OPINION OF THE COURT
The plaintiff, Henry Heide, Inc. (“Heide”), appeals from an order of the district court granting a summary judgment dismissing its claims against defendants Sterilite Corporation (“Sterilite”) and Dow Chemical Company (“Dow”). This order was made final pursuant to Federal Rule of Civil Procedure 54(b). Another defendant, WRH Products Co., Inc. (“WRH”), appeals from an order of the district court granting a summary judgment dismissing its cross-claims against Sterilite and Dow. This order was also made final pursuant to Rule 54(b). This court has appellate jurisdiction under 28 U.S.C. § 1291 (1982).
I.
The following facts are stipulated or undisputed. In 1973, Heide bought some 23,-000 plastic trays from WRH. WRH designed the trays, but had contracted their manufacture to Sterilite. Sterilite purchased the plastic used in the trays from Dow.
Heide, a New Jersey candy manufacturer, used the trays in its manufacturing process which included drying the candy on the trays at relatively high heat. Prior to contracting to purchase the trays, Heide received from WRH at different times two sets of sample trays which it tested. The first set warped, possibly from the heat in the drying stage. Approximately one month later, WRH delivered a second set of samples. Heide tested this set and found them acceptable. Heide then contracted with WRH to purchase some 23,000
After negotiations failed, Heide commenced this action against WRH, Sterilite and Dow alleging claims based on breach of warranty, negligence, and strict liability. WRH cross-claimed against Sterilite and Dow for indemnity and contribution. After extensive discovery, the case reached the summary judgment stage. The district court dismissed all of Heide’s claims except for a single claim against WRH for breach of warranty by sample. The district court later dismissed all of WRH’s cross-claims against Sterilite and Dow. These appeals then followed.
On a review of a summary judgment, we do as the district court was required to do: we determine whether the record as it stands reveals any disputed issue of material fact, assume the resolution of any such issue in favor of the non-movant, and then determine whether the movant is then entitled to judgment as a matter of law.
First Jersey National Bank v. Dome Petroleum Limited,
II. Personal Jurisdiction Over Sterilite
As a preliminary matter, Sterilite claims, as it did in the district court, that the district court lacked in personam jurisdiction over it. Assuming that Sterilite may advance this issue on this appeal without cross-appealing, we hold that the district correctly determined that jurisdiction existed.
Under Rule 4(e) of the Federal Rules of Civil Procedure, the district court had jurisdiction over Sterilite if a New Jersey state court would have had jurisdiction. In New Jersey, the state courts have jurisdiction over all foreign corporations to the extent consistent with due process of law. N.J. Civ.Prac.R. 4:4-4.
Due process requirements are satisfied if Sterilite has “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ”
International Shoe Co. v. Washington,
In this case, the litigation is specifically related to Sterilite’s contacts with New Jersey. Sterilite knew that Heide was the ultimate purchaser of the trays. It shipped the trays directly from its factory in Massachusetts to Heide’s plant in New Jersey. Sterilite’s president and chief engineer traveled to New Jersey and met with Heide’s representatives in connection with this sale, and was aware of the problems that Heide had with the trays. It was clearly foreseeable that if there was litigation over the trays, it would occur in New Jersey. Sterilite’s “conduct and connection with the forum State are such that [it] should reasonably anticipate being haled into court there.”
World-Wide Volkswagen Corp. v. Woodson,
III. Heide’s Claims Against Sterilite and Dow in Strict Liability and Negligence
Heide asserts that it may sue Sterilite, the manufacturer of the tray, and Dow, the supplier of the plastic resin, under theories of strict liability and negligence. The district court held that New Jersey law would
Subsequent to the commencement of this appeal, the New Jersey Supreme Court rendered an opinion on these issues. It stated:
We hold that 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 distribution chain for breach of warranty under the U.C.C., but not in strict liability or negligence. We hold also that the buyer need not establish privity with the remote supplier to maintain an action for breach of express or implied warranties.
Spring Motors Distributors, Inc. v. Ford Motor Company,
As a federal court exercising diversity jurisdiction we are bound to follow the law of the forum state as expressed by the
highest court of that state. The facts of this case fall squarely within the holding of Spring Motors. Heide’s claimed injuries are economic losses caused by a defective product. Heide, WRH, Sterilite, and Dow are all commercial entities that the record clearly shows were able to bargain on equal footing. Accordingly, Heide’s claims against Dow and Sterilite in negligence and strict liability were correctly dismissed.
Heide, however, maintains that it still may assert claims for misrepresentation against Sterilite. The only misrepresentation claim that Heide asserted in the district court was a claim for negligent misrepresentation, not fraud. Heide, therefore, on this appeal may only contest the dismissal of the claim for negligent misrepresentation.
The basic rationale of
Spring Motors
is that the U.C.C. provides an adequate and integrated set of rights and remedies for disappointed commercial buyers of goods.
[T]he U.C.C. “is generally regarded as the exclusive source for ascertaining when a seller is subject to liability for damages if the claim is based on intangible economic loss not attributable to physical injury to person or harm to a tangible thing other than the defective product itself.”
IV. Heide’s Claims For Breach of Warranty
Heide never directly contracted with the manufacturer, Sterilite, or the supplier of the plastic resin, Dow. Heide, however,
In
Spring Motors Distributors, Inc. v. Ford Motor Company,
Even if their warranties extend to Heide, Sterilite and Dow contend that Heide has no valid claim for breach of warranty. They contend that all implied warranties are excluded because Heide tested the trays before purchasing them, and that neither Sterilite nor Dow gave any express warranties on their products.
A. Implied Warranties.
Sterilite and Dow argue that under the N.J.S.A. 12A:2-316(3)(b) (1962), Heide lost all implied warranties when it tested the trays to its own satisfaction prior to purchase. N.J.S.A. 12A:2-316(3)(b) provides that:
when the buyer before entering into the contract has examined the goods or the sample or model as fully as he desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to him.
Heide argues that this section applies only to implied warranties that were given directly to it by WRH, and not to implied warranties from Sterilite or Dow that it may claim as a third party beneficiary. The parties point to no New Jersey case law on this issue.
Upon examination of the policies that underlay section 2-316(3)(b) of the U.C.C., we believe that if a buyer undertakes a reasonable examination of the goods, he is precluded from asserting a claim for breach of implied warranty against anyone who was responsible for a defect that the buyer ought, in the circumstances, to have noticed. The concept of
However, although we have determined that N.J.S.A. 12A:2-316(3)(b) may apply to bar Heide’s claims against sellers with which it was not in privity, we cannot determine at this procedural stage whether the defect in the trays ought to have been revealed in the testing of the second sample. Thus, we cannot here determine whether Heide’s claims in implied warranty are excluded by N.J.S.A. 12A:2-316(3)(b). We say this because there is a disputed question of fact as to whether Heide ought to have noticed a defect in the trays through its testing procedure. Heide has presented evidence to suggest that it should not be charged with notice of the defect. Thus, there is evidence to support that the defect in the trays became apparent only after several weeks of use. App. at 147. There is further evidence to suggest that a test by Heide lasting several weeks would have been unreasonable. App. at 105-06 (Peter Heide Aff.). Section 12A:2-316(3)(b) does not exclude warranties for defects that would be revealed only under unreasonably stringent tests.
Sterilite and Dow contend that Heide was clearly on notice of the defect because Heide ordered the trays despite noticing a slight deformation of the trays after testing the second set of samples. Heide, however, claims that it had been led to believe that the plastic would “set” and would not continue to deform. App. at 105-06 (Peter Heide Aff.). Thus, Heide was not necessarily on notice from the results of the second test that the trays were defective. We, therefore, conclude that Heide’s claims against Sterilite and Dow based on implied warranties must be remanded to the district court for an appropriate resolution as to whether N.J.S.A. 12A:2-316(3)(b) bars Heide’s claim, and if not, whether any implied warranty was breached.
B. Express Warranties.
1. Sterilite.
Heide claims that Sterilite breached an express warranty by sample. Heide argues that since Sterilite’s contract to manufacture the trays was subject to the approval of a sample provided by Sterilite to WRH, which was in turn given to Heide, the manufacturing contract was based on a sale by sample. Heide thus argues that Sterilite warranted to WRH that the final production trays would conform to the sample given to WRH, and that Heide has the benefit of this warranty as a third-party beneficiary.
Sterilite denies that it gave such a warranty. There, is some evidence to support Heide’s factual contentions that Sterilite’s contract was based upon the acceptance of the sample tray. The deposition testimony of Sterilite’s chief engineer indicates that Sterilite was aware of the contingent nature of WRH’s sale to Heide, and that Sterilite would not begin shipping of the trays until the sample was approved. App. at 626-27. Thus, we cannot determine, as a matter of undisputed fact, that Sterilite did not give an express warranty by sample.
Sterilite further contends that even if there were a warranty, the evidence shows that there was no breach since it is stipulated that the trays sold to Heide were made of the same materials and from the same mold as the sample trays. App. at 144-45. However, the district court found, and we agree, that there is a disputed question of fact as to whether the trays sold to Heide conformed to the sample. The record shows that the second sample passed Heide’s tests, and that the later trays did not stand up to Heide’s production process. Further, there is evidence that there were some modifications in the manufacturing process between the time of
2. Dow.
Heide claims that Dow gave an express warranty to Sterilite through a product specification sheet which listed several physical properties of the Dow plastic. Heide further asserts that Dow breached this express warranty when the resin it provided failed to meet the specifications on the sheet. Dow denies that the product specification sheet was a warranty. It claims that the stipulated facts show that there was no reliance upon the product specification sheet by Sterilite in choosing the plastic, and therefore, the sheet was not a basis for the bargain. N.J.S.A. 12A:2-313 (1962).
The parties stipulated:
Because of recognized deviations in the actual industrial application of the product as opposed to results obtained under strictly controlled laboratory testing, the determination of the plastic to be used in molding is based upon ... the testing of samples by the ultimate user and not on information contained on a Product Information Sheet.
App. at 128. The facts as stipulated show that the product specification sheet was not the basis of any bargain between Dow and Sterilite. Dow gave no express warranty in this case that the resin would conform to the product specification sheet, and thus Heide cannot be the beneficiary of any such warranty.
V. WRH’s Cross-Appeal
WRH claims that if it is liable to Heide, Sterilite and Dow are liable to it for contribution under the New Jersey’s Joint Tort-feasors Contribution Act or for common law indemnification. The district court dismissed both cross-claims without explanation. Because Sterilite and Dow are not liable in tort,
Spring Motors Distributors, Inc. v. Ford Motor Company,
Common law indemnification, under New Jersey law, is available as between parties in a product distribution chain if the party claiming indemnity was not at fault and the party against whom indemnity is claimed was responsible for the defect in the product.
Newmark v. Gimbel’s Incorporated,
On this record, it is not entirely clear where the fault, if any, lies among Sterilite, Dow, and WRH for purposes of indemnification. We therefore cannot affirm the summary judgment dismissing WRH’s claim for indemnity. This claim will be remanded to the district court for appropriate disposition.
WRH also contends that this court has jurisdiction to decide issues as between Heide and WRH. However, only the judgment dismissing Sterilite and Dow was made final under Rule 54(b). We have no jurisdiction to decide claims that are not incorporated in a final judgment. All issues relating to the claims between Heide and WRH remain interlocutory and are subject to revision by the district court.
VI. Conclusion
We will affirm the judgment of the district court insofar as it dismisses the claims and cross-claims against Dow and Sterilite based on theories of negligence and strict liability. We will also affirm the judgment of the district court insofar as it dismisses