Port Authority of New York & New Jersey v. Arcadian Corp.

Facts

In New York City, on February 26, 1993, terrorists detonated a bomb under the World Trade Center, which resulted in six deaths, multiple injuries, and substantial property damage. The bomb was made with fertilizers, such as ammonium nitrate, urea, and nitric acid, which was manufactured by Arcadian Corporation, Hydro-Agri North America, Inc., and Dyno Nobel Inc. (collectively, defendants). Generally, the fertilizers, in their raw, single composition, were not dangerous. However, when the fertilizers are combined, their explosive character is created. The owner of the World Trade Center, Port Authority of New York & New Jersey (plaintiff) brought suit against defendants on the grounds of negligence, strict products liability, and failure to warn. Plaintiff contended that defendants could have labeled their products non-detonable and, at the same time, warned sellers to make sure that the products were being purchased for proper use. Plaintiff asserted that defendants should have known or knew that the products may be used to make explosive materials because of two explosions were previously cause by ammonium nitrate about thirty years ago and because several foreign countries regulate the products due to their explosion-producing characteristics. A federal district court dismissed Plaintiff’s complaint for the failure to state of a cause of action. Plaintiff appealed.