Ales-Peratis Foods International, Inc. v. American Can Co.

This appeal is from a summary judgment in favor of the respondent can manufacturer, American Can Company. Appellant, Ales Peratis Foods International, Inc., is a buyer, packager and seller of seafood. Ales-Peratis purchased cans manufactured by the respondent from Gencan, a can supplier, for use in its business. When delivered, the cans were discovered to be defective. The cans therefore were not usable and Ales-Peratis lost the opportunity to can a large quantity of abalone. In response to this, Ales-Peratis filed a complaint seeking recovery from American Can for the economic losses Ales-Peratis suffered due to its inability to use these defective cans. American Can filed a motion seeking summary judgment on the grounds California law does not permit recovery of economic loss alone under a strict liability or negligence theory, nor does it permit recovery in warranty where the plaintiff is not in privity with the direct purchaser of the product.

The principal issue on appeal is whether a commercial consumer can recover for a solely economic loss caused by a negligently manufactured product which the manufacturer knew was destined for this particular consumer and its…