ultrahazardous activity

American Cyanamid Company, a chemical manufacturer, loaded 20,000 gallons of liquid acrylonitrile into a leased railroad tank car at its plant in Louisiana on January 2, 1979. The following day, a Missouri Pacific Railroad train picked up the car for transport to a Cyanamid plant in New Jersey. The car arrived at the Blue Island railroad yard operated by Indiana Harbor Belt Railroad Company, a switching line in the Chicago metropolitan area, on the morning of January 9, 1979. Several hours after arrival, employees noticed fluid gushing from the bottom outlet of the car due to a broken lid. After two hours, the leak was stopped, but approximately 5,000 gallons of acrylonitrile had spilled. Local authorities evacuated nearby homes for a few hours. The Illinois Department of Environmental Protection ordered decontamination measures that cost the switching line $981,022.75. Indiana Harbor Belt Railroad filed a two-count complaint against American Cyanamid in federal district court. One count alleged negligence in maintaining the tank car. The other count alleged strict liability for engaging in an abnormally dangerous activity by shipping the chemical through a metropolitan area. The district court granted summary judgment to the plaintiff on the strict liability count for $981,022.75. The court later dismissed the negligence count with prejudice to permit an appeal. The case reached the United States Court of Appeals for the Seventh Circuit after an initial appeal was dismissed for lack of finality under Federal Rule of Civil Procedure 54(b). The district judge then dismissed the negligence claim to create a final judgment. The switching line cross-appealed the dismissal of the negligence count.

On July 22, 1981, a fire began in the Port Newark freight yard of defendant Consolidated Rail Corporation when ethylene oxide manufactured by defendant BASF Wyandotte Company escaped from a tank car owned by defendant Union Tank Car Company and leased to BASF. The tank car was punctured during a coupling operation with another rail car and ignited. The municipal authorities evacuated the area within a one-mile radius surrounding the fire, which included the North Terminal building of Newark International Airport where plaintiff People Express Airlines’ business operations are based. People Express employees were prohibited from using the North Terminal for twelve hours, although the feared explosion never occurred. The plaintiff contends that it suffered business-interruption losses as a result of the evacuation. These losses consisted of cancelled scheduled flights and lost reservations because employees were unable to answer the telephones to accept bookings. Fixed operating expenses allocable to the evacuation period were incurred and paid despite the offices being closed. No physical damage to airline property and no personal injury occurred. According to the original complaint, each defendant acted negligently and these acts proximately caused the plaintiff’s harm. An amended complaint alleged additional counts of nuisance and strict liability. Conrail moved for summary judgment. The trial court granted the motion on the ground that absent property damage or personal injury economic loss was not recoverable in tort. The trial court also granted summary judgment motions by BASF and Union Car on the same reasoning. The Appellate Division reversed the trial court’s order granting summary judgment and remanded the cause to the trial court. This Court granted defendant Union Car’s petition for certification, in which Conrail and BASF joined. Plaintiff asserted at oral argument that at least some of the defendants were aware from prior experiences that ethylene oxide is a highly volatile substance. Further, emergency response plans in case of an accident had been prepared. When the fire occurred that gave rise to this lawsuit, some of the defendants’ consultants helped determine how much of the surrounding area to evacuate.

B. W. Foster owned a mink ranch located in a rural area one and one-half miles east of North Bend in King County, Washington. The ranch occupied seven and one-half acres and included seven sheds housing mink in welded wire cages with wood roofs. The property sat about two blocks from U.S. Highway No. 10 and near Northern Pacific Railway tracks and Chicago, Milwaukee, St. Paul & Pacific Railroad tracks. Preston Mill Company engaged in logging operations in the adjacent area. Early in May 1951, the company began constructing a road approximately two and one-quarter miles southwest of the mink ranch and twenty-five hundred feet above it along Rattlesnake Ledge. To build the road, the company used explosives, setting off blasts twice daily at noon and the end of the workday, with charges usually limited to fifty pounds and occasionally reaching one hundred pounds. The whelping season for mink begins about May 1 and lasts about two and one-half weeks, during which mothers are highly excitable and may kill their kittens if disturbed by noises or vibrations. Roy A. Peterson, the ranch manager, observed that the blasting caused tremendous vibrations that rattled boxes on the cages, leading mother mink to run back and forth and kill their young. Before the season progressed far, thirty-five or forty kittens had been killed. Peterson informed the manager of Preston Mill Company about the losses. Although no request was made to stop the blasting, the company reduced the amount of explosives per shot from nineteen or twenty sticks to fourteen sticks. Officials of the company noted that halting road construction during the whelping period would have been impractical due to scheduling and expense concerns. Foster filed suit against Preston Mill Company seeking damages only for losses occurring after the company received notice of the effects on the mink. After a trial to the court without a jury on a second amended complaint alleging absolute liability and alternatively nuisance, the trial court entered judgment for Foster in the amount of $1,953.68 based on absolute liability for post-notice damages. The court found no public nuisance, and Foster conceded that the trial court had ruled in the company's favor on the nuisance claim. Preston Mill Company appealed the judgment.