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. e du/thir dc ir c uit_1999/227Filed 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 Dis trict Court Judge for the Southern District of Florida, sitting by design ation.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

2John 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, terror ist detonation of an explosive device under the World T rade Center in New York City, which caused six deaths, m any injuries and massive property damage. Plaintiff-app ellant, the Port Authority of New York and New Jersey, owne r of the World Trade Center, sued defendants, manufactur ers of fertilizer products, on theories of negligence and products liability, alleging that the terrorists used defend ants' fertilizer products to construct the explosive devi ce.

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 unde r Fed. R. Civ. P. 12(b)(6). Plaintiff appealed. We find th at it was appropriate, in light of the record, for the Distri ct Court to dismiss the action under Rule 12(b)(6). Specificall y, we agree with the District Court that as a matter of l aw defendants owed no duty to plaintiff and that the W orld

3Trade Center bombing was not proximately caused by

defendants' actions. Furthermore, we reject plainti ff's argument that the issues of duty and proximate caus ation were jury issues not properly decided by the court on a Rule 12(b)(6) motion. Accordingly, we will affirm t he judgment of the District Court.

I. Factual and Procedural History

A. Factual Background

The Port Authority of New York and New Jersey is th e owner of the World Trade Center in New York City. O n February 26, 1993, a bomb, which had been fabricate d by terrorists out of ammonium nitrate, urea, and nitri c acid, exploded in an underground parking garage at the Wo rld 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 bom b was allegedly assembled in New Jersey by New Jersey res idents. Defendants Hydro-Agri North America, Inc., and Dyno Nobel Inc., formerly known as Ireco, Inc., are alle ged to have manufactured, designed, marketed, distributed and/or sold the ammonium nitrate used by the terror ists. Defendant Arcadian Corporation is alleged to have manufactured, designed, marketed, distributed and/o r sold the urea used by the terrorists.

The ammonium nitrate and urea, alleged to have been purchased by the terrorists, were sold in prill for m, i.e., a white, round, hardened droplet about the size of th e tip of a ball point pen. The prills were manufactured to b e used as fertilizer. The ammonium nitrate prills can be r endered explosive by the addition of fuel oil or other sens itizing substances; the urea prills can be rendered explosi ve by the addition of nitric acid and water (forming urea nit rate). The terrorists are alleged to have rendered the prills explosive by adding these substances. Defendants point out th at, as conceded in the Amended Complaint, the prills are n ot explosive in and of themselves.

Plaintiff alleges that defendants knew or should ha ve known that the ammonium nitrate and urea could easi ly be

4made into explosives and that terrorists had used t hem

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 amm onium nitrate over fifty years ago destroyed two ships do cked at Texas City, Texas, killing 468 persons and causing extensive damage in the city. Second, more than thi rty years ago, anti-war protesters used ammonium nitrat e to bomb the Mathematics Research Building at the Unive rsity of Wisconsin, leading to injuries, death and proper ty damage.

Plaintiff alleges that defendants had the means to reduce the danger of their products. In 1968, Samuel Porte r patented a process that rendered ammonium nitrate fertilizers non-detonable. The process called for a dding five to ten percent of diammonium phosphate, a high grad e of fertilizer, to ammonium nitrate at a nominal additi onal cost. When the patent was made available to ammoniu m 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. Specif ically, in response to the University of Wisconsin bombing, se veral states introduced legislation to require that all a mmonium 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 legis lative efforts were allegedly well publicized, including w ithin the fertilizer industry, but plaintiff asserts that var ious fertilizer manufacturers resisted the legislation, leading to its

ultimate defeat.

In addition, in 1975, the European Economic Communi ty Council issued a directive that established (1) str ict

standards for the formulation of solid ammonium nit rate and (2) detonation tests that could be required by member

countries to ensure that fertilizer sold in those c ountries

5had 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 b ombings in Northern Ireland and the Republic of Ireland pro mpted 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 utilize d, prior to the World Trade Center bombing. It was allegedly kn own that the addition of phosphate and other additives to urea prills would decrease or eliminate their use as exp losive and energetic materials. Explosives made of urea ni trate were allegedly used in the Middle East, South Ameri ca, Pakistan and the United States prior to the World T rade Center bombing. In 1992, the sales of urea and ammo nium

nitrate fertilizer were banned in Peru as a result of the extensive use of urea and ammonium nitrate prills i n explosives set off by the Shining Path terrorists.

B. Procedural Background

Plaintiff filed this action on February 26, 1996, i n the Superior Court of New Jersey in Essex County. Defen dants

removed the actions to the United States District C ourt for the District of New Jersey on the grounds of divers ity of citizenship. Plaintiff filed an Amended Complaint b efore 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 negl igence, asserts that defendants "negligently failed to desi gn, manufacture, market, distribute and/or sell [ammoni um nitrate or urea prills] with a formulation" that wo uld either

"render them less detonable or non-detonable" or "d ecrease or eliminate their explosive properties." Count II, a claim in strict liability, asserts that defendants are liabl e because the ammonium nitrate and urea prills were "unreason ably

6dangerous and defective when they left the respecti ve

control of each of the Defendants." Count III asser ts that defendants are liable because they "failed to provi de 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 Defe ndants' products."

Defendants filed a Motion to Dismiss pursuant to Fe d. R. Civ. P. 12(b)(6). The District Court granted the mo tion and dismissed the Complaint with prejudice. See Port Au thority 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 al legations in the complaint." Id. (citations omitted). "A cour t may dismiss a complaint only if it is clear that no rel ief 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 pursu ant to 28 U.S.C. S 1332. Because this is an appeal from a final order of the District Court, we have jurisdiction p ursuant to

28 U.S.C. S 1291.

C. Choice of Law

As an initial matter, the District Court found it w as not necessary to make a determination whether New York or New Jersey law applies to the Amended Complaint. In stead, the District Court determined that the Amended Comp laint

failed to state a claim under the law of either sta te. The District Court's approach was appropriate. A federa l court

7sitting in diversity applies the choice of law prin ciples 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 u nder the laws of all relevant jurisdictions, the court need not decide which law would apply to the action. See Rohm & Haa s Co. v. Adco Chem. Co., 689 F.2d 424, 429 (3d Cir. 1982) ; Mueller v. Parke-Davis, 599 A.2d 950, 954 (N.J. Sup er. 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 Dist rict Court erred in failing to recognize the legal suffi ciency of the Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6). Plaintiff argues that, although the Distr ict Court quoted the correct standard under Rule 12(b)(6), it misapplied it to the case. In essence, plaintiff co ntends that the Amended Complaint alleges facts sufficient to p lead the elements of the causes of action (under either juri sdiction)

but that the District Court elected to conclude tha t a jury could not rule in favor of plaintiff under any set of facts consistent with the Amended Complaint. Plaintiff ar gues that this ruling was premature and inconsistent wit h the mandate that the District Court must interpret alle gations in the light most favorable to the plaintiff. Plain tiff argues that, in dismissing the complaint, the District Cou rt made rulings on factual issues of foreseeability and pro ximate cause, which are traditionally the province of the jury. In sum, plaintiff claims that the District Court excee ded its limited role in reviewing the sufficiency of a comp laint and that plaintiff is entitled to discovery and to pres ent evidence to a jury because the allegations in the Amended Co mplaint

are sufficient.

We find, however, that the District Court applied t he standard correctly. Thus, the District Court assume d that the facts alleged in the Amended Complaint were tru e but determined that the facts, even if true, could not legally support plaintiff's claims. Plaintiff disagrees wit h this conclusion in two respects. First, plaintiff conten ds that the

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

for the elements of a tort claim. Consequently, sin ce 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 u pon a wrong for which there is clearly no remedy, or a cl aim which the plaintiff is without right or power to as sert and for which no relief could possibly be granted . . . ." MeloSonics Corp. v. Cropp, 342 F.2d 856, 859 (3d Cir. 1 965) (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 al legations in the Amended Complaint as true and making every favorable inference in favor of plaintiff but decid ing nevertheless that no relief could be granted.2

Second, we disagree with plaintiff's insistence tha t the District Court misapplied Rule 12(b)(6) by consider ing whether plaintiff's claims were sufficient as a mat ter of "fairness" or "sound policy." Plaintiff argues that such considerations improperly substituted the court's v iews for those of the jury. Plaintiff, however, misunderstan ds 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 unr easonable 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, inclu ding the social and economic costs of any expansion of the o uter boundaries of tort liability. Id. This consideratio n

___________________________________________________ ______________

2. Plaintiff argues that District Court Judge Bassl er indicated during

oral argument that he believed that plaintiff would prev ail if the case was presented to a jury. "Then at the end, I mean, I ca n'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 as king 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.

9necessarily involves considerations of social and p ublic

policy. Id.

As we will explore more fully below, the legal boun ds of duty and of proximate cause are aspects of tort law in which issues of fairness and public policy are part icularly relevant. We conclude that the District Court prope rly considered questions of fairness and policy and mad e rulings of law on issues of reasonable foreseeabili ty and proximate causation. Moreover, a jury would be aske d to determine if a duty had been violated or if the har m in question had been proximately caused by the defenda nts 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 th ere was no duty and no proximate causation, there was nothi ng for a jury to consider.

E. Duty

The District Court properly concluded that the Amen ded Complaint failed to establish the existence of a du ty owed by defendants. Under both New Jersey and New York l aw, the question of whether a duty is owed is a questio n of law to be decided by the court. Strachan v. John F. Ken nedy Mem'l Hosp., 538 A.2d 346, 349 (N.J. 1988) ("The qu estion of whether a duty exists is a matter of law properl y 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 g roup of society owes a duty of care to reasonably avoid inj ury to another is of course a question of law for the cour ts.").

Under the law of either jurisdiction, it is appropr iate for us to focus on product liability principles in dete rmining if defendants did owe plaintiff a duty. Under New Jers ey 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 T irrell 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

10defendants' allegedly defective products. It theref ore falls

within the New Jersey Product Liability Act (the"NJ PLA"), 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 des ign and warning defects are functionally equivalent. Elsrot h 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-Wall ace, Inc., 478 N.Y.S.2d 375, 379 (App. Div. 1984)). A"pl aintiff can recover nothing in negligence on his products c laims

that he cannot first recover under his strict liabi lity claims asserting product, design, and warning defects." Id . at 158.

We find that defendants owed no duty to plaintiff u nder either New Jersey or New York law. First, the manuf acturer of a raw material or component part that is not its elf 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 all egations, 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 produ cts 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 plainti ff 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 decaffeinatio n process. The defendant, who had manufactured the qu ench tank, knew from designs that, once integrated into the larger system, the tank would need certain safety d evices. Nevertheless, the New Jersey Supreme Court held tha t the component part manufacturer owed the plaintiff no d uty regarding any danger posed by the integrated device

, stating that a component part fabricator may only b e held

11"strictly liable for injury caused by a defective c omponent

where the defect is in the component part and the p art did not undergo substantial change after leaving the

manufacturer's hands." Id. at 636.3 The court relie d on a tentative draft of the Restatement (Third) of Torts , in which the American Law Institute "concluded that a compon ent part manufacturer generally is not liable unless th e component part is defective or the component provid er substantially participated in the design of thefina l product." Id. at 629. The court also followed the " majority of courts from other jurisdictions [which] have hel d that a manufacturer of a component part, which is not dang erous until it is integrated by the owner into a larger s ystem, cannot be held strictly liable to an injured employ ee for the failure of the owner and/or assembler to install sa fety

devices." Id.

In the instant case, there is no allegation that th e

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3. We disagree with the District Court's conclusion that New Jersey has rejected the component part doctrine. See Port Auth ority, 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 w hich 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, expl ained that "[a] further requirement for the imposition of strict liability on a component part fabricator is that the component part reach the use r without substantial change. Where a component part is subject to furthe r processing, or where the causing of the injury is not directly att ributable 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 substant ial change to the defendant's product, because its defect (the failur e to add a safety device) was "untouched and remained unaffected by" the subs equent work on the machine. Michalko, 451 A.2d at 186. In the inst ant case, it is undisputed that the fertilizer products underwent s ubstantial 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, purchaser s who had removed safety devices from the defendants' finished produc ts. See Port Authority, 991 F. Supp. at 400 (citing Oquendo, 939 F. Supp. a t 362 (removal of point-of-operation guard and rewiring to bypass int erlock mechanism); and Brown v. United States Stove Co., 484 A.2d 1234 , 1239-41 (N.J. 1984) (purchaser removed safety valves from space h eater)).

12fertilizer products were dangerous in and of themse lves.

Under plaintiff's own allegations, the raw ammonium nitrate and urea sold by defendants were not explos ive until the terrorists purposefully manipulated and adulter ated them by mixing them together with additional chemic als such that they were transformed into energized mate rials that could be incorporated into an explosive charge . The danger to plaintiff was presented not by the raw ma terials, but by a bomb that incorporated the raw materials a fter they had been substantially altered. In addition, d efendants

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"t hat 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 ris e 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 cons umption and handling." Id. (quoting Restatement (Second) of Torts, S 402A cmt. h). Where "the use of the product is be yond its intended or reasonably anticipated scope," an injur y 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 u nsafe for their intended purposes, that is, when used as fert ilizer.

Plaintiff attempts to argue that defendants should be liable nonetheless because the New Jersey courts ha ve held that a manufacturer's duty also encompasses objecti vely foreseeable misuses and alterations. See Oquendo, 9 39 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 alt erations were objectively foreseeable and likely to cause in juries."); Jurado v. Western Gear Works, 619 A.2d 1312, 1317 ( N.J. 1993) ("Hence, the plaintiff in a design-defect pro ducts liability suit may succeed even if the product was misused,

13as 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 substa ntial alteration or misuse, the manufacturer will be resp onsible for resultant injuries to an operator if the altera tion or misuse implicated in the actual use of the machine was foreseeable and could have been prevented or reduce d by the manufacturer.").

We conclude, however, that the alteration and misus e of defendants' fertilizer products were not objectivel y foreseeable. We reject, therefore, plaintiff's atte mpt to hold defendants liable under this theory. The court in O quendo set forth New Jersey law as follows:

Objective foreseeability means reasonable foreseeability. The standard "does not affix responsibility for future events that are on ly theoretically, remotely, or just possibly fo reseeable, or even simply subjectively foreseen by a parti cular manufacturer." . . . Rather it "applies to t hose future occurrences that, in light of the general ex perience within the industry when the product was manufactured, objectively and reasonably cou ld have been anticipated."

Oquendo, 939 F. Supp. at 362 (quoting Brown v. Unit ed 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 fertilize r products were used in bombs does not suffice to est ablish objective foreseeability. "Such knowledge . . . ten ds to show only subjective foreseeability, and . . . subjectiv e foreseeability is irrelevant to the [objective] for eseeability

determination." Id. at 363.

Plaintiff argued below, and again on appeal, that t he issues of objective foreseeability and reasonablene ss should be left for a jury to decide. We recognize that the se 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 manufactur er could not have foreseen the change." Id. (quoting

14parenthetically Merriweather v. E.W. Bliss Co. , 63 6 F.2d 42,

45 (3d Cir. 1980) (quoting D'Antona v. Hampton Grin ding Wheel Co., 310 A.2d 307 (Pa. Super. Ct. 1973)).

The inferences in this case are indeed so clear tha t we can say as a matter of law that the transformation and integration of the otherwise safe fertilizer produc ts into the type of explosive device used in the World Trade Ce nter bombing was not objectively foreseeable to the defe ndants at the time of this bombing. We agree with the Dist rict

Court's conclusion that:

No jury could reasonably could conclude that one accidental explosion 50 years ago, one terro rist act in this country almost 30 years ago, and scatte red terrorists incidents throughout the world ov er the course of the last 30 years would make an in cident like the World Trade Center bombing anything more than a remote or theoretical possibility.

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

402-03.

We, of course, must follow the precedents of the Ne w Jersey Supreme Court. Travelers Indemnity Co. v. Di Bartolo, 131 F.3d 343, 348 (3d Cir. 1997). The District Cour t's

conclusion is consistent with the refusal of the Ne w 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. , Jur ado, 619 A.2d at 1318 ("If . . . a plaintiff undertakes to u se 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 can not be charged with strict liability when the knife is use d 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 plas tic Clorox bottles to carry gasoline because such a dut y would cover an infinite variety of misuses).

We agree with the District Court that imposing a du ty on

defendants in this case would be unfair. "Ultimatel y, the

15determination of the existence of a duty is a quest ion of

fairness and public policy. Foreseeability of injur y 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 defe ndants to anticipate and prevent the use of their products as one part of a terrorist's explosive device. Their produ cts were not explosive in and of themselves, without being m ixed 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 NJ PLA, which "has been interpreted as evincing a legislative pol icy to limit the expansion of products-liability law." Zaza, 675 A.2d at 627 (internal quote marks omitted). We leave such a n expansion of duty to the legislature.

Similarly, under New York law, we find that no duty exists that would provide a basis for liability. Th e manufacturer of a component part is not liable for the ways in which a purchaser subsequently processes or inte grates 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 in jured by the malfunction of the assembled unit. Indeed, unde r New York law, a manufacturer is not liable where its pr oduct became dangerous only due to substantial alteration even if the product is not a component part or raw mater ial. 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 liabil ity or negligence cause of action, where, after the produc t leaves the possession and control of the manufacturer, the re is a subsequent modification which substantially alters the product and is the proximate cause of plaintiff's i njuries." In Robinson, the court rejected the plaintiff's att empt to hold a machine manufacturer liable for an injury ca used because safety guards were removed, saying "[m]ater ial alterations at the hands of a third party which wor k a

16substantial change in the condition in which the pr oduct

was sold . . . are not within the ambit of the manu facturer'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 a dd a safety device to its product to prevent other subst ances from being combined with it. In that case, an indiv idual laced Tylenol capsules with cyanide and replaced th e 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 inju red 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 w ould

have made it more difficult for a criminal to adult erate the product. Id. at 160, 163. The court rejected this a rgument, holding that "there exists no common law duty requi ring . . . 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 s ame way four years earlier. Id. at 153. Similarly, in R obinson,

the court concluded that the machine manufacturer h ad no duty to prevent disengagement of a safety device"ho wever foreseeable that modification may have been." Robin son, 403 N.E.2d at 444; see also McCarthy v. Sturm, Ruge r, 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 mi suse 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 ar e inapplicable to this case. Plaintiff relies exclusi vely 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." Lug o v. LJN Toys, Ltd., 552 N.E.2d 162, 163 (N.Y. 1990); Mi callef v. Miehle Co., 348 N.E.2d 571, 577 (N.Y. 1976). The fa tal flaw

17in the argument is that plaintiff ignores the more specific

rule applicable here, that where a product has unde rgone substantial alteration after leaving the manufactur er's

control and it is the alteration that creates the d anger, the prevention of such alteration is not within the sco pe of the manufacturer's responsibility. Moreover, Lugo and Micallef, the cases cited by plaintiff, are merely examples o f 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 alt ered the products so that they could be used for a violent p urpose 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, un der 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 n ot be extended is fundamentally . . . an instrumen t of fairness and policy, although the conclusion is frequently expressed in the confusing langua ge 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 det ermination 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)).

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

Jersey Supreme Court provided the following guidanc e:

A negligent act is not necessarily a substan tial factor or proximate cause of an accident simply becaus e it

contributed to the occurrence in the sense t hat absent

such an act the accident would not have tran spired. Rather, the critical consideration, in the c ontext of multiple factors contributing to the cause o f the accident, is whether the faulty act was itse lf too remotely or insignificantly related to the a ccident. If it can fairly be regarded as sufficiently remot e or insignificant in relation to the eventual ac cident then, in a legal sense, such fault does not consti tute"a cause of the accident, . . . [but] simply pr esents the condition under which the injury was receive d, . . .."

Brown v. United States Stove Co., 484 A.2d 1234, 12 43 (N.J. 1984) (citations omitted).

In Brown, the court also noted that, with regard to the subsequent alteration of a product, "if the origina l defect, although not the sole cause of the accident, consti tuted a contributing or concurrent proximate cause in conju nction with the subsequent alteration, the [original manuf acturer] will remain liable." Id. at 1242. Furthermore, "[t] he critical factor in determining whether a subsequent substant ial alteration of a product or its misuse can be attrib uted to a manufacturer as a proximate result of an original d esign defect under the risk-utility standard is `foreseea bility.' " Id.

at 1240.

Plaintiff argued below and on appeal that the issue of proximate causation is for a jury to decide. The Di strict Court properly recognized, however, that the court may conclude as a matter of law that defendants' action s were not the proximate cause of the plaintiff's injury." The issue of responsibility for the highly extraordinary cons equence 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 matte r of law for the court has already been recognized in this s tate."). Furthermore, even if the existence of a duty may no t be

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

decide the issue of proximate causation as a matter of law. See Brown, 484 A.2d 1244 (finding a genuine issue o f material fact with respect to the existence of a du ty, but granting summary judgment on the issue of proximate cause). The New Jersey courts have on many occasion s held that proximate causation did not exist as a ma tter 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 h eld liable for every conceivable consequence that might somehow be causally related to its conduct. See Dye r v. Norstar Bank, N.A., 588 N.Y.S.2d 499, 499 (App. Div . 1992) ("[C]onceivability is not the equivalent of foresee ability."); 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 R ent a Car, Inc., 383 N.E.2d 1149, 1149 (N.Y. 1978) ("What we d o mean by the word `proximate' is, that because of conveni ence, of public policy, of a rough sense of justice, the law arbitrarily declines to trace a series of events beyond a certa in point.").

As the District Court recognized, in New York, as i n New Jersey, "questions of whether an intervening act se vers the chain of causation depend on the foreseeability of the intervening act and should be determined by thefind er of fact." McCarthy, 916 F. Supp. at 372 (citation omit ted). "However, in appropriate circumstances, the court m ay resolve the issue as a matter of law. Those cases g enerally 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 Ci r. 1998), to be persuasive on the issue of proximate causatio n. In that case, the plaintiffs sued the alleged manufact urers of the fertilizer used in the Oklahoma City bombing. T he District Court dismissed the complaint for failure to state a claim, and the Tenth Circuit affirmed. Although tha t case

20was not decided under New York or New Jersey law, t he

principles and doctrines applied by the court are s imilar to

those in the instant case. The court noted that cau sation was generally a question of fact, but that "the que stion

becomes an issue of law when there is no evidence f rom which a jury could reasonably find the required pro ximate,

causal nexus between the careless act and the resul ting 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] th at 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 de fendants, and adequate by itself to bring about plaint iffs' injuries, the criminal activities of the bom ber or bombers acted as the supervening cause of pl aintiffs' injuries. Because of the lack of proximate c ause, 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 natur al or probable consequence of any design defect in defend ants' products. In addition, the terrorists' actions were superseding and intervening events breaking the cha in of causation. Thus, we find that, under the law of eit her jurisdiction, the District Court was correct infind ing the World Trade Center bombing was not proximately caus ed by defendants. Rather, it was caused by the terrori sts' intentional acts to create an explosive device and to cause the harm to the World Trade Center and its occupant s. Therefore, the District Court correctly concluded t hat 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 defe ndants owed no duty to warn the middlemen; second, that pl aintiff is unable to allege facts showing that such a warni ng would

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

on both theories.

Plaintiff alleges that defendants owed a duty to wa rn the distributors, wholesalers, retailers, and other sup pliers not

to sell the fertilizers to customers without confir ming "that buyers in the general and unrestricted public marke t have legitimate and lawful purposes for use of defendant s' products." Essentially, plaintiff's claim is that d efendants negligently marketed their products to the general public, not that defendants failed to warn users of the pro ducts' dangers.

As the District Court noted, plaintiff cannot point to a single case that supports its theory. The parties h ave raised the issue of whether the New Jersey Products Liabil ity Act acts as a bar to plaintiff's theory. The NJPLA requ ires only a warning "that communicates adequate information o n the dangers and safe use of the product taking into acc ount the characteristics of, and the ordinary knowledge comm on to, the persons by whom the product is intended to be u sed." N.J.S.A. S 2A:58C-4. Plaintiff argues that, because the NJPLA "is not intended to codify all the issues rel ated to products liability," id. at S 2A:58C-1, there is no statutory bar. Defendants argue that, by requiring only warni ngs about intended uses, the statute precludes any addi tional 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. T he cases cited by plaintiff do not support its existen ce 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 g iven one. Nothing in the opinion imposes a duty on manufacturers to warn their middlemen. Finally, Mac rie v. SDS Biotech Corp., 630 A.2d 805 (N.J. Super. Ct. Ap p. Div. 1993), does not support the existence of such a dut y. That case involved the question whether the manufacturer has a duty to warn remote vendees. As the District Court

22recognized in the instant case, plaintiff is not se eking 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 th at defendants in this case failed to warn the party ex posed to the harm -- here, the plaintiff. Furthermore, the s uggestion in Tucci that the adequacy of a warning is a jury i ssue should not be taken to mean that the question of th e existence of the duty is a jury issue. As we have s een, the existence of a duty is properly a question for the court.

Thus, plaintiff can cite no authority (and we canfi nd 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 alt er the products and harm third parties. The District Court properly dismissed the failure to warn claim on thi s ground. See also Gaines-Tabb, 160 F.3d at 625 (hold ing that plaintiffs failed to state a failure to warn c laim under Oklahoma law because "defendants had no duty to war n the suppliers of its product of possible criminal m isuse").

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 N ew York law, a plaintiff must show proximate cause in a failure to warn claim. Under New Jersey law, "[i]n a produc t liability case plaintiff has the burden of proving that the failure to give adequate warnings was a proximate c ause 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 7 94, 799 (N.J. App. Div. 1987). "If the basis for recovery u nder strict liability is inadequacy of warnings or instruction about dangers, then plaintiff would be required to show t hat an adequate warning or instruction would have prevente d the harm." Id. (quoting Campos v. Firestone Tire & Rubb er Co., 485 A.2d 305, 311 (N.J. 1984) (quoting Keeton, Prod ucts Liability--Inadequacy of Information, 48 Tex. L. Re v. 398,

23414 (1970))). New York law requires the same showin g of

proximate cause. See Elsroth, 700 F. Supp. at 166 ( "Simply put, this tragedy would have occurred whether or no t 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 cla im must

fail:

In light of the elaborate efforts the terror ists went through to commit their heinous crime, it wo uld defy all logic, common sense, and fairness, the t ouchstones of proximate causation, to presume that the World Trade Center bombing would have been prevent ed had

Defendants warned their middlemen not to sel l 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 terro rists' plan

would have been thwarted.

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

410.

Thus, the District Court properly found that plaint iff'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 g ranted.

24Hoeveler, District Judge, Concurring:

I concur in the very well developed opinion of Judg e Roth. I am, however, constrained to offer an observ ation 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 Exp losives, USA, Inc., 160 F.3d 613 (10th Cir. 1998), rests lar gely on a slender and temporal reed: lack of foreseeability o f the intervening criminal act. Whether experience and fa ilure to use available safeguards will, in time, create new legal duties on the part of the manufacturer remains to b e 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 tre atment -- become a part of that violence.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

25