The opinion of the court was delivered by: GREEN
This matter is before the Court on plaintiffs' motion to expand the certified classes and to amend this Court's order on the motion to dismiss to include purchasers of subject Ford vehicles in New Jersey; defendant's opposition thereto; plaintiffs' reply to defendant's opposition, and the entire record herein. For the reasons set forth below, the Court grants plaintiffs' motion.
On March 28, 1985, the New Jersey Supreme Court issued a decision in Spring Motors Distributors, Inc. v. Ford Motor Co., 98 N.J. 555, 489 A.2d 660 (1985). That case held specifically that where "a commercial buyer seeks damages for economic loss resulting from the purchase of defective goods [he] may recover from an immediate seller and a remote supplier in the distribution chain for breach of warranty under the U.C.C." Id. at 663. The court in Spring Motors further held "that the buyer need not establish privity with the remote supplier to maintain an action for breach of express or implied warranties." Id.
Plaintiffs aver that this holding by the New Jersey Supreme Court effectively eliminates the requirement of vertical privity for claims of breach of implied warranty under the Uniform Commercial Code ("U.C.C."). They further argue that in light of the decision in Spring Motors, this Court should amend its decision on defendant's motion to dismiss, see Walsh v. Ford Motor Co., 588 F. Supp. 1513 (D.D.C. 1984), to reflect the fact that New Jersey no longer requires the presence of vertical privity to pursue claims of breach of implied warranty. Finally, plaintiffs move to have this Court amend its decision on defendant's motion to dismiss to include those named plaintiffs who purchased their vehicles in New Jersey and were found originally not to have a valid claim for breach of implied warranty because of the lack of vertical privity.
In examining the decision in Spring Motors, the Court agrees with plaintiffs' conclusion that the New Jersey Supreme Court effectively abolished the requirement of vertical privity between a buyer and supplier or manufacturer for claims for breach of implied or written warranties.
In opposition to plaintiffs' motion, defendant argues that the decision in Spring Motors is not applicable to the present action.
Defendant first argues that the Spring Motors decision is limited in application to only commercial purchasers and not consumers. The Court declines to read that decision so narrowly. The holding in the case is not limited to abolishing vertical privity for merely commercial buyers. Because the decision involves a commercial buyer with claims against a remote supplier, that court naturally applies its reasoning to the parties that are before it. The decision in Spring Motors specifically states:
We conclude that the absence of privity between a remote supplier and ultimate purchaser should not preclude the extension to the purchaser of the supplier's warranties made to the manufacturer. We reach that conclusion notwithstanding our recognition that the Code generally applies to the parties in privity . . . and that no privity exists between [plaintiff] and [defendant].
Spring Motors Distributors v. Ford Motor Co., 489 A.2d at 674 (citations omitted).
a plaintiff in a suit for breach of warranty against a remote seller, like a plaintiff in a strict liability action, need not establish privity with or negligence by the defendant. To this extent, our recognition of a warranty action for economic loss by a commercial buyer parallels our recognition in Santor1 of a similar claim by a consumer. One significant difference, of course, is that the plaintiff in a warranty action need not establish the existence of a defect; the failure of the goods to perform as warranted is sufficient. By bringing the action within the ambit of the Code, we believe we come closer to fulfilling the expectations of the parties and the intention of the Legislature that the Code [not claims arising under Tort] shall govern commercial transactions.
This language recognizes that claims of economic loss should arise properly under U.C.C. warranty law and not be transformed into actions arising under strict liability in tort. This is particularly true when applied to commercial transactions. By eliminating the requirement of vertical privity in U.C.C.-based claims, the court appears, in turn, to eliminate the need to convert claims of economic injury or property damage from genuine contract-based claims to claims arising in tort. What this decision leaves open is whether a consumer may continue to pursue breach of warranty claims for economic injury arising in tort, now that a means has opened to pursue these claims under the U.C.C. without regard to the issue of privity.
Although the Spring Motors decision is couched in terms of "commercial buyer" transactions, the Court does not read the holding so narrowly. The New Jersey Supreme Court, through its decision in Spring Motors, seems intent to expand potential claims for breach of warranty for economic loss while at the same time placing correctly these causes of action in the "appropriate vehicle for resolving commercial disputes arising out of business transactions between persons in a distribution chain." Id. at 668. The Court can find no justification for concluding that this decision is limited exclusively to commercial purchasers. It ...