., Esquire 

 (Argued) 

 Leslie M. Cyr, Esquire 

 Dugan, Brinkmann, Maginnis & 

 Pace 

 1880 John F. Kennedy Boulevard, 

 14th Floor 

 Philadelphia, PA 19103 

 Attorneys for Appellant 

 Richard D. Shapiro, Esquire 

 Hellring, Lindeman, Goldstein & 

 Siegal 

 One Gateway Center, 8th Floor 

 Newark, NJ 07102 

 Philip T. Bruns, Esquire 

 Jennifer Horan Greer, Esquire 

 Andrew L. Pickens, Esquire 

 Gibbs & Bruns, L.L.P. 

 1100 Louisiana, Suite 5300 

 Houston, TX 77002 

 Attorneys for Appellee 

 Arcadian Corporation 

 Andrew T. Berry, Esquire 

 Kevin J. Connell, Esquire 

 McCarter & English 

 100 Mulberry Street, Four Gatewary 

 Center 

 Newark, NJ 07101-0652 

 2 
 John T. Montgomery, Esquire 

 (Argued) 

 Michael P. Allen, Esquire 

 Douglas Hallward-Driemeier, Esquire 

 Ropes & Gray 

 One International Place 

 Boston, MA 02110-2624 

 Attorneys for Appellee 

 Hydro Agri North America, Inc. 

 Peter N. Perretti, Jr., Esquire 

 Glenn A. Clark, Esquire 

 Riker, Danzig, Scherer, Hyland & 

 Perretti 

 One Speedwell Avenue 

 Morristown, NJ 07962-1981 

 Attorneys for Appellee 

 Dyno Nobel Inc. 

OPINION OF THE COURT 

ROTH, Circuit Judge: 

This case arises from the February 26, 1993, terrorist 

detonation of an explosive device under the World Trade 

Center in New York City, which caused six deaths, many 

injuries and massive property damage. Plaintiff-appellant, 

the Port Authority of New York and New Jersey, owner of 

the World Trade Center, sued defendants, manufacturers of 

fertilizer products, on theories of negligence and products 

liability, alleging that the terrorists used defendants' 

fertilizer products to construct the explosive device. 

The District Court, in a thorough and well-reasoned

opinion, granted defendants' motion to dismiss for failure to 

state a claim upon which relief may be granted under Fed. 

R. Civ. P. 12(b)(6). Plaintiff appealed. We find that it was 

appropriate, in light of the record, for the District Court to 

dismiss the action under Rule 12(b)(6). Specifically, we 

agree with the District Court that as a matter of law 

defendants owed no duty to plaintiff and that the World 

 3 
Trade Center bombing was not proximately caused by 

defendants' actions. Furthermore, we reject plaintiff's 

argument that the issues of duty and proximate causation 

were jury issues not properly decided by the court on a 

Rule 12(b)(6) motion. Accordingly, we will affirm the 

judgment of the District Court. 

I. Factual and Procedural History 

A. Factual Background 

The Port Authority of New York and New Jersey is the 

owner of the World Trade Center in New York City. On 

February 26, 1993, a bomb, which had been fabricated by 

terrorists out of ammonium nitrate, urea, and nitric acid, 

exploded in an underground parking garage at the World 

Trade Center, causing six deaths, many injuries and

massive property damage. 

The ammonium nitrate, urea, and nitric acid used in the 

bomb were allegedly sold in New Jersey, and the bomb was 

allegedly assembled in New Jersey by New Jersey residents. 

Defendants Hydro-Agri North America, Inc., and Dyno

Nobel Inc., formerly known as Ireco, Inc., are alleged to 

have manufactured, designed, marketed, distributed 

and/or sold the ammonium nitrate used by the terrorists. 

Defendant Arcadian Corporation is alleged to have 

manufactured, designed, marketed, distributed and/or sold 

the urea used by the terrorists. 

The ammonium nitrate and urea, alleged to have been

purchased by the terrorists, were sold in prill form, i.e., a 

white, round, hardened droplet about the size of the tip of 

a ball point pen. The prills were manufactured to be used 

as fertilizer. The ammonium nitrate prills can be rendered 

explosive by the addition of fuel oil or other sensitizing 

substances; the urea prills can be rendered explosive by the 

addition of nitric acid and water (forming urea nitrate). The 

terrorists are alleged to have rendered the prills explosive 

by adding these substances. Defendants point out that, as 

conceded in the Amended Complaint, the prills are not 

explosive in and of themselves. 

Plaintiff alleges that defendants knew or should have 

known that the ammonium nitrate and urea could easily be 

 4 
made into explosives and that terrorists had used them 

prior to the bombing at the World Trade Center, but

nevertheless defendants failed to take appropriate steps to 

render their products non-detonable. Specifically, plaintiff 

points to two incidents. First, an explosion of ammonium 

nitrate over fifty years ago destroyed two ships docked at 

Texas City, Texas, killing 468 persons and causing 

extensive damage in the city. Second, more than thirty 

years ago, anti-war protesters used ammonium nitrate to 

bomb the Mathematics Research Building at the University 

of Wisconsin, leading to injuries, death and property 

damage. 

Plaintiff alleges that defendants had the means to reduce 

the danger of their products. In 1968, Samuel Porter 

patented a process that rendered ammonium nitrate 

fertilizers non-detonable. The process called for adding five 

to ten percent of diammonium phosphate, a high grade of 

fertilizer, to ammonium nitrate at a nominal additional 

cost. When the patent was made available to ammonium 

nitrate manufacturers, one of the explicit purposes was to 

deter the criminal use of ammonium nitrate in bombs. In 

1985, the Porter patent entered the public domain, making 

the process available to all manufacturers free of license or 

royalty. 

Plaintiff alleges that the danger of these products

prompted governments here and abroad to attempt to 

regulate their manufacture and distribution. Specifically, in 

response to the University of Wisconsin bombing, several 

states introduced legislation to require that all ammonium 

fertilizers be desensitized by a chemical agent (as described 

in the Porter patent) to reduce, if not eliminate, the 

explosive properties of ammonium nitrate. The legislative 

efforts were allegedly well publicized, including within the 

fertilizer industry, but plaintiff asserts that various fertilizer 

manufacturers resisted the legislation, leading to its 

ultimate defeat. 

In addition, in 1975, the European Economic Community 

Council issued a directive that established (1) strict 

standards for the formulation of solid ammonium nitrate 

and (2) detonation tests that could be required by member 

countries to ensure that fertilizer sold in those countries 

 5 
had a low potential for use as explosive. Belgium, Denmark, 

Germany and the Netherlands prohibited the sale of certain 

ammonium nitrate fertilizers. France mandated that all 

ammonium nitrate fertilizer be tested by detonation. 

Three years prior to the EEC directive, terrorist bombings 

in Northern Ireland and the Republic of Ireland prompted 

the United Kingdom and Ireland to enact regulations that 

were even more stringent. Those regulations limited the 

amount of nitrate that could be used in fertilizer products 

and required the addition of calcium, sulfates, and other 

materials to reduce their detonability. 

Information about urea and the means to desensitize it 

was allegedly similarly well known, yet not utilized, prior to 

the World Trade Center bombing. It was allegedly known 

that the addition of phosphate and other additives to urea 

prills would decrease or eliminate their use as explosive 

and energetic materials. Explosives made of urea nitrate 

were allegedly used in the Middle East, South America, 

Pakistan and the United States prior to the World Trade 

Center bombing. In 1992, the sales of urea and ammonium 

nitrate fertilizer were banned in Peru as a result of the 

extensive use of urea and ammonium nitrate prills in 

explosives set off by the Shining Path terrorists. 

B. Procedural Background 

Plaintiff filed this action on February 26, 1996, in the 

Superior Court of New Jersey in Essex County. Defendants 

removed the actions to the United States District Court for 

the District of New Jersey on the grounds of diversity of 

citizenship. Plaintiff filed an Amended Complaint before 

defendants responded to the original Complaint, in order to 

correct the name of one of the defendants. 

The Amended Complaint asserts three grounds for 

holding defendants liable. Count I, a claim of negligence, 

asserts that defendants "negligently failed to design, 

manufacture, market, distribute and/or sell [ammonium 

nitrate or urea prills] with a formulation" that would either 

"render them less detonable or non-detonable" or "decrease 

or eliminate their explosive properties." Count II, a claim in 

strict liability, asserts that defendants are liable because 

the ammonium nitrate and urea prills were "unreasonably 

 6 
dangerous and defective when they left the respective 

control of each of the Defendants." Count III asserts that 

defendants are liable because they "failed to provide 

guidelines, instructions, and/or warnings to their 

distributors, retailers, dealers or other suppliers to confirm 

that buyers in the general and unrestricted public market 

have legitimate and lawful purposes for use of Defendants' 

products." 

Defendants filed a Motion to Dismiss pursuant to Fed. R. 

Civ. P. 12(b)(6). The District Court granted the motion and 

dismissed the Complaint with prejudice. See Port Authority 

of New York & New Jersey v. Arcadian Corp., 991 F. Supp. 

390 (D.N.J. 1997). Plaintiff filed a timely appeal.

II. Analysis 

A. Standard of Review 

The standard of review of a district court order 

dismissing a complaint under Fed. R. Civ. P. 12 (b)(6) is 

plenary. Alexander v. Whitman, 114 F.3d 1392, 1397 (3d 

Cir. 1997). The court "must determine if plaintiff may be 

entitled to relief under any reasonable reading of the 

pleadings, assuming the truth of all the factual allegations 

in the complaint." Id. (citations omitted). "A court may 

dismiss a complaint only if it is clear that no relief could be 

granted under any set of facts that could be proven

consistent with the allegations." Id. 

B. Jurisdiction 

The District Court had diversity jurisdiction pursuant to 

28 U.S.C. S 1332. Because this is an appeal from a final 

order of the District Court, we have jurisdiction pursuant to 

28 U.S.C. S 1291. 

C. Choice of Law 

As an initial matter, the District Court found it was not 

necessary to make a determination whether New York or 

New Jersey law applies to the Amended Complaint. Instead, 

the District Court determined that the Amended Complaint 

failed to state a claim under the law of either state. The 

District Court's approach was appropriate. A federal court 

 7 
sitting in diversity applies the choice of law principles of the 

forum state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 

487, 496-97 (1941). Under New Jersey law, when the same 

result -- dismissal of a complaint -- is required under the 

laws of all relevant jurisdictions, the court need not decide 

which law would apply to the action. See Rohm & Haas Co. 

v. Adco Chem. Co., 689 F.2d 424, 429 (3d Cir. 1982); 

Mueller v. Parke-Davis, 599 A.2d 950, 954 (N.J. Super. Ct. 

App. Div. 1991). Because we agree that dismissal is

required under both New Jersey and New York law, we

similarly need not decide the choice of law issue. 

D. The District Court's Application of Fed. R. Civ. P. 

12(b)(6) 

We first address plaintiff's argument that the District 

Court erred in failing to recognize the legal sufficiency of 

the Amended Complaint pursuant to Fed. R. Civ. P. 

12(b)(6). Plaintiff argues that, although the District Court 

quoted the correct standard under Rule 12(b)(6), it

misapplied it to the case. In essence, plaintiff contends that 

the Amended Complaint alleges facts sufficient to plead the 

elements of the causes of action (under either jurisdiction) 

but that the District Court elected to conclude that a jury 

could not rule in favor of plaintiff under any set of facts 

consistent with the Amended Complaint. Plaintiff argues 

that this ruling was premature and inconsistent with the 

mandate that the District Court must interpret allegations 

in the light most favorable to the plaintiff. Plaintiff argues 

that, in dismissing the complaint, the District Court made 

rulings on factual issues of foreseeability and proximate 

cause, which are traditionally the province of the jury. In 

sum, plaintiff claims that the District Court exceeded its 

limited role in reviewing the sufficiency of a complaint and 

that plaintiff is entitled to discovery and to present evidence 

to a jury because the allegations in the Amended Complaint 

are sufficient. 

We find, however, that the District Court applied the 

standard correctly. Thus, the District Court assumed that 

the facts alleged in the Amended Complaint were true but 

determined that the facts, even if true, could not legally 

support plaintiff's claims. Plaintiff disagrees with this 

conclusion in two respects. First, plaintiff contends that the 

 8 
District Court's task was merely to go through a check list 

for the elements of a tort claim. Consequently, since the 

Amended Complaint contained all the elements of the

causes of action pled, the motion to dismiss should have 

been denied. Rule 12(b)(6), however, is designed to screen 

out cases where "a complaint states a claim based upon a 

wrong for which there is clearly no remedy, or a claim 

which the plaintiff is without right or power to assert and 

for which no relief could possibly be granted . . .." MeloSonics Corp. v. Cropp, 342 F.2d 856, 859 (3d Cir. 1965) 

(quoting Leiman v. State Mutual Life Assurance Co., 108 

F.2d 302, 305-06 (8th Cir. 1940)). We find that the District 

Court carried out this mandate by taking all the allegations 

in the Amended Complaint as true and making every 

favorable inference in favor of plaintiff but deciding 

nevertheless that no relief could be granted.2 

Second, we disagree with plaintiff's insistence that the 

District Court misapplied Rule 12(b)(6) by considering 

whether plaintiff's claims were sufficient as a matter of 

"fairness" or "sound policy." Plaintiff argues that such 

considerations improperly substituted the court's views for 

those of the jury. Plaintiff, however, misunderstands the 

role of the courts in developing and administering the tort 

system. Tort law is essentially concerned with the 

"allocation of losses" arising out of "socially unreasonable 

conduct." Prosser & Keeton, The Law of Torts,S 1 at 6. The 

courts must consider not only the interests of the litigants 

but also the interests of society in general, including the 

social and economic costs of any expansion of the outer 

boundaries of tort liability. Id. This consideration 

_________________________________________________________________ 

2. Plaintiff argues that District Court Judge Bassler indicated during 

oral 

argument that he believed that plaintiff would prevail if the case was 

presented to a jury. "Then at the end, I mean, I can't believe a jury not 

bringing recovery on the facts of this case." App. 172a, T30-23. This 

quote is taken out of context. Judge Bassler was asking counsel whether 

judicial economy would be served by having a Third Circuit opinion on 

the issue before investing tremendous resources and going to trial. In 

other words, the judge was speculating that a jury would probably find 

for plaintiff on the facts of the case at trial. He was not indicating 

that 

he believed a legal basis existed for it to do so. And in dismissing the 

case, he ruled as a matter of law that recovery was precluded. 

 9 
necessarily involves considerations of social and public 

policy. Id. 

As we will explore more fully below, the legal bounds of 

duty and of proximate cause are aspects of tort law in 

which issues of fairness and public policy are particularly 

relevant. We conclude that the District Court properly 

considered questions of fairness and policy and made 

rulings of law on issues of reasonable foreseeability and 

proximate causation. Moreover, a jury would be asked to 

determine if a duty had been violated or if the harm in 

question had been proximately caused by the defendants 

only after the court had determined as a matter of law 

either that defendants did have a duty to safeguard plaintiff 

from the risk of these bombs or that the defendants' 

supplying the terrorists with a component of these bombs 

was a legal proximate cause of plaintiff's damages. Because 

the District Court found as a matter of law that there was 

no duty and no proximate causation, there was nothing for 

a jury to consider. 

E. Duty 

The District Court properly concluded that the Amended 

Complaint failed to establish the existence of a duty owed 

by defendants. Under both New Jersey and New York law, 

the question of whether a duty is owed is a question of law 

to be decided by the court. Strachan v. John F. Kennedy 

Mem'l Hosp., 538 A.2d 346, 349 (N.J. 1988) ("The question 

of whether a duty exists is a matter of law properly decided 

by the court. . . ."); Purdy v. Public Adm'r , 526 N.E.2d 4, 6 

(N.Y. 1988) ("The question of whether a member or group of 

society owes a duty of care to reasonably avoid injury to 

another is of course a question of law for the courts."). 

Under the law of either jurisdiction, it is appropriate for 

us to focus on product liability principles in determining if 

defendants did owe plaintiff a duty. Under New Jersey law 

negligence is no longer viable as a separate claim for harm 

caused by a defective product. Oquendo v. Bettcher Indus., 

Inc., 939 F. Supp. 357, 361 (D.N.J. 1996) (citing Tirrell v. 

Navistar Int'l, Inc., 591 A.2d 643 (N.J. Super. Ct. App. Div. 

1991)). Even though plaintiff alleges a negligence claim in 

Count I, this count is based solely on harm caused by 

 10 
defendants' allegedly defective products. It therefore falls 

within the New Jersey Product Liability Act (the"NJPLA"), 

N.J.S.A. 2A:58C-1 et seq., which is "the sole basis of relief 

under New Jersey law available to consumers injured by a 

defective product." Repola v. Morbark Indus., Inc., 934 F.2d 

483, 492 (3d Cir. 1991). Similarly, under New York law, 

theories of negligence and strict liability for design and 

warning defects are functionally equivalent. Elsroth v. 

Johnson & Johnson, 700 F. Supp. 151, 158 n.9 (S.D.N.Y. 

1988) (citing DeRosa v. Remington Arms Co., 509 F. Supp. 

762, 766 (E.D.N.Y. 1981), and Cooley v. Carter-Wallace, 

Inc., 478 N.Y.S.2d 375, 379 (App. Div. 1984)). A"plaintiff 

can recover nothing in negligence on his products claims 

that he cannot first recover under his strict liability claims 

asserting product, design, and warning defects." Id. at 158. 

We find that defendants owed no duty to plaintiff under 

either New Jersey or New York law. First, the manufacturer 

of a raw material or component part that is not itself 

dangerous has no legal duty to prevent a buyer from

incorporating the material or the part into another device 

that is or may be dangerous. By plaintiff's own allegations, 

defendants' products were not in and of themselves 

dangerous but were merely the raw materials or 

components that terrorists used in combination with other 

ingredients to build a bomb. Second, manufacturers have 

no duty to prevent a criminal misuse of their products 

which is entirely foreign to the purpose for which the 

product was intended. 

The New Jersey Supreme Court examined the duties of a 

component manufacturer in Zaza v. Marquess & Nell, Inc., 

675 A.2d 620 (N.J. 1996). In that case, the plaintiff was 

injured when hot water and carbon overflowed from a

quench tank he was attempting to unclog. The quench tank 

was a component part of a coffee bean decaffeination 

process. The defendant, who had manufactured the quench 

tank, knew from designs that, once integrated into the 

larger system, the tank would need certain safety devices. 

Nevertheless, the New Jersey Supreme Court held that the 

component part manufacturer owed the plaintiff no duty 

regarding any danger posed by the integrated device, 

stating that a component part fabricator may only be held 

 11 
"strictly liable for injury caused by a defective component 

where the defect is in the component part and the part did 

not undergo substantial change after leaving the 

manufacturer's hands." Id. at 636.3 The court relied on a 

tentative draft of the Restatement (Third) of Torts, in which 

the American Law Institute "concluded that a component 

part manufacturer generally is not liable unless the 

component part is defective or the component provider 

substantially participated in the design of thefinal 

product." Id. at 629. The court also followed the "majority 

of courts from other jurisdictions [which] have held that a 

manufacturer of a component part, which is not dangerous 

until it is integrated by the owner into a larger system, 

cannot be held strictly liable to an injured employee for the 

failure of the owner and/or assembler to install safety 

devices." Id. 

In the instant case, there is no allegation that the 

_________________________________________________________________ 

3. We disagree with the District Court's conclusion that New Jersey has 

rejected the component part doctrine. See Port Authority, 991 F. Supp. at 

400. The District Court relied on Zaza's reference to Michalko v. Cooke 

Color & Chem. Corp., 451 A.2d 179 (N.J. 1982), in which the court had 

held that a manufacturer of a component party must add a safety device 

if it is feasible. The court in Zaza, however, explained that "[a] further 

requirement for the imposition of strict liability on a component part 

fabricator is that the component part reach the user without substantial 

change. Where a component part is subject to further processing, or 

where the causing of the injury is not directly attributable to any defect 

in the component part, the fabricator is typically not subject to strict 

liability." Zaza, 675 A.2d at 629 (citation omitted). By contrast, in 

Michalko, the court held that there was no substantial change to the 

defendant's product, because its defect (the failure to add a safety 

device) 

was "untouched and remained unaffected by" the subsequent work on 

the machine. Michalko, 451 A.2d at 186. In the instant case, it is 

undisputed that the fertilizer products underwent substantial change 

after leaving defendants' hands. 

The two other cases relied on by the District Court did not involve raw 

materials or component parts, but rather, purchasers who had removed 

safety devices from the defendants' finished products. See Port Authority, 

991 F. Supp. at 400 (citing Oquendo, 939 F. Supp. at 362 (removal of 

point-of-operation guard and rewiring to bypass interlock mechanism); 

and Brown v. United States Stove Co., 484 A.2d 1234, 1239-41 (N.J. 

1984) (purchaser removed safety valves from space heater)). 

 12 
fertilizer products were dangerous in and of themselves. 

Under plaintiff's own allegations, the raw ammonium

nitrate and urea sold by defendants were not explosive until 

the terrorists purposefully manipulated and adulterated 

them by mixing them together with additional chemicals 

such that they were transformed into energized materials 

that could be incorporated into an explosive charge. The 

danger to plaintiff was presented not by the raw materials, 

but by a bomb that incorporated the raw materials after 

they had been substantially altered. In addition, defendants 

had no control over the fertilizer once it was sold and no 

control over the final assembly of the bomb. 

Moreover, under the NJPLA, a plaintiff must prove"that 

the product causing the harm was not reasonablyfit,

suitable or safe for its intended purpose." N.J.S.A. 2A:58C2 (emphasis added); see also Zaza, 675 A.2d at 627 (stating 

that a "manufacturer has a duty to ensure that the 

products its places into the stream of commerce are safe 

when used for their intended purposes"). The 

"unforeseeable misuse of a product may not give rise to 

strict liability." Suter v. San Angelo Foundry and Mach. Co., 

406 A.2d 140, 144 (N.J. 1979). "A product is not in a 

defective condition when it is safe for normal consumption 

and handling." Id. (quoting Restatement (Second) of Torts, 

S 402A cmt. h). Where "the use of the product is beyond its 

intended or reasonably anticipated scope," an injury 

resulting from that use is "not . . . probative of whether the 

product was fit, suitable, and safe." Id. There is no 

allegation here that the fertilizer products were unsafe for 

their intended purposes, that is, when used as fertilizer. 

Plaintiff attempts to argue that defendants should be 

liable nonetheless because the New Jersey courts have held 

that a manufacturer's duty also encompasses objectively 

foreseeable misuses and alterations. See Oquendo, 939 F. 

Supp. at 362 (D.N.J. 1996) ("New Jersey courts have held 

manufacturers strictly liable for products, despite another's 

subsequent substantial alterations, where those alterations 

were objectively foreseeable and likely to cause injuries."); 

Jurado v. Western Gear Works, 619 A.2d 1312, 1317 (N.J. 

1993) ("Hence, the plaintiff in a design-defect products 

liability suit may succeed even if the product was misused, 

 13 
as long as the misuse or alteration was objectively

foreseeable."); Soler v. Castmaster, 484 A.2d 1225, 1232 

(N.J. 1984) ("Thus, in the event of either a substantial 

alteration or misuse, the manufacturer will be responsible 

for resultant injuries to an operator if the alteration or 

misuse implicated in the actual use of the machine was 

foreseeable and could have been prevented or reduced by 

the manufacturer."). 

We conclude, however, that the alteration and misuse of 

defendants' fertilizer products were not objectively 

foreseeable. We reject, therefore, plaintiff's attempt to hold 

defendants liable under this theory. The court in Oquendo 

set forth New Jersey law as follows: 

 Objective foreseeability means reasonable 

 foreseeability. The standard "does not affix

 responsibility for future events that are only 

 theoretically, remotely, or just possibly foreseeable, or 

 even simply subjectively foreseen by a particular 

 manufacturer." . . . Rather it "applies to those future 

 occurrences that, in light of the general experience 

 within the industry when the product was 

 manufactured, objectively and reasonably could have 

 been anticipated." 

Oquendo, 939 F. Supp. at 362 (quoting Brown v. United 

States Stove Co., 484 A.2d 1234, 1241 (N.J. 1984)).

Significantly, the fact that plaintiff alleges that defendants 

were aware of previous instances in which fertilizer 

products were used in bombs does not suffice to establish 

objective foreseeability. "Such knowledge . . . tends to show 

only subjective foreseeability, and . . . subjective 

foreseeability is irrelevant to the [objective] foreseeability 

determination." Id. at 363. 

Plaintiff argued below, and again on appeal, that the 

issues of objective foreseeability and reasonableness should 

be left for a jury to decide. We recognize that these issues 

are indeed generally a matter to be determined by a jury. 

See Soler, 484 A.2d at 1234. An exception is to be made, 

however, where "the inferences are so clear that a court can 

say as a matter of law that a reasonable manufacturer 

could not have foreseen the change." Id. (quoting 

 14 
parenthetically Merriweather v. E.W. Bliss Co. , 636 F.2d 42, 

45 (3d Cir. 1980) (quoting D'Antona v. Hampton Grinding 

Wheel Co., 310 A.2d 307 (Pa. Super. Ct. 1973)). 

The inferences in this case are indeed so clear that we 

can say as a matter of law that the transformation and 

integration of the otherwise safe fertilizer products into the 

type of explosive device used in the World Trade Center 

bombing was not objectively foreseeable to the defendants 

at the time of this bombing. We agree with the District 

Court's conclusion that: 

 No jury could reasonably could conclude that one 

 accidental explosion 50 years ago, one terrorist act in 

 this country almost 30 years ago, and scattered 

 terrorists incidents throughout the world over the 

 course of the last 30 years would make an incident like 

 the World Trade Center bombing anything more than a 

 remote or theoretical possibility. 

Port Authority of New York & New Jersey, 991 F. Supp. at 

402-03. 

We, of course, must follow the precedents of the New 

Jersey Supreme Court. Travelers Indemnity Co. v. DiBartolo, 

131 F.3d 343, 348 (3d Cir. 1997). The District Court's 

conclusion is consistent with the refusal of the New Jersey 

Supreme Court to impose a duty in cases involving 

outrageous misuses of a product wholly unrelated to its 

intended purpose, where such a duty would expose 

manufacturers to endless liability. See, e.g. , Jurado, 619 

A.2d at 1318 ("If . . . a plaintiff undertakes to use his power 

saw as a nail clipper and thereby snips his digits, he will 

not be heard to complain. . . .") (citation omitted); Suter, 

406 A.2d at 144 ("[T]he manufacturer of a knife cannot be 

charged with strict liability when the knife is used as a 

toothpick and the user complains because the sharp edge 

cuts."); see also Taylor v. General Elec. Co., 505 A.2d 190, 

193 (N.J. Super. Ct. App. Div. 1986) (holding that bleach 

manufacturer had no duty to warn against using plastic 

Clorox bottles to carry gasoline because such a duty would 

cover an infinite variety of misuses). 

We agree with the District Court that imposing a duty on 

defendants in this case would be unfair. "Ultimately, the 

 15 
determination of the existence of a duty is a question of 

fairness and public policy. Foreseeability of injury to 

another is important, but not dispositive. Fairness, not 

foreseeability alone, is the test." Kuzmicz v. Ivy Hill Park 

Apartments, Inc., 688 A.2d 1018, 1020 (N.J. 1997). Indeed, 

it would be grossly unfair to impose a duty on defendants 

to anticipate and prevent the use of their products as one 

part of a terrorist's explosive device. Their products were 

not explosive in and of themselves, without being mixed 

with other substances and incorporated into a bomb.

Finally, imposing a duty in this case would expand the 

scope of manufacturers' liability under New Jersey law, a 

result contrary to the legislative policy of the NJPLA, which 

"has been interpreted as evincing a legislative policy to limit 

the expansion of products-liability law." Zaza, 675 A.2d at 

627 (internal quote marks omitted). We leave such an 

expansion of duty to the legislature. 

Similarly, under New York law, we find that no duty

exists that would provide a basis for liability. The 

manufacturer of a component part is not liable for the ways 

in which a purchaser subsequently processes or integrates 

that product. In Munger v. Heider Mfg. Corp., 456 N.Y.S.2d 

271, 273 (App. Div. 1982), the court held that 

manufacturers of component parts, not themselves 

defectively designed, could not be liable to one injured by 

the malfunction of the assembled unit. Indeed, under New 

York law, a manufacturer is not liable where its product 

became dangerous only due to substantial alteration even 

if the product is not a component part or raw material. In 

Robinson v. Reed-Prentice Div. of Package Mach. Co., 403 

N.E.2d 440, 441 (N.Y. 1980), the New York Court of 

Appeals held that "a manufacturer of a product may not be 

cast in damages, either on a strict products liability or 

negligence cause of action, where, after the product leaves 

the possession and control of the manufacturer, there is a 

subsequent modification which substantially alters the 

product and is the proximate cause of plaintiff's injuries." 

In Robinson, the court rejected the plaintiff's attempt to 

hold a machine manufacturer liable for an injury caused 

because safety guards were removed, saying "[m]aterial 

alterations at the hands of a third party which work a 

 16 
substantial change in the condition in which the product 

was sold . . . are not within the ambit of the manufacturer's 

responsibility." Id. at 444. 

Another New York case, Elsroth v. Johnson & Johnson, 

700 F. Supp. 151 (S.D.N.Y. 1988), also establishes that a 

manufacturer cannot be held liable for failing to add a 

safety device to its product to prevent other substances 

from being combined with it. In that case, an individual 

laced Tylenol capsules with cyanide and replaced the 

deadly product on store shelves, causing a consumer to die 

after ingesting the capsules. Id. at 153-54. Thus, like the 

instant case, Elsroth concerned a criminal who injured a 

victim by adulterating the defendant's product. The plaintiff 

alleged that the manufacturer could have prevented the 

death by producing the drug in caplet form, which would 

have made it more difficult for a criminal to adulterate the 

product. Id. at 160, 163. The court rejected this argument, 

holding that "there exists no common law duty requiring . 

. . manufacturers to design their product in such a way as 

to anticipate and frustrate criminal tampering." Id. at 164. 

This limiting principle is not altered even if the misuse of 

the product might be foreseeable. In Elsroth, the 

defendant's product had been tampered with in the same 

way four years earlier. Id. at 153. Similarly, in Robinson, 

the court concluded that the machine manufacturer had no 

duty to prevent disengagement of a safety device"however 

foreseeable that modification may have been." Robinson, 

403 N.E.2d at 444; see also McCarthy v. Sturm, Ruger, and 

Co., 916 F. Supp. 366, 369 (S.D.N.Y. 1996) (holding as a 

matter of law that defendant, a manufacturer of 

ammunition, owed no duty to prevent the criminal misuse 

of ammunition, regardless of its foreseeability). 

On appeal, plaintiff attempts to distinguish these New 

York cases on their facts but fails to provide any reason 

why the principles and rules articulated in them are 

inapplicable to this case. Plaintiff relies exclusively on the 

proposition that a manufacturer has a duty to make its 

product safe when "used for its intended purpose or for an 

unintended but reasonably foreseeable purpose." Lugo v. 

LJN Toys, Ltd., 552 N.E.2d 162, 163 (N.Y. 1990); Micallef v. 

Miehle Co., 348 N.E.2d 571, 577 (N.Y. 1976). The fatal flaw 

 17 
in the argument is that plaintiff ignores the more specific 

rule applicable here, that where a product has undergone 

substantial alteration after leaving the manufacturer's 

control and it is the alteration that creates the danger, the 

prevention of such alteration is not within the scope of the 

manufacturer's responsibility. Moreover, Lugo and Micallef, 

the cases cited by plaintiff, are merely examples of a 

manufacturer making a product that was unsafe even when 

used precisely in the manner that the manufacturer 

anticipated. See Lugo, 552 N.E.2d at 163; Micallef, 348 

N.E.2d at 577. Neither case supports the imposition of 

liability on a manufacturer of fertilizer products, which are 

safe when used for their intended purposes but were

rendered unsafe by terrorists who substantially altered the 

products so that they could be used for a violent purpose 

wholly foreign to their intended purposes. 

Because no duty exists under the law of either New 

Jersey or New York, we find that it was appropriate for the 

District Court to dismiss the Amended Complaint for failure 

to state a claim upon which relief could be granted. 

F. Proximate Causation 

The District Court also properly concluded that, under 

the law of either jurisdiction, defendants' actions or 

inactions were not the proximate cause of the World Trade 

Center bombing. 

As the District Court explained, the correct legal 

framework under New Jersey law is set forth in Zaza: 

 Utilization of [the] term [proximate cause] to draw 

 judicial lines beyond which liability will not be 

 extended is fundamentally . . . an instrument of 

 fairness and policy, although the conclusion is 

 frequently expressed in the confusing language of 

 causation, "foreseeability" and "natural and probable 

 consequences." Many years ago a case in this State hit 

 it on the head when it was said that the determination 

 of proximate cause by a court is to be based "upon 

 mixed considerations of logic, common sense, justice, 

 policy and precedent." 

Zaza, 675 A.2d at 635 (quoting Caputzal v. Lindsay Co., 

222 A.2d 513, 517 (N.J. 1966)). 

 18 
In another case, also cited by the District Court, the New 

Jersey Supreme Court provided the following guidance: 

 A negligent act is not necessarily a substantial factor or 

 proximate cause of an accident simply because it 

 contributed to the occurrence in the sense that absent 

 such an act the accident would not have transpired. 

 Rather, the critical consideration, in the context of 

 multiple factors contributing to the cause of the 

 accident, is whether the faulty act was itself too 

 remotely or insignificantly related to the accident. If it 

 can fairly be regarded as sufficiently remote or 

 insignificant in relation to the eventual accident then, 

 in a legal sense, such fault does not constitute"a 

 cause of the accident, . . . [but] simply presents the 

 condition under which the injury was received, . . .." 

Brown v. United States Stove Co., 484 A.2d 1234, 1243 

(N.J. 1984) (citations omitted). 

In Brown, the court also noted that, with regard to the 

subsequent alteration of a product, "if the original defect, 

although not the sole cause of the accident, constituted a 

contributing or concurrent proximate cause in conjunction 

with the subsequent alteration, the [original manufacturer] 

will remain liable." Id. at 1242. Furthermore, "[t]he critical 

factor in determining whether a subsequent substantial 

alteration of a product or its misuse can be attributed to a 

manufacturer as a proximate result of an original design 

defect under the risk-utility standard is `foreseeability.' " Id. 

at 1240. 

Plaintiff argued below and on appeal that the issue of 

proximate causation is for a jury to decide. The District 

Court properly recognized, however, that the court may 

conclude as a matter of law that defendants' actions were 

not the proximate cause of the plaintiff's injury."The issue 

of responsibility for the highly extraordinary consequence is 

also a matter of law for the court." Griesenbeck v. Walker, 

488 A.2d 1038, 1043 (N.J. Super. Ct. App. Div. 1985); 

accord Caputzal, 222 A.2d at 518 ("The idea of non-liability 

for the highly extraordinary consequence as a matter of law 

for the court has already been recognized in this state."). 

Furthermore, even if the existence of a duty may not be 

 19 
resolved as a matter of law, it may still be appropriate to 

decide the issue of proximate causation as a matter of law. 

See Brown, 484 A.2d 1244 (finding a genuine issue of 

material fact with respect to the existence of a duty, but 

granting summary judgment on the issue of proximate

cause). The New Jersey courts have on many occasions 

held that proximate causation did not exist as a matter of 

law. See Griesenbeck, 488 A.2d at 1043; Jensen v. 

Schooley's Mountain Inn, Inc., 522 A.2d 1043, 1045 (N.J. 

Super. Ct. App. Div. 1987); Brown, 484 A.2d at 1244; 

Caputzal, 222 A.2d at 518. 

Similarly, under New York law, a defendant is not held 

liable for every conceivable consequence that might

somehow be causally related to its conduct. See Dyer v. 

Norstar Bank, N.A., 588 N.Y.S.2d 499, 499 (App. Div. 1992) 

("[C]onceivability is not the equivalent of foreseeability."); 

Van Valkenburgh v. Robinson, 639 N.Y.S.2d 149, 151 (App. 

Div. 1996) (holding no proximate cause where injury was 

possible, but not probable, result of negligence). As in New 

Jersey, courts use proximate cause to draw judicial lines to 

limit liability. See Ventricelli v. Kinney System Rent a Car, 

Inc., 383 N.E.2d 1149, 1149 (N.Y. 1978) ("What we do mean 

by the word `proximate' is, that because of convenience, of 

public policy, of a rough sense of justice, the law arbitrarily 

declines to trace a series of events beyond a certain point."). 

As the District Court recognized, in New York, as in New 

Jersey, "questions of whether an intervening act severs the 

chain of causation depend on the foreseeability of the 

intervening act and should be determined by thefinder of 

fact." McCarthy, 916 F. Supp. at 372 (citation omitted). 

"However, in appropriate circumstances, the court may 

resolve the issue as a matter of law. Those cases generally 

involve independent intervening acts which operate upon 

but do not flow from the original act." Id. 

We find the decision of the Tenth Circuit in Gaines-Tabb 

v. ICI Explosives, USA, Inc., 160 F.3d 613 (10th Cir. 1998), 

to be persuasive on the issue of proximate causation. In 

that case, the plaintiffs sued the alleged manufacturers of 

the fertilizer used in the Oklahoma City bombing. The 

District Court dismissed the complaint for failure to state a 

claim, and the Tenth Circuit affirmed. Although that case 

 20 
was not decided under New York or New Jersey law, the 

principles and doctrines applied by the court are similar to 

those in the instant case. The court noted that causation 

was generally a question of fact, but that "the question 

becomes an issue of law when there is no evidence from 

which a jury could reasonably find the required proximate, 

causal nexus between the careless act and the resulting 

injuries." Id. at 620 (citation omitted). Applying the relevant 

state law, the court wrote: 

 [W]e hold that as a matter of law it was not foreseeable 

 to defendants that the [ammonium nitrate] that they 

 distributed to the Mid-Kansas Co-op would be put to 

 such a use as to blow up the Murrah Building. 

 Because the conduct of the bomber or bombers was 

 unforeseeable, independent of the acts of defendants, 

 and adequate by itself to bring about plaintiffs' 

 injuries, the criminal activities of the bomber or 

 bombers acted as the supervening cause of plaintiffs' 

 injuries. Because of the lack of proximate cause, 

 plaintiffs have failed to state a claim for negligence. 

Id. at 621. 

In the instant case, we similarly hold as a matter of law 

that the World Trade Center bombing was not a natural or 

probable consequence of any design defect in defendants' 

products. In addition, the terrorists' actions were

superseding and intervening events breaking the chain of 

causation. Thus, we find that, under the law of either 

jurisdiction, the District Court was correct infinding the 

World Trade Center bombing was not proximately caused 

by defendants. Rather, it was caused by the terrorists' 

intentional acts to create an explosive device and to cause 

the harm to the World Trade Center and its occupants. 

Therefore, the District Court correctly concluded that 

plaintiff failed to state a claim upon which relief could be 

granted. 

G. Failure to Warn 

The District Court dismissed plaintiff's failure to warn 

claims on two independent grounds: first, that defendants 

owed no duty to warn the middlemen; second, that plaintiff 

is unable to allege facts showing that such a warning would 

 21 
have prevented the harm. We agree with the District Court 

on both theories. 

Plaintiff alleges that defendants owed a duty to warn the 

distributors, wholesalers, retailers, and other suppliers not 

to sell the fertilizers to customers without confirming "that 

buyers in the general and unrestricted public market have 

legitimate and lawful purposes for use of defendants' 

products." Essentially, plaintiff's claim is that defendants 

negligently marketed their products to the general public, 

not that defendants failed to warn users of the products' 

dangers. 

As the District Court noted, plaintiff cannot point to a 

single case that supports its theory. The parties have raised 

the issue of whether the New Jersey Products Liability Act 

acts as a bar to plaintiff's theory. The NJPLA requires only 

a warning "that communicates adequate information on the 

dangers and safe use of the product taking into account the 

characteristics of, and the ordinary knowledge common to, 

the persons by whom the product is intended to be used." 

N.J.S.A. S 2A:58C-4. Plaintiff argues that, because the 

NJPLA "is not intended to codify all the issues related to 

products liability," id. at S 2A:58C-1, there is no statutory 

bar. Defendants argue that, by requiring only warnings 

about intended uses, the statute precludes any additional 

duties to warn. Like the District Court, we see no need to 

resolve this question because no cases, even under the 

common law, support the existence of such a duty. The 

cases cited by plaintiff do not support its existence at all. In 

the first case, Parks v. Pep Boys, 659 A.2d 471 (N.J. Super. 

Ct. App. Div. 1995), the plaintiff did not assert a failure to 

warn claim, nor did it sue the manufacturer at all. The 

second case, Coffman v. Keene Corp., 628 A.2d 710, 718 

(N.J. 1993), only discusses the heeding presumption-- the 

presumption under New Jersey law that the plaintiff would 

have "heeded" the warning if the manufacturer had given 

one. Nothing in the opinion imposes a duty on 

manufacturers to warn their middlemen. Finally, Macrie v. 

SDS Biotech Corp., 630 A.2d 805 (N.J. Super. Ct. App. Div. 

1993), does not support the existence of such a duty. That 

case involved the question whether the manufacturer has a 

duty to warn remote vendees. As the District Court 

 22 
recognized in the instant case, plaintiff is not seeking to 

hold the defendants liable for failing to warn the terrorists 

of the dangers of the fertilizer products. 

Plaintiff's argument similarly fails under New York law. 

Plaintiff can cite no case establishing such a duty. The only 

case cited, Tucci v. Bossert, 385 N.Y.S.2d 328 (App. Div. 

1976) is not on point, as there is no allegation that 

defendants in this case failed to warn the party exposed to 

the harm -- here, the plaintiff. Furthermore, the suggestion 

in Tucci that the adequacy of a warning is a jury issue 

should not be taken to mean that the question of the 

existence of the duty is a jury issue. As we have seen, the 

existence of a duty is properly a question for the court. 

Thus, plaintiff can cite no authority (and we canfind 

none) under either New Jersey or New York law which

supports the existence of a duty to warn middlemen that 

consumers, after purchasing their products, may alter the 

products and harm third parties. The District Court

properly dismissed the failure to warn claim on this 

ground. See also Gaines-Tabb, 160 F.3d at 625 (holding 

that plaintiffs failed to state a failure to warn claim under 

Oklahoma law because "defendants had no duty to warn 

the suppliers of its product of possible criminal misuse"). 

In addition, we agree with the District Court that plaintiff 

is unable to allege facts showing that an adequate warning 

would have prevented the harm. The District Court 

observed correctly that under both New Jersey and New 

York law, a plaintiff must show proximate cause in a failure 

to warn claim. Under New Jersey law, "[i]n a product 

liability case plaintiff has the burden of proving that the 

failure to give adequate warnings was a proximate cause of 

the accident and injuries and that the failure was a 

substantial factor in bringing about the happening of the 

accident." Malin v. Union Carbide Corp., 530 A.2d 794, 799 

(N.J. App. Div. 1987). "If the basis for recovery under strict 

liability is inadequacy of warnings or instruction about 

dangers, then plaintiff would be required to show that an 

adequate warning or instruction would have prevented the 

harm." Id. (quoting Campos v. Firestone Tire & Rubber Co., 

485 A.2d 305, 311 (N.J. 1984) (quoting Keeton, Products 

Liability--Inadequacy of Information, 48 Tex. L. Rev. 398, 

 23 
414 (1970))). New York law requires the same showing of 

proximate cause. See Elsroth, 700 F. Supp. at 166 ("Simply 

put, this tragedy would have occurred whether or not there 

had been a warning . . . , and the claim, therefore, must 

fail."). 

Applying this law, we agree with the District Court's 

reasoned elaboration of why the failure to warn claim must 

fail: 

 In light of the elaborate efforts the terrorists went 

 through to commit their heinous crime, it would defy 

 all logic, common sense, and fairness, the touchstones 

 of proximate causation, to presume that the World 

 Trade Center bombing would have been prevented had 

 Defendants warned their middlemen not to sell to 

 terrorists because terrorists might use the fertilizer to 

 create a bomb. Given the terrorists' obvious

 determination, the Court cannot presume that even if 

 the middlemen heeded this warning, the terrorists' plan 

 would have been thwarted. 

Port Authority of New York & New Jersey, 991 F. Supp. at 

410. 

Thus, the District Court properly found that plaintiff's 

failure to warn claim must be dismissed because no 

reasonable jury could conclude that the crime could have 

been prevented by defendants' warnings to middlemen that 

the fertilizer could be criminally misused. 

III. Conclusion 

For the reasons discussed above, we will affirm the

District Court's dismissal of the Amended Complaint for 

failure to state a claim upon which relief may be granted. 

 24 
Hoeveler, District Judge, Concurring: 

I concur in the very well developed opinion of Judge 

Roth. I am, however, constrained to offer an observation 

which may bear the fruit of protection from further similar 

disasters. The precedential value of our decision, as well as 

that of the Tenth Circuit in Gaines-Tabb v. ICI Explosives, 

USA, Inc., 160 F.3d 613 (10th Cir. 1998), rests largely on a 

slender and temporal reed: lack of foreseeability of the 

intervening criminal act. Whether experience and failure to 

use available safeguards will, in time, create new legal 

duties on the part of the manufacturer remains to be seen. 

We live in a society in which the disgruntled more and more 

resort to violence. Appellees' products, so easily convertible 

to dangerous qualities, need not -- with proper treatment 

-- become a part of that violence. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 25