Opinion ID: 1379140
Heading Depth: 2
Heading Rank: 1

Heading: IFF's Proposed Product Liability Crossclaim

Text: IFF argues that the District Court erred in denying its request to assert a product liability crossclaim. The District Court agreed with Judge Shipp that IFF's crossclaim sounded in contract and thus was governed by the U.C.C. and its four-year statute of limitations. The Court rejected IFF's contention that its crossclaim sounded in tort and was therefore governed by the New Jersey Product Liability Act (NJPLA), N.J. Stat. Ann. § 2A:58C-1 et seq., and New Jersey's accompanying six-year statute of limitations for tort claims. See N.J. Stat. Ann. § 2A:14-1. [4] In making these determinations, the District Court reviewed New Jersey's economic loss doctrine. While recognizing that New Jersey law was unsettled on this point, the District Court, after surveying the law in other jurisdictions, predicted that the Supreme Court of New Jersey would interpret that doctrine to bar tort claims where a plaintiff seeks economic damages for foreseeable losses for which the plaintiff could have contractually allocated risk. Concluding that IFF was just such a plaintiff, the District Court reasoned that the economic loss doctrine barred application of the NJPLA in this case. Under the NJPLA, [a] manufacturer or seller of a product shall be liable in a product liability action only if the claimant proves by a preponderance of the evidence that the product causing the harm was not reasonably fit, suitable or safe for its intended purpose[.] N.J. Stat. Ann. § 2A:58C-2. [5] The statute defines harm, in pertinent part, as physical damage to property, other than to the product itself[.] N.J. Stat. Ann. § 2A:58C-1(b)(2)(a). While the NJPLA defines harm, it does not explain the meaning of physical damage to property, other than to the product itself. No New Jersey court has delineated the contours of the product itself and other property as contemplated by the NJPLA. Under New Jersey law, the economic loss doctrine defines the boundary between the overlapping theories of tort law and contract law by barring the recovery of purely economic loss in tort, particularly in strict liability and negligence cases. Dean v. Barrett Homes, Inc., 406 N.J.Super. 453, 968 A.2d 192, 202 (2009) (quotation marks and citation omitted), cert. granted, 200 N.J. 207, 976 A.2d 384 (2009). The purpose of the rule is to strike an equitable balance between countervailing public policies[] that exist in tort and contracts law. Id. (internal quotation marks and citation omitted). Neither the Supreme Court of New Jersey nor any other New Jersey court has directly clarified the interaction between the NJPLA and the economic loss doctrine. In other words, no New Jersey case specifically says whether the sort of claim IFF alleges here is governed by contract or tort principles. As a consequence, we must predict how the New Jersey Supreme Court would resolve this case. See Hunt v. United States Tobacco Co., 538 F.3d 217, 220 (3d Cir.2008) ([I]n the absence of any clear precedent of the state's highest court, we must predict how that court would resolve the issue. (quotation marks, other alteration and citation omitted)). In making such a prediction, we ... consider relevant state precedents, analogous decisions, considered dicta, scholarly works, and any other reliable data tending convincingly to show how the highest court in the state would resolve the issue at hand. Id. at 221. (quotation marks and citation omitted). Furthermore, in the absence of direct authority from the New Jersey Supreme Court, we may treat as persuasive authority decisions of the Appellate Division of the Superior Court of New Jersey. See Edwards v. HOVENSA, LLC, 497 F.3d 355, 361 (3d Cir.2007) ([A]n intermediate appellate state court is a datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise.) (quotation marks and ellipsis omitted) (quoting West v. AT&T Co., 311 U.S. 223, 237, 61 S.Ct. 179, 85 L.Ed. 139 (1940)). The New Jersey courts have long recognized that while [a] tort action is separate and distinct from a contract action[,] Huck v. Gabriel Realty, 136 N.J.Super. 468, 346 A.2d 628, 632 (N.J.Super. Ct. Law Div.1975) (citation omitted), [t]he boundary line between tort and contract actions is not capable of clear demarcation. New Mea Constr. Corp. v. Harper, 203 N.J.Super. 486, 497 A.2d 534, 538 (1985), cited with approval in Saltiel v. GSI Consultants, Inc., 170 N.J. 297, 788 A.2d 268, 276 (2002). The interplay between tort and contract law in New Jersey has undergone significant changes over the last several decades. In Santor v. A & M Karagheusian, Inc., 44 N.J. 52, 207 A.2d 305 (1965), the New Jersey Supreme Court held that a purchaser could maintain a strict liability claim seeking economic loss against the manufacturer of a defective product. The Court acknowledged that its holding implicitly allowed tort law to invade what had previously been exclusively contractual territory, but reasoned that a consumer would otherwise have no remedy in contract against a manufacturer with which he was not in privity. Thus, the Court concluded that allowing the consumer to bring an action in tort would supply a remedy where contract law provided none. Two decades later, the New Jersey Supreme Court rejected the rationale of Santor, at least in the commercial, as opposed to consumer, context, in Spring Motors Distributors, Inc. v. Ford Motor Company, 98 N.J. 555, 489 A.2d 660 (1985), where a purchaser of trucks sued the dealer and the manufacturer of the trucks as well as the supplier of the transmissions after the trucks failed to operate properly because of defects in the transmissions. [6] The Court held, among other things, that the purchaser could not assert a strict liability claim against the manufacturer or the supplier for economic loss. See id. at 663 ([A] commercial buyer seeking damages for economic loss resulting from the purchase of defective goods may recover from an immediate seller and a remote supplier in a distributive chain for breach of warranty under the U.C.C., but not in strict liability or negligence.). The Court noted that, [a]s a general rule, the rights and duties of a buyer and seller are determined by ... the U.C.C.[,] while strict liability evolved as a judicial response to inadequacies in sales law with respect to consumers who sustained physical injuries from defective goods made or distributed by remote parties in the marketing chain. Id. at 670. Explaining that [t]he considerations that give rise to strict liability do not obtain between commercial parties with comparable bargaining power and that a commercial buyer ... may be better situated than the manufacturer to factor into its price the risk of economic loss caused by the purchase of a defective product[,] the Court concluded that, [a]s between commercial parties, ... the allocation of risks in accordance with their agreement better serves the public interest than an allocation achieved as a matter of policy without reference to that agreement. Id. at 670-71. In reaching that conclusion, the Court turn[ed] to the structure and purpose of the [U.C.C.], which[,] it observed, constitutes a comprehensive system for determining the rights and duties of buyers and sellers with respect to contracts for the sale of goods. Id. at 665 (citation omitted). That structure and purpose, the Court reasoned, reflected the principle that parties should be free to make contracts of their choice, including contracts disclaiming liability for breach of warranty. Once they reach such an agreement, society has an interest in seeing that the agreement is fulfilled. Consequently, the U.C.C. is the more appropriate vehicle for resolving commercial disputes arising out of business transactions between persons in a distributive chain. Id. at 668. In the New Jersey Supreme Court's view, allowing the truck purchaser to sue in tort would would dislocate major provisions of the [U.C.C.] by obviat[ing] the statutory requirement that a buyer give notice of a breach of warranty and depriv[ing] the seller of the ability to exclude or limit its liability[.] Id. at 671 (citations omitted). In sum, the Court wrote, the U.C.C. represents a comprehensive statutory scheme that satisfies the needs of the world of commerce, and courts should pause before extending judicial doctrines that might dislocate the legislative structure. Id. The New Jersey Supreme Court revisited and expanded on these principles more than two decades later in Alloway v. General Marine Industries, 149 N.J. 620, 695 A.2d 264 (1997), where a non-commercial purchaser of a faulty boat sued the dealer and the manufacturer for economic loss. The Court explained that while tort principles are better suited to resolve claims for personal injuries or damage to other property[,] ... [c]ontract principles more readily respond to claims for economic loss caused by damage to the product itself. Id. at 267-68 (citations omitted). Put another way, [t]ort principles more adequately address the creation of an unreasonable risk of harm when a person or other property sustains accidental or unexpected injury[,] while contract principles, particularly as implemented by the U.C.C., provide a more appropriate analytical framework where a product fails to fulfill a purchaser's economic expectations[.] Id. at 268 (citations omitted). Implicit in the distinction[,] the Court observed, is the doctrine that a tort duty of care protects against the risk of accidental harm and a contractual duty preserves the satisfaction of consensual obligations. Id. (citations omitted). Also relevant to the distinction between contract and tort, the Alloway Court said, are the relative bargaining power of the parties and the allocation of the loss to the better risk-bearer in a modern marketing system. Id. (internal quotation marks and citations omitted). The Court was likewise concerned with respecting legislative commands. By enacting the U.C.C. into New Jersey law, the [New Jersey] Legislature adopted a comprehensive system for compensating consumers for economic loss arising from the purchase of defective products. Id. (citations omitted). Importantly, the Court wrote, reiterating its statements in Spring Motors, the U.C.C., which provides a broad panoply of contractual protections, must be liberally construed so as promote [its] underlying purposes and policies. Id. at 269 (citation omitted). Finding that the purchaser of the boat had insured against the risk that gave rise to his economic loss by contractually protecting itself and noting the unfairness of imposing on a seller tort liability for economic loss[,] the Court held that the purchaser's tort claims were barred by the economic loss doctrine. Id. at 275. [7] Although Spring Motors and Alloway plainly disfavor the application of tort law in what is an otherwise clearly contractual context, neither case addresses the circumstance where, as here, a buyer has entered into a contract  which includes contractual protection in the form of indemnification and warranty clauses  with a seller of an allegedly defective product that causes damage not only to the product itself but to something other than the product itself. Here, the product itself is the vanilla beans IFF bought from Dammann. The other property that was allegedly damaged is IFF's other flavoring products it mixed with the contaminated beans as well as the machinery it used to manufacture vanilla extract. We cannot help but note, as we analyze this case, what appears to be a tension between the economic loss doctrine and the NJPLA. Specifically, the economic loss doctrine precludes tort claims for purely economic loss without reference to whether the loss stems from damage to the product itself or other property. At the same time, the NJPLA clearly permits a plaintiff to pursue a tort remedy in the event of harm to other property without reference to New Jersey's preference for keeping tort out of contract's hair. The New Jersey Supreme Court has not had occasion to harmonize that apparent tension, see, e.g., Alloway, 695 A.2d at 273 (declining to resolve the issue whether the U.C.C. or tort law should apply when a defective product poses a serious risk to other property or persons, but has caused only economic loss to the product itself); see also id. at 267 (noting that the plaintiffs do not allege that other property was damaged), and no other New Jersey court has done so either. Given the lack of a clear directive, [o]ur function is to look, as best we can, into the minds of the members of the [New Jersey] Supreme Court, and to ascertain their likely disposition of this case. Kramer v. Thompson, 947 F.2d 666, 677 (3d Cir.1991). Although this prediction is not an easy one, see Yohannon v. Keene Corp., 924 F.2d 1255, 1264 (3d Cir.1991) (noting [t]he inherently difficult task of predicting what a state supreme court will do when the state's decisional law is unclear on the point at issue), we do not write on an entirely blank slate. Based on the available case law in New Jersey, we are convinced that the New Jersey Supreme Court would not permit IFF to pursue its product liability claim under the circumstances presented here. While we have recognized that [t]he New Jersey Supreme Court has long been a leader in expanding tort liability[,] Hakimoglu v. Trump Taj Mahal Assocs., 70 F.3d 291, 295 (3d Cir.1995), we have also read Spring and Alloway as reflective of New Jersey's strong resistance to the usurpation of contract law by tort law: Spring Motors and Alloway reflect a deference to legislative will where the legislature has provided a comprehensive scheme controlling the relationship between the parties and, more specifically, a recognition of the importance of the allocation of risk of economic loss against the background of the rights and remedies provided by the U.C.C. ... [A]s far as parties (whether commercial or non-commercial) within the distribution chain of goods are concerned, the U.C.C. alone controls the liability of a seller of goods for economic loss arising as a result of a defect in those goods; there is, accordingly, no liability in a tort action whether it be one asserting strict liability or negligence. Paramount Aviation Corp. v. Gruppo Agusta, 288 F.3d 67, 73 (3d Cir.2002). Indeed, these principles are at the very root of the economic loss doctrine. See Werwinski v. Ford Motor Co., 286 F.3d 661, 680 (3d Cir.2002) (Pennsylvania law); Cooper Power Sys., Inc. v. Union Carbide Chems. & Plastics Co., Inc., 123 F.3d 675, 681-82 (7th Cir.1997) (Wisconsin law). In keeping with the purpose of the economic loss doctrine, New Jersey courts have consistently held that contract law is better suited to resolve disputes between parties where a plaintiff alleges direct and consequential losses that were within the contemplation of sophisticated business entities with equal bargaining power and that could have been the subject of their negotiations. See Alloway, 695 A.2d at 268, 275; Spring Motors, 489 A.2d at 666, 670-71; Dean, 968 A.2d at 203-04; Menorah Chapels at Millburn v. Needle, 386 N.J.Super. 100, 899 A.2d 316, 323-25 (2006); Goldson, 707 A.2d at 200. Here, the record is bereft of any indication that IFF and Dammann are anything other than sophisticated players on equal footing. Cf. Alloway, 695 A.2d at 268 (noting that nothing indicates that Alloway was at a disadvantage when bargaining for the purchase of the boat). Furthermore, the damages IFF alleges in its proposed product liability crossclaim include: the scrapping of contaminated finished flavoring products; claims from customers who bought those products; testing costs; plant cleaning costs; internal labor and administrative costs; and lost profits. (App. 303.) In Alloway, the New Jersey Supreme Court observed that economic loss encompasses actions for the recovery of damages for costs of repair, replacement of defective goods, inadequate value, and consequential loss of profits as well as the diminution in value of the product because it is inferior in quality and does not work for the general purposes for which it was manufactured and sold. 695 A.2d at 267 (quotation marks and citations omitted). Significantly, IFF's alleged damages fall squarely within the ambit of economic losses the Alloway Court described and that are generally regarded as both direct and consequential damages recoverable in contract. See Spring Motors, 489 A.2d at 665 (A direct economic loss includes the loss of the benefit of the bargain, i.e., the difference between the value of the product as represented and its value in its defective condition. Consequential economic loss includes ... indirect losses[.] (citation omitted)); see also 24 Richard A. Lord, Williston on Contracts § 64:12 (4th ed.2002) (defining general damages as damages that would follow any breach of similar character in the usual course of events and consequential damages as damages that ... were reasonably foreseeable or contemplated by the parties at the time the contract was entered into as a probable result of a breach). In fact, those damages are precisely the sort the U.C.C., as incorporated into New Jersey law, authorizes a buyer to recoup when a seller breaches a contract by selling a defective product. See N.J. Stat. Ann. § 12A:2-715 (defining incidental damages as, among other things, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach  and consequential damages as any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise[.] (emphasis supplied)). To allow IFF to pursue tort remedies for its alleged damages  damages for which the U.C.C. permits recovery and for which IFF could have contractually shielded itself  would effectively authorize duplicative recovery, a result the New Jersey Supreme Court has specifically criticized. See Alloway, 695 A.2d at 275 ([A] tort cause of action for economic loss duplicating the one provided by the U.C.C. is superfluous and counterproductive.). Moreover, the U.C.C.'s underlying purposes and policies[,] id. at 269, militate against the availability of a tort remedy for IFF's product liability claim. The availability of a tort remedy in a case such as this would encourage buyers like IFF to forgo contractual protection in exchange for a lesser purchase price. Such an approach would yield results that conflict with the economic loss doctrine's very purpose, as recognized in New Jersey jurisprudence. See, e.g., id. at 270 (Allowing recovery for all foreseeable damages in claims seeking purely economic loss, could subject a manufacturer to liability for vast sums arising from the expectations of parties downstream in the chain of distribution. (citation omitted)); Dean, 968 A.2d at 203 (By refusing to extricate parties from the bargains that they have struck, the economic loss rule encourages parties to consider the possibility that the product will not perform properly and either assign risk or negotiate the price accordingly. (quotation marks, alteration and citation omitted)). Such an outcome would also be particularly anomalous where, as here, the parties did in fact include such protection in their contract in the form of indemnification and warranty clauses, thus evidencing their ability to negotiate and to provide for the allocation of risk and the limitation of liability. Cf. Alloway, 695 A.2d at 269 (listing the various ways in which buyers and sellers may allocate risk and limit their liability under the U.C.C.); see also id. at 268 (noting that Alloway prudently protected himself against the risk of loss by obtaining an insurance policy that distributed that risk to his insurer). In sum, based on the trend in New Jersey jurisprudence, starting with Santor and followed by Spring Motors and Alloway, as well as the nature of the damages IFF alleges to have suffered, we predict that the New Jersey Supreme Court would bar IFF's product liability crossclaim under the economic loss doctrine. We find support for our conclusion in the law of other jurisdictions. Indeed, our reference to other jurisdictions for guidance in the absence of clear authority in New Jersey law is in harmony with the New Jersey Supreme Court's own approach under similar circumstances. See, e.g., Saltiel, 788 A.2d at 276-77; Cox v. RKA Corp., 164 N.J. 487, 753 A.2d 1112, 1118-27 (N.J.2000) (considering other jurisdictions' laws where there was no reported New Jersey case addressing the issue precisely); Thomas Group v. Wharton Senior Citizen Hous., Inc., 163 N.J. 507, 750 A.2d 743, 748-49 (2000) (similar). We note as well that, although perhaps not true in all instances, the New Jersey Supreme Court has frequently adopted what it has regarded as the majority rule among other jurisdictions when New Jersey law has not furnished a clear rule of decision. See, e.g., State v. Korecky, 169 N.J. 364, 777 A.2d 927, 933-34 (2001); Saffer v. Willoughby, 143 N.J. 256, 670 A.2d 527, 534 (1996); State v. Haliski, 140 N.J. 1, 656 A.2d 1246, 1252 (1995); Paul Revere Life Ins. Co. v. Haas, 137 N.J. 190, 644 A.2d 1098, 1105-06 (1994); Bandel v. Friedrich, 122 N.J. 235, 584 A.2d 800, 802-03 (1991); Kazmer-Standish Consultants, Inc. v. Schoeffel Instruments Corp., 89 N.J. 286, 445 A.2d 1149, 1152-53 (1982) (adopting and modifying the majority rule); Tortorello v. Reinfeld, 6 N.J. 58, 77 A.2d 240, 243-44 (1950); see also, e.g., W9/PHC Real Estate LP v. Farm Family Cas. Ins. Co., 407 N.J.Super. 177, 970 A.2d 382, 397-98 (2009); Custom Commc'ns Eng'g, Inc. v. E.F. Johnson Co., 269 N.J.Super. 531, 636 A.2d 80, 84 (1993). There exists a split of authority among other jurisdictions regarding the meaning of other property in the context of the economic loss doctrine. The majority of jurisdictions employ some variation of a test under which tort remedies are unavailable for property damage experienced by the owner where the damage was a foreseeable result of a defect at the time the parties contractually determined their respective exposure to risk, regardless whether the damage was to the `goods' themselves or to `other property.' Dakota Gasification Co. v. Pascoe Bldg. Sys., 91 F.3d 1094, 1099 (8th Cir.1996) (predicting that North Dakota would adopt the modern trend); see also Grams v. Milk Prods., Inc., 283 Wis.2d 511, 699 N.W.2d 167, 178 (2005); In re Consol. Vista Hills Retaining Wall Litig., 119 N.M. 542, 893 P.2d 438, 446 (1995); Neibarger v. Universal Coops. Inc., 439 Mich. 512, 486 N.W.2d 612, 620 (1992); Hapka v. Paquin Farms, 458 N.W.2d 683, 688 (Minn.1990); see also, e.g., Palmetto Linen Serv., Inc. v. U.N.X., Inc., 205 F.3d 126, 129-30 (4th Cir.2000) (interpreting South Carolina law); Redman v. John D. Brush & Co., 111 F.3d 1174, 1182-83 (4th Cir.1997) (interpreting Virginia law); see also Reeder R. Fox & Patrick J. Loftus, Riding the Choppy Waters of East River: Economic Loss Doctrine Ten Years Later, 64 Def. Counsel J. 260, 265 (1997) (noting the growing trend in many jurisdictions to interpret `economic loss' broadly to include damage that formerly was considered `other property' (footnote omitted)). The minority of jurisdictions have taken a different tack. See, e.g., Elite Prof'ls, Inc. v. Carrier Corp., 16 Kan.App.2d 625, 827 P.2d 1195, 1202 (1992) (holding that a trucking company could recover in tort for meat that spoiled when a refrigeration unit it had bought from the defendant malfunctioned because the meat constituted harm to property other than the refrigeration unit itself); Salt River Project Agric. Improvement & Power Dist. v. Westinghouse Elec. Corp., 143 Ariz. 368, 694 P.2d 198, 208 (1984) (holding that a plaintiff could pursue a strict liability tort claim against the manufacturer of a device, installed in a previously purchased turbine, that malfunctioned, causing the turbine to catch fire and be destroyed). The New Jersey Supreme Court's clear rejection of an approach that would allow tort law to substitute for contract law in cases involving sophisticated parties with equal bargaining power is strongly resonant of the rationale of those jurisdictions espousing the majority rule. In Grams v. Milk Products, Inc., for instance, the Wisconsin Supreme Court rejected the plaintiffs' proposal to adopt a new `bright line rule,' that physical damage to anything other than the product itself would be considered damage to `other property' and therefore subject to suit in tort[.] 699 N.W.2d at 178. The Wisconsin Supreme Court noted the plaintiffs' concession that their proposal would permit tort suits whenever damage extends beyond the physical dimensions of the purchased product. Id. The court declined to adopt such a rule because it would reject inquiry into the scope of the bargain and replace it with an overly formalistic distinction based on the kind of property harmed[,] ... would inevitably cause the erosion of the [U.C.C.,] and would undermine [t]he fundamental distinction between contract and tort[.] (internal quotation marks omitted). Similarly, in Neibarger v. Universal Cooperatives, Inc., the Michigan Supreme Court reasoned that [t]he proper approach requires consideration of the underlying policies of tort and contract law as well as the nature of the damages. The essence of a warranty action under the [U.C.C.] is that the product was not of the quality expected by the buyer or promised by the seller. The standard of quality must be defined by the purpose of the product, the uses for which it was intended, and the agreement of the parties. In many cases, failure of the product to perform as expected will necessarily cause damage to other property; such damage is often not beyond the contemplation of the parties to the agreement. Damage to property, where it is the result of a commercial transaction otherwise within the ambit of the [U.C.C.], should not preclude application of the economic loss doctrine where such property damage necessarily results from the delivery of a product of poor quality. 486 N.W.2d at 620 (footnotes omitted). Although by no means dispositive of our inquiry on its own, the fact that New Jersey courts have unequivocally stated their opposition to tort law's encroachment into the contractual domain fortifies the proposition that the New Jersey Supreme Court would endorse the view followed by the majority of jurisdictions. We recognize, of course, that New Jersey has a legislative mandate under the NJPLA to treat harm to other property differently from harm to the product itself, while the other property exception in many other jurisdictions is a creature of judicial making. See, e.g., Moransais v. Heathman, 744 So.2d 973, 979 (Fla.1999). We see no principled reason, however, why a legislatively-created other property exception should be interpreted any differently from its judicially-created counterpart. [8] In short, the progression in New Jersey case law from Santor to Spring Motors and Alloway offers compelling evidence that the New Jersey Supreme Court has plotted a course straight for some adaptation of the majority view but simply has not yet taken the final steps over the finish line. Cf. McKenna v. Ortho Pharmaceutical Corp., 622 F.2d 657, 662 (3d Cir.1980) ([R]elevant state precedents must be scrutinized with an eye toward the broad policies that informed those adjudications, and to the doctrinal trends which they evince. (footnote omitted)). IFF has shown us no relevant legal authority on the basis of which to conclude that New Jersey would shun the majority rule. [9] To support its view that the beans it bought from Dammann constitute the product itself while the vanilla extract and other flavoring products mixed with the beans to make the extract constitute other property, IFF points us to a series of cases from both the Supreme Court, see E. River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986); Saratoga Fishing Co. v. J.M. Martinac & Co., 520 U.S. 875, 117 S.Ct. 1783, 138 L.Ed.2d 76 (1997), and this Court, see Sea-Land Serv., Inc. v. Gen. Elec. Co., 134 F.3d 149 (3d Cir.1998); 2-J Corp. v. Tice, 126 F.3d 539 (3d Cir.1997). We reject IFF's reliance on these cases for several reasons. First, none of those cases construes New Jersey law, as we are bound to do in this case. ( East River and Saratoga were admiralty cases while Sea-Land and 2-J Corp. interpreted Pennsylvania law). Second, those cases are all component parts cases. In such cases, it is well-settled law that the buyer of a finished product cannot maintain a tort claim against the manufacturer if one of the finished product's components is defective and causes damage to other parts of the product. See, e.g., Easling v. Glen-Gery Corp., 804 F.Supp. 585, 590 (D.N.J. 1992) (holding that the plaintiffs, who bought a fully-built apartment complex and not a load of bricks, could not bring tort claims for damage caused by faulty bricks to the mortar or to other parts of the complex), cited with approval in Dean, 968 A.2d at 201. Significantly, IFF is not attempting to sue the manufacturer of one component of a vanilla bean. Rather, IFF wishes to sue the manufacturer of the entire vanilla bean. We think that factual distinction makes component parts cases legally inapposite to this case. Finally, to the extent IFF asks us to predict that the New Jersey Supreme Court would give the phrase other property in the NJPLA the inflexible definition IFF advocates, we decline to do so. As noted earlier, such an approach would promote the displacement of contract law by tort law, a result that the New Jersey Supreme Court has specifically disapproved and that we therefore must try to avoid in interpreting the NJPLA. One final thought deserves mention. As a federal court sitting in diversity, we are charged with predicting how another court  in this case, the New Jersey Supreme Court  would rule on the record presented to us. Because of the dearth of directly on-point New Jersey case law, this case represents yet another example of how difficult the predictive exercise can be. See, e.g., Dolores K. Sloviter, A Federal Judge Views Diversity Jurisdiction Through the Lens of Federalism, 78 Va. L.Rev. 1671, 1679-80 (1992) (cataloguing instances in which this Court has guessed wrong in spite of our best efforts to predict the future thinking of the state supreme courts within our jurisdiction on the basis of all of the available data). Given that difficulty, in reaching our conclusion we have exercised restraint in accordance with the well-established principle that where two competing yet sensible interpretations of state law exist, we should opt for the interpretation that restricts liability, rather than expands it, until the Supreme Court of [New Jersey] decides differently. Werwinski, 286 F.3d at 680 (citations omitted). [10] To hold here, as IFF urges, that the NJPLA governs its product liability crossclaim would undoubtedly subject manufacturers and dealers to greater liability than does our conclusion that the economic loss doctrine precludes that crossclaim. Given the muddled state of New Jersey law on this point, we must decline IFF's invitation. To the extent our conclusion enlarges the scope of contract liability at the expense of tort liability, we believe that approach to be consonant with the direction of available New Jersey law. Because we predict that the New Jersey Supreme Court would hold that IFF's product liability crossclaim for what is clearly economic loss sounds in contract is therefore barred by the economic loss doctrine, we hold that the District Court did not abuse its discretion in denying IFF's request with respect to that crossclaim and will affirm its ruling in that respect.