SILIPENA et al v. AMERICAN PULVERIZER COMPANY et al

Filing 377

MEMORANDUM OPINION. Signed by Judge Joseph H. Rodriguez on 3/31/2023. (alb, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
EDWARD SILIPENA, et al.,
Plaintiffs,
v.

:

Hon. Joseph H. Rodriguez

:

Civil Action No. 16-711

:
:

AMERICAN PULVERIZER CO., et al.,

:

Defendants.

MEMORANDUM OPINION

:

Presently before the Court are two motions seeking permission to file
supplemental materials by Plaintiffs 1. The present motions bear on pending dispositive
motions before the Court. First, Plaintiffs seek to supplement the record [Dkt. No. 361]
with a press release entitled “Eriez Releases New White Paper on Process to Upgrade
Zurik to Zorba to Increase Profitability and Reduce Fire Risk” (Fidanza Cert., Dkt. No.
361-3, Exhibit A, “Press Release”). The White Paper referenced in the Press Release is
entitled “Processing Zurik to Zorba” (“White Paper”). The White Paper is publicly
available on Defendant Eriez’s website and only recently discovered by Plaintiffs; it was
not part of the discovery process because it was published in early 2022. (See id., ¶¶ 46).
Plaintiffs argue that pronouncements in the White Paper article bear directly on
the seminal claims in this case because the publication endorses that Zurik piles
1

Plaintiffs are Edward Silipena and Joseph F. Silipena (the "Silipena Brothers"), American Iron & Metal
International, LLC (“AIMI”), American Auto Salvage and Recycling, Inc. (“AASR”), Silipena Realty, LLC,
and LJE Associates, LLC. The Silipena Brothers’ family business has spanned several generations and
experienced growth in terms of business and business offerings. In short, the business started as a gas
station and garage and evolved to include wholesale and retail auto salvage and used auto parts business.
See ¶2. Am. Compl. In 2010, the Silipena business portfolio expanded again to include “an entirely new
business venture into the unfamiliar area of fully integrated: collection, salvage, shredding and recycling
of scrap metal materials and automobiles into saleable scrap metal.” Id.

1

“generate heat and are widely believed to be on one of the main causes of fires in scrap
yards nationwide....” (Fidanza Cert., Processing Zurik to Zorba-White Paper, Dkt. No.
361-3, Ex. B, p. 1.) Because the White Paper considers issues probative of the cause of
the catastrophic fire at Plaintiffs’ business and was not produced in discovery, Plaintiffs
seek to include the publication as part of the record. All the Defendants object. 2
Plaintiffs separately move to supplement the briefing as to certain Defendants’
pending dispositive motions. (Dkt. No. 370). The proposed supplemental briefing
addresses the impact of recent New Jersey Supreme Court jurisprudence in Schwartz v.
Menas, 251 N.J. 556, 279 A.3d 436 (2022) on the issues before the Court in Defendants'
Joint Motion to Preclude the Testimony of Christopher Brophy (Plaintiffs’ damages
expert), [Dkt. No. 231], Pulverizer's Motion for Summary Judgment, [Dkt. No. 229],
and (3) Hustler's Motion for Summary Judgment, [Dkt. No. 227]. Plaintiffs contend
that Schwartz expressly rejects Defendants’ contention that Plaintiffs cannot recover
lost profits damages because their business, AIMI, is "new." Schwartz appears to
challenge Defendants’ argument that the New Business Rule ("NBR") forecloses
recovery, given the Court’s holding.
The Court notes that as to the supplemental briefing addressing Schwartz,
Plaintiffs’ moving and reply briefs and Defendants’ opposition briefs all advanced their

2

Each defendant offers an opposition brief and expresses common arguments to foreclose the White
Paper’s inclusion in the record. See Eriez Manufacturing Company Opp. Br. [Dkt. No. 365], Pinnacle
Engineering, Inc. Opp. Br. [Dkt. No. 366], American Pulverizer Company and Hustler Conveyer Co. Opp.
Br. [Dkt. No. 367], Cooper & Associates, LLC Opp. Br. [Dkt. No. 368]. These arguments will be discussed
in detail, but in general terms, all defendants contend that the White Paper discusses a new process to
upgrade the wasted Zurik and this process was not known at the time of the fires. For this reason, the
White Paper is not relevant to the Defendants state of mind at the time the System was designed and sold
and is also evidence of a subsequent remedial measure and, therefore, inadmissible pursuant to Fed. R.
Evid. 407.

2

positions related to the New Jersey Supreme Court’s decision in Schwartz and its
prospective impact on the pending motions. All that is left for the Court to do is to
address these arguments as they relate to the pending dispositive motions. In so far as
the Defendants attempt to square Schwartz with the pending issues, it appears that they
abandon the challenge to Plaintiffs’ damages expert, Christopher Brophy on the basis
that his opinion is at odds with the New Business Rule. Defendants note that there are
several reasons, apart from Schwartz, to preclude Brophy’s testimony including their
objections stating Brophy’s report is speculative, legally insufficient and unreliable.
Therefore, the Court will consider the arguments, including the impact of Schwartz, in
its forthcoming decision on the Motion to Preclude the Testimony of Christopher
Brophy, without leave to file additional briefing on Schwartz and will grant the motion
to supplement the briefing to include the arguments related to Schwartz. 3
Next, the Court will address the motion to supplement the record to include the
White Paper. Because the Court writes for the benefit of the parties, it will summarize
the large record and issues underscoring the propriety of permitting factual
supplementation at this stage in the litigation.
I.

General Background

In general terms, this matter arises from two catastrophic fires that Plaintiffs
allege caused millions in damages and resulted in the total loss of their business in

3

Defendants’ opposition briefs essentially argue that the application of the “New Business Rule” in the
analysis of the deficiencies of the lost profits calculations for AIMI was only one (1) of six (6) independent
bases for barring Damages Expert Christopher Brophy’s testimony on that issue, and only one (1) of
twelve (12) arguments raised in those motions. Thus, the Schwartz decision is of minimal impact on
Defendants’ motions to Preclude the Testimony of Christopher Brophy, [Dkt. No. 231]. The Court will
consider Defendants’ objection arguments in substantive part on consideration of the Motion to Strike
Damages Expert Brophy’s testimony.

3

Millville, New Jersey. 4 Plaintiffs’ modern business venture started as a scrap metal
recovery business and progressed into a sophisticated metal recycling business. During
this transition, Plaintiffs’ portfolio came to include an indoor shredding and sorting
metal recycling facility. (Am. Compl. at ¶¶33-34). Essentially, the scrap metal generated
from its initial junk yard business, where motor vehicles and other metal products were
collected, was “sold” to its new business and those materials were reduced further and
sorted for sale to separate third party businesses. (Golden Cert., Dkt. No. 229-5, Ex. I, E.
Silipena Dep. at 31:3-13). Plaintiffs allege certain defects in the automobile shredding
and sorting system (the “System”) caused the fire at Plaintiffs’ Millville, New Jersey
facility. The fires at Plaintiffs’ facility allegedly originated in a pile of “Zurik,” a known
metallic byproduct of the System. Plaintiffs allege that that Defendants defectively
designed the System and seek to prosecute their case by demonstrating, inter alia,
Defendants’ awareness that Zurik posed a fire risk and then failed to accommodate that
risk in the design and installation process.
Plaintiffs bring claims against five defendants: American Pulverizer Company,
Hustler Conveyor Company, Pinnacle Engineering, Inc., Cooper & Associates, LLC, and
Eriez Manufacturing Company. (See generally Am. Compl.) Plaintiffs’ claims include
product liability, negligence, breach of contract, breach of warranty, and breach of the
implied covenant of good faith and fair dealing. (Id.) In the Complaint, Plaintiffs allege
that absent the defects in the System and other failures of Defendants to perform their

The first fire occurred on April 22, 2012, and the second occurred on December 8, 2012. Only the April 2012 fire is
at issue in this case. Plaintiffs’ motion to file a Second Amended Complaint to add the December 8 fire to their
complaint was denied on March 17, 2019. (Dkt. No. 143).

4

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duties, the fire occurring at their facility would not have occurred nor the resulting sale
of the businesses and other damages. (Id.) 5
Defendants’ chief argument in defense of these claims finds roots in the nature
and scope of the then known fire risk posed by Zurik and its tenuous link to the fire at
Plaintiffs’ facility. Defendants state that the link between Zurik and the fire is absent, or
at best, overstated. Significant discovery has been taken on these claims and the matter
is ripe for summary judgment. However, Plaintiffs now seek to introduce a publication
authored by Defendant Eriez’ corporate designee which portends to undermine
Defendants’ defense. In February 2022, Defendant Eriez published and widely
circulated the White Paper which examines several characteristics of Zurik, including a
statement that Zurik piles “generate heat” and cause fires. No one disputes the contents
of the White Paper; the tension centers on the White Papers’ relevancy and
admissibility.
The White Paper is a relatively short document. It both describes and then
markets a new method for recycling Zurik and showcases the accompanying equipment
Eriez uses to "efficiently upgrade Zurik to a more desirable and profitable Zorba fraction
while also reducing scrapyard fire hazards." (See Eriez Opp. 365-3, Ex. B, p. 1). In so
doing, the publication reconciles the otherwise low-value nature of Zurik and the risks
associated with Zurik stockpiles with the advantages of utilizing Eriez’ new valueenhancing method:
For more than a decade, car shredding operations have used sensor-based
sorting equipment to detect and reject stainless steel, circuit boards and
5

Plaintiffs’ AIMI business contracted with Defendant American Pulverizer to design and install the
System. To do this, American Pulverizer used equipment manufactured by its sister company, Defendant
Hustler Conveyor Company. In addition, American Pulverizer incorporated "component parts" sold by
Defendant Eriez to Hustler.

5

other metals missed by upstream eddy current systems from the final
waste product before debris is sent to the landfill. This product is
commonly referred to as Zurik. The nature of Zurik is created when the
sensor machines misplace a sizable percentage of debris along with the
desired metal product. The result is a low-grade co-mingled material
which can be difficult to market. By using the Zurik to Zorba process, we
can increase the value of the Zurik by transforming it into a high-grade
Zorba product without debris. Another significant advantage is that
separating hot metal from the debris reduces the risk of fires originating in
Zurik stockpiles.
.
.
.
By processing Zurik into Zorba, a processor transforms difficult to market,
low-value Zurik that generates fire hazards into a high grade, highly
sought-after and copper-rich Zorba. This copper-rich Zorba commands a
higher price than standard Zorba, which is also easier to market and sell.
Id.
The author of the “White Paper,” Mike Shattuck (“Shattuck”), is Eriez’ corporate
designee and was deposed pursuant to Rule 30(b)(6). (Hanson Cert., Dkt. No. 365, Ex.
E, pp. 69-72;106; Dkt. 235-2, ¶ 5; Dkt. 235-11, pp. 5-6.) Plaintiffs claim that the White
Paper is relevant not because it explains a new process and identifies equipment used by
Eriez to convert Zurik into a more valuable byproduct called “Zorba,” but because Eriez
has publicly conceded facts critical to this litigation, namely that Zurik generates heat
and causes fires. These concessions inform and are relevant to the pending dispositive
motions. Alternatively, Plaintiffs claim that Eriez, while defending itself in this case,
seeks to downplay the risk of fires caused by Zurik while transparently seeking to
capitalize on those very risks by inducing commercial sales to mitigate them.
Defendants oppose Plaintiffs’ Motion to Supplement on several grounds. First,
the White Paper was published in February 2022 and is therefore not “new” evidence.
Second, Shattuck testified at deposition regarding Eriez' knowledge of the fire risks at
metals recycling centers, including Zurik bins.
6

Q. Okay. So was Eriez aware of any fires that originated in zurik
bins prior to the installation of the shredding sorting system at
Plaintiffs' facility?
A. [W]e've always heard of fires in zurik bins.
[Hanson Cert. Dkt. No. 365, Ex. E. at 1 :1-5].
Q. If Eriez equipment does not sort the ASR in the manner in which it's
supposed to, okay, could that leave combustible material along with, for
example, fluff in an output bin?
A. If there's something that's combustible going to the ProSort -- or the
sorter, okay, and it's going to end up in the zurik or the fluff pile, either
way they can both catch on fire. So if the ProSort is installed and it's
working exactly right, the fire is probably going to end up in the zurik pile,
because that's going to move the hot material to the zurik pile. If there is
no ProSorter or any other sorter present, that's all going to go to the fluff
pile. So all we're doing is moving the piece of metal from one bin to the
next. So it's not going to prevent any fires. It may move a fire from one bin
to the other, depending on how it sorts, but it's not -- doesn't have
anything to do with -- if it's hot coming in, it's going to be hot going out. If
it's on fire coming in, it's going to be on fire going out.
[Id. at 163:3-24].
Similar testimony is set forth in Plaintiffs’ Statement of Undisputed Material
Facts as evidence that Eriez had knowledge of fire risks dating back to 2011. In addition,
the White Paper was published eleven years after Defendant Eriez sold the component
part of the System to Hustler and is at best a description of an inadmissible “remedial
measure” pursuant to Fed. R. Evid. 407. For these reasons, Defendants claim that not
only does the White Paper present no new evidence concerning the risk of fire in a Zurik
bin, but it also describes and markets a new engineering process, nonexistent, and
therefore not relevant, in 2011-12.

II.

Standard of Review

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There are several considerations, but no rule, governing a party’s ability to
supplement the record after the close of discovery. Permission to supplement rests with
the Court’s “inherent power to control its docket so as to promote fair and efficient
adjudication.” Sec. & Exch. Comm'n v. Gentile, No. CV 16-1619 (JLL), 2017 WL
11477123, at *1 (D.N.J. Sept. 18, 2017) (Linares, C.J.) (quoting Rolo v. Gen. Dev. Corp.,
949 F.2d 695, 702 (3d Cir. 1991)); see also Landis v. N. Am. Co., 299 U.S. 248, 254
(1936) (discussing “the power inherent in every court to control the disposition of the
causes on its docket with economy of time and effort for itself, for counsel, and for
litigants”). This inherent power includes the discretion to grant leave to supplement the
record of a case. See Saturn of Denville New Jersey, LP v. Gen. Motors Corp., No. 08CV-5734(DMC), 2009 WL 953012, at *3 (D.N.J. Apr. 7, 2009) (citing Edwards v. Pa.
Tpk. Comm'n, 80 F. Appx 261, 265 (3d Cir. 2003); U.S. ex rel. Feldstein v. Organon,
Inc., No. CIVA.07-CV-2690(DMC), 2009 WL 961267, at *2 (D.N.J. Apr. 7, 2009) (citing
Edwards v. Pa. Tpk. Comm'n, 80 F. Appx 261, 265 (3d Cir.2003)), aff’d, 364 F. App’x
738 (3d Cir. 2010) (permitting supplementation where the proposed evidence was
relevant and would not prejudice the opposing party.)
At this stage, decisions on the pending motions for summary judgment are
forthcoming. Given the pendency of the summary judgment motions and the
consequential impact of the Court’s potential consideration of the White Paper, the
summary judgment standard is also instructive on the Court’s consideration of
Plaintiffs’ Motion to Supplement. On summary judgment, the court must view the facts
and all reasonable inferences drawn from those facts in the light most favorable to the
nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986); Halsey v. Pfeiffer, 750 F.3d 273, 287 (3d Cir. 2014). To withstand a properly
8

supported motion for summary judgment, the nonmoving party must identify specific
facts and affirmative evidence that contradict those offered by the moving party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57 (1986). “When there is a
disagreement about the facts or the proper inferences to be drawn from them, a trial is
required to resolve the conflicting versions of the parties.” Am. Eagle Outfitters v. Lyle
& Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009) (quoting Peterson v. Lehigh Valley Dist.
Council, 676 F.2d 81, 84 (3d Cir. 1982)).
III.

Discussion

On balance, the Court finds that the White Paper is relevant to Plaintiffs’ claims
linking Zurik, fire causation, and the fire that occurred at Plaintiffs’ Millville Plant. The
publication comes from a direct defendant in this matter and is authored by a
knowledgeable source, Shattuck, Defendant Eriez’ Rule 30 (b)(6) deponent. The Court
agrees with Plaintiffs that the White Paper also informs 6 the discussion related to
Defendants’ Joint Motion to Preclude Plaintiffs’ fire cause and origin expert, Patrick J.
McGinley (Dkt. 225). In addition, Defendants argue that Plaintiffs cannot support their
claim that the Defendants’ negligence was the cause of the fires and the White Paper’s
statements that Zurik “generates heat” and “generates fire hazards” and is “widely
believed to be one of the main causes of fires in scrap yards” informs that contention.
(Hanson Cert., Dkt. No. 365-1, Ex. B). The White Paper’s discussion about the potential
value of Zurik and its Eriez’s ability to transition its known property of causing fires into
a high value commodity, is relevant to the Defendants’ knowledge, and/or the industry

The Court’s finding of relevancy on this issue should not be construed as determinative. The posture of the
present motions is not dispositive.

6

9

knowledge of the risk and is circumstantial evidence that Plaintiffs’ claims and Plaintiffs’
experts have support for their suppositions.
The Court finds that Defendants will not suffer prejudice by supplementing the
record with the White Paper. It is authored by a Rule 30 (b)(6) deponent and speaks to
industry norms and frustrations with Zurik, and then offers a lucrative solution. 7 In
marketing the new-found utility of Zurik, the publication acknowledges problems
associated with Zurik as a stand-alone by-product. Given that Defendant Eriez created,
authored, and circulated the White Paper, it cannot argue undue prejudice.
Moreover, Defendants’ argument that the White Paper does not qualify as “new”
evidence is tenuous. Defendants argue that the White Paper is not new because some of
the claims related to Zurik’s fire causing properties were previously considered and
acknowledged by Eriez during deposition and is, therefore, cumulative and
corroborative evidence that merely corroborates other evidence in the record. (See, e.g.,
Dkt. 365 at 162 (Eriez); Dkt. 366 at 4 (Pinnacle); Dkt. 368 at 10-13 (Cooper)). Shattuck
acknowledged that fluff generated by the System “ends up in the Zurik bin,” that fluff
and Zurik “will combust from time to time,” and that “[Eriez] always heard of fires in
zurik bins[.]” (Hanson Cert., Dkt. No. 365, Ex. E, pp. 69-72; 106). The Court agrees with
Plaintiffs’ argument that these acknowledgments in deposition fall short of a fulsome
concession and are not the equivalent of stating affirmatively that Zurik itself generates
heat, poses a fire risk, or is universally considered a main cause of “junk yard” fires.
As Plaintiffs point out:

Plaintiffs’ argument that this is a party opponent admission against interest that was circulated after the briefing
concluded has potential merit, at this stage.

7

10

The White Paper contains at least four distinct statements of fact that have
never before been made by Eriez (or any other Defendant) in this case: (1)
“Stockpiles of Zurik generate heat” (Dkt. 361-3 (White Paper) at 8); (2)
Stockpiles of Zurik are “widely believed to be one of the main causes of fires
in scrap yards nationwide due to the hot metals surrounded by flammable
debris” (id.); (3) there is a “risk of fires originating in Zurik Stockpiles” (id.);
and (4) Zurik “generates fire hazards.”
(Pl. Br.at pp. 3-4; Dkt. 361-2).

In their moving brief, Plaintiffs argue that these statements “are not insignificant,
corroborative or cumulative statements; they are new assertions of fact.” (Id.) The
Court agrees that the White Paper is new evidence in that it links Zurik to fire causation
in a more direct and probative manner than Shattuck’s acknowledgements in
deposition. 8 Thus, while the White Paper may not be determinative of the Defendants'
knowledge of Zurik as a fire risk at the time the System was sold, or Defendants' state of
mind at the time the System was sold, it is probative. 9

8

The relevancy of the White Paper includes Plaintiffs’ challenge to Defendants’ expert James F. Gallagher
(“Gallagher”). Gallagher is jointly retained by all Defendants and offers testimony on the likelihood of that
the Zurik bins were the cause of the fires: “I believe that the information they provided would suggest that
it was not foreseeable that a zurik fire could have started, a fire could have started in the zurik bin.” (See
Dkt. 272 at p. 387 ¶ 304). Plaintiffs argue that the White Paper pronouncements on the fire hazard posed
by Zurik may be used to challenge, or frame, Gallagher’s assertion. In addition, the White Paper bears on
causation. As Plaintiffs state with citations to the docket, causation was explained by their fire causation
expert, Patrick McGinley. (See, e.g., Dkt. 225-2 at 19 (Defendants’ Motion to Preclude Plaintiffs’ fire
causation expert Patrick McGinley) (“Without reliable expert testimony as to the cause of the fire being
spontaneous combustion, Plaintiffs cannot sustain their burden of proof against Defendants”)). Likewise,
Defendant Cooper argues that Zurik is not a fire risk. (See Dkt. 232-3 at 30 (“plaintiffs cannot prove that
risk of fire in a Zurik output bin was a risk of such foreseeable character as to require written or verbal
warning in addition to the warnings of flammable material already given to plaintiffs...”); Dkt. 260-1 ¶ 49
(“It is disputed that combustibility of Zurik was well known in the metal recycling industry.”); id. ¶56
(“Plaintiffs have not established that as a matter-of-fact Zurik is combustible.”)).
9 Plaintiff may not offer the White Paper as evidence of direct liability. Indeed, Plaintiffs also knew of the
propensity for fire in Zurik bins. In his deposition, Plaintiff Joseph Silipena agreed that Plaintiffs knew
fluff was combustible and present in zurik bins. (Barber Cert. Dkt. 241-2, Ex. C. at 103:24 to-104:7; Ex. E.
at 56:2-8, 74:17-22).

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Finally, the Court finds that the admissibility of the White paper does not offend
Fed. R. Evid. 407, at this stage and as to its proposed use by Plaintiffs. Rule 407
provides, in relevant part, that:
When measures are taken that would have made an earlier injury or harm
less likely to occur, evidence of the subsequent measures is not admissible
to prove: [] negligence; [] culpable conduct; [] a defect in a product or its
design; or [] a need for a warning or instruction.” Fed. R. Evid. 407. The rule
then provides an important exception that “the court may admit this
evidence for another purpose, such as impeachment or —if disputed —
proving ownership, control, or the feasibility of precautionary measures.
Fed. R. Evid. 407.
Although the text of Rule 407 permits admission of subsequent remedial
measures for impeachment, the Third Circuit has “cautioned against permitting the
exception to “swallow” the rule.” Stecyk v. Bell Helicopter Textron, Inc., 295 F.3d 408,
415–16 (3d Cir. 2002)(citing Petree v. Victor Fluid Power, Inc., 887 F.2d 34, 39 (3d Cir.
1989) (impeachment exception may not be used as “subterfuge” to prove negligence)).
On this issue, the Court is afforded significant deference in balancing “both the rule and
the exception” and must ensure to weigh the probative and prejudicial values so that
“remedial measures evidence is not improperly admitted under the guise of the
impeachment exception.” (Id.)
Plaintiffs, without conceding the White Paper constitutes evidence of a remedial
measure, state that they are not offering it to prove liability. Plaintiffs offer the White
Paper to challenge Eriez’ arguments regarding the nature and physical properties of
Zurik and Eriez’ expert Gallagher. Even if the court determined that the White Paper is
remedial measure evidence, Plaintiffs argue that the White Paper falls into the exception
as evidence being offered for “another purpose.” Plaintiffs intend to use the White

12

Paper to highlight deficiencies in Gallagher’s Report, namely that it is predicated upon
unsettled facts, because the cause of the fires is a genuine issue of material fact and for
impeachment. 10
Also, the White Paper describes a process of improving the utility of Zurik. It
does not offer a redesign of the System.
The process of converting Zurik to Zorba begins with shredding the
recovered Zurik down to -1/2 inch. There are multiple benefits in
liberation, size reduction and smaller size distribution of the product.
First, making all the products close in size allows for better separation and
recovery on magnetic separators and eddy current separators. Since the
finer nonferrous material can only “jump” a certain distance when in
contact with the eddy current magnetic field, the splitter needs to be
brought into a location where the nonferrous material can be recovered,
yet large enough for the largest non-conductive material to pass under.
Second, the size reduction liberates all the co-mingled metals, specifically
copper wires, from small motors and such that typically end up in the
Zurik product. The additional free copper in the product and elimination
of debris increases the value of a Zorba product.
(Fidanza Cert., Dkt. No. 361-3, Ex. B).
Plaintiff cannot argue that the “new” Eriez equipment was necessary to “fix” or
remediate the functionality of the System. In so far as that is the case, it would
constitute inadmissible evidence of subsequent remedial measure. However, in the
marketing promotion for the White Paper, Eriez acknowledges the problems caused by
leaving Zurik in its organic state:
Eriez' new "Processing Zurik to Zorba" white paper highlights separation
equipment that efficiently upgrades Zurik to a more desirable and
10

Plaintiffs also argue that Rule 407 can only be invoked by Eriez, and not the other defendants. See Diehl
v. Blaw-Knox, 360 F.3d 426, 430 (3d Cir. 2004) (explaining that Rule 407 does not apply where the
challenging party is not the party that took the measure because the purpose of the rule is to avoid an
inference of admitted liability and “it hardly makes sense to speak of a party’s fault being ‘admitted’ by
someone other than the party”). The Court has determined that as proffered, the White Paper is not
barred by Fed. R. Evid. 407.

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profitable Zorba fraction while also reducing scrapyard fire hazards. This
white paper, written by Eriez® Recycling Market Manager Mike Shattuck,
explains that stockpiles of Zurik generate a significant fire risk due to the
hot metals surrounded by flammable debris. It details the procedure of
transforming relatively low value Zurik material into a copper-rich, high
value Zorba product that is easier to market and sell. The paper explains
that the size reduction and liberation of Zurik is key to ensuring this
process improves profitability.
(Hanson Cert. Dkt. No. 365-3, Ex. G).
It is the acknowledgement of the properties and propensities of Zurik that is
relevant and admissible. Therefore, while the White Paper cannot be used as evidence
that the System and/or design or parts were defective or that the Defendants were
definitively aware in 2010-2011 of the physical properties of Zurik as posing a high risk
of fire, it can be used for the limited purpose of establishing a potential causation link
and impeaching any testimony that states that Zurik does not cause a fire hazard. The
Court will permit the White Paper as part of the record.
IV.

Conclusion

The Court will grant Plaintiffs’ Motion to Supplement the Record to include the
New Jersey Supreme Court jurisprudence in Schwartz v. Menas, 251 N.J. 556, 279 A.3d
436 (2022). Plaintiffs’ Motion to Supplement the Record to include the White Paper will
also be granted.
An appropriate Order shall issue.
Dated: March 31, 2023
s/ Joseph H. Rodriguez
Hon. Joseph H. Rodriguez, USDJ

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