Full opinion text
GERRY, Chief Judge. I. INTRODUCTION This case involves a clash among powerful business interests. The four corporate parties have had a lengthy history of cooperation, but have now directed their energy to litigating claims against one another. This litigation was fueled by the Nuclear Regulatory Commission’s (“NRC”) suspension of power operations at the Peach Bottom Atomic Power Station (“Plant” or “Station”) in Delta, Pennsylvania. These operations were suspended on March 31, 1987 after the NRC was informed that operators at the plant were sleeping on duty; the NRC did not authorize their resumption until April 17, 1989, some time after oral arguments on this motion were heard. This power outage darkened the demean- or of the plant’s co-owners: Philadelphia Electric Company (“PECO”); Public Service Electric and Gas Company and its wholly-owned subsidiary Public Service Enterprise Group, Incorporated (collectively “PSE & G”); Atlantic City Electric Company (“Atlantic City”); and DelMarVa Power & Light Company (“Delmarva”). The Peach Bottom Nuclear Plant was built and continues to operate pursuant to an agreement among these four companies. The plant commenced commercial operations in 1974, and consists of two 1,065 megawatt nuclear reactors. The companies’ respective ownership shares are, as established by the Owners Agreement entered into on November 21, 1971, as follows: PSE & G (42.49%), PECO (42.49%), Atlantic City (7.51%), and Delmarva Power (7.51%). Agreement at Article 2.1 (Appended to PSE & G’s Complaint as Exhibit C). The shutdown of the plant ignited the lawsuits sub judice. Under the agreements among the owners, PECO pledges to “operate and maintain the station” for the owners as if it were owned solely by PECO. Agreement Art. 12, § 12.1. In performing this role PECO is to “act as an independent contractor responsible for the result to be obtained, i.e., generation of power and energy at the Station, as economically and reliably as is practica-ble_” Id. PECO is the licensed operator for the Peach Bottom plant, and therefore subject to all applicable statutes and regulations, especially those administered by the NRC. PECO’s Answer to PSE & G’s Complaint at ¶¶ 13, 14, and 15. On July 27, 1988, PSE & G filed a lawsuit alleging, inter alia, that PECO’s conduct of the operations at Peach Bottom was in breach of the Owners Agreement and was also tortious. That same day a similar complaint was filed by Atlantic City Electric and Delmarva Power. The cases have been consolidated for most pre-trial purposes. Jurisdiction over both complaints is founded on diversity of citizenship. 28 U.S.C. § 1332. Plaintiff Delmarva is a Delaware and Virginia corporation having its principal place of business in Wilmington, Delaware. Plaintiff Atlantic City Electric is a New Jersey corporation with its principal place of business in Pleasantville, New Jersey. Plaintiff PSE & G collectively consists of two New Jersey corporations having their principal places of business in Newark, New Jersey. Defendant PECO is a Pennsylvania corporation having its principal place of business in Philadelphia, Pennsylvania. Venue is proper because PECO is doing business and is licensed to do business in this district. 28 U.S.C. § 1391(c). The essence of both complaints is as follows: (1) that the Owners’ Agreement required PECO to efficiently maintain and operate the plant; (2) that PECO failed to do so and therefore the plant was shut down by the NRC for a lengthy period of time and suffered physical damage; (3) that PECO was aware of various problems at Peach Bottom, or should have been, and did not, as it was required to do, apprise the co-owners of the problems and, in fact, affirmatively misrepresented the status of the plant; and (4) as a result of PECO’s actions the co-owners not only lost the power output they usually derive from Peach Bottom but incurred additional and substantial maintenance and repair costs, and fines from regulating authorities. The plaintiffs seek redress in tort and contract. The Atlantic City/Delmarva complaint consists of two counts: count one, a breach of contract count, and count two, a tort count which includes allegations of negligence, gross negligence, wilful and wanton misconduct, fraudulent misrepresentation and negligent misrepresentation. PSE & G’s complaint contains five self-styled “claims for relief”: breach of contract, tort, failure to disclose, fraudulent misrepresentation and negligent misrepresentation. Compensatory damages and interest thereon are sought with respect to each of these tort claims, punitive damages are sought on the gross negligence, wilful and wanton misconduct, and fraud claims. PECO now moves to dismiss the tort claims contained in the plaintiffs’ complaints. II. MOTION TO DISMISS PECO’s argument on this motion to dismiss is that tort remedies do not exist under the applicable law, either that of Pennsylvania or New Jersey, when misfeasance in the performance of a contract is the basis for plaintiffs’ claims and the only damages suffered are economic in nature. PECO contends that the plaintiffs’ complaints fail to allege facts upon which a claim for relief in tort may be granted. Fed.R.Civ.P. 12(b)(6). In ruling upon PECO’s motion “we follow, of course, the accepted rule that a complaint should not be dismissed unless it appears beyond doubt that plaintiffs can prove no set of facts in support of [their] claims which would entitle [them] to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). The question before us becomes whether, after viewing the facts pleaded in the complaints in the light most favorable to the plaintiffs and resolving every doubt in their favor, their complaints state any valid claim for relief in tort. 5 C. Wright & A. Miller, Federal Practice and Procedure: § 1357, at 601 (1969). To the extent parties have presented factual evidence to support or oppose this motion to dismiss, we have excluded it from consideration and will not rely upon it, with the exception of the owners’ agreement which was appended as an exhibit to the complaints. In any case, the exhibits submitted have primarily consisted of pleadings or opinions filed or produced for other cases the parties believe are analogous to this one. III. FACTUAL ALLEGATIONS A. The Agreement The agreement essentially apportions the benefits and burdens of building and operating the plan in accordance with the ownership shares. That is, expenses, such as operations and maintenance costs, are allocated on the basis of ownership shares, as is the “hourly energy generation”; i.e., the power produced. Atlantic City/Delmarva Complaint ¶¶ 9, 15 (“ACE/DPL Complaint”), Agreement Art. 3, Art. 4. The agreement among the power companies leaves primary responsibility for the operation of Peach Bottom to PECO. However, Article 16 of the agreement establishes an owners’ committee comprised of one representative from each company, the responsibilities of which include “coordinating the administration of all matters pertaining to the ... operation and maintenance of Peach Bottom_” Agreement Art. 16. The owners also established an “Operations and Maintenance Committee” (“0 & M”) to “review general performance and operations at Peach Bottom as well as proposed capital expenditures and expense budgets and to make recommendations on these matters to the Owners’ Committee.” PSE & G Complaint ¶ 11. These committees meet on a quarterly basis by telephone conference. Id. PECO provides them with a daily status report on the plant’s operations. Id.; Agreement Art. 13, § 13.1 (PECO “shall keep ACE, DPL and PS fully informed of the status of the Station. Operations shall be scheduled so as to result in the maximum practicable benefit to the signatories from the utilization of the Station output.”) In addition, PECO is required to assign “sufficient trained personnel to operate the Station in a reliable and economical manner, such personnel to be employees solely of PE[CO].” Agreement Art. 12, § 12.1. Moreover, under the agreement PECO is the NRC licensed operator of Peach Bottom and, as such, is responsible for the safe operation of the plant. ACE/DPL Complaint ¶ 16. As the licensed operator, PECO has a duty to the public and its co-owners to comply with the laws and regulations covering nuclear power facilities. ACE/DPL Complaint If 17; PSE & G Complaint 1113. Among its other legal duties PECO must comply with 10 C.F.R. §§ 55.54(k) by having a licensed or senior operator “present at the controls at all times during the operation of the facility.” ACE/DPL Complaint ¶ 18; PSE & G Complaint 1114, and with NRC Regulatory Guide 1.114 which provides: In order for the operator at the controls of a nuclear power plant to be able to carry out these and other responsibilities in a timely fashion, he must give his attention to the condition of the plant at all times. He must be alert in order to ensure that the plant is operating safely and must be capable of taking action to prevent any progress toward a condition that might be unsafe. ACE/DPL Complaint 1119; PSE & G Complaint 1115. PECO is also subject to several other regulations concerning the training of plant personnel and staffing at the plant. ACE/DPL Complaint If 18; PSE & G Complaint 1114. And pursuant to 10 C.F.R. § 50, Appendix B, PECO is responsible for establishing and maintaining a quality assurance program to ensure that the plant is run safely. ACE/DPL Complaint 1120. B. PECO’s Alleged Failures PECO’s mismanagement of the Peach Bottom plant allegedly began as early as 1985. During that year, PECO received warnings from the NRC and the Institute of Nuclear Power Operations (“INPO”) that Peach Bottom’s performance was not up to industry standards. PSE & G Complaint ¶ 16. These criticisms were not communicated to PSE & G. Nor were the most serious of these warnings conveyed to Atlantic City Electric and Delmarva Power. ACE/DPL Complaint ¶¶ 23, 24. Instead, PECO told PSE & G that it had made significant improvements in conditions at Peach Bottom. In January of 1986, for example, INPO sent a letter to PECO’s Chairman and CEO stating that “[s]tandards of performance at ... [Peach Bottom] are unacceptably low,” and rated Peach Bottom’s overall performance “in the MARGINAL category of plant performance.” ACE/DPL Complaint ¶ 24 (emphasis in original.) This letter and other INPO warnings were not disclosed to the other owners. Id. The crucial failure of PECO, however, supposedly lies in its failure to act on warnings by six General Electric Senior Reactor Operators (“GE SRO’s”) that PECO control room personnel were routinely sleeping on the job or otherwise being inattentive to their duties. These GE SRO’s were working under contract with PECO to help in improving the plant’s performance in response to INPO and NRC criticism. PSE & G Complaint ¶¶ 17, 18. PECO did not report these incidents of sleeping on the job to the NRC or its co-owners. Id. Instead, PECO made presentations to the Owners’ Committee in November and December 1986 indicating that there were no major problems at the plant and that all the concerns raised by the NRC and INPO were being addressed. These presentations involved an improvement program designed to rectify problems at the plant. However, the program “did not identify gross operator inattentiveness as a problem despite the reports of this behavior.” Id. ¶ 19. Reports of inattentive behavior continued to be made to PECO in the period from December 1986 to February 1987. Despite this, PECO submitted a status report to the co-owners stating that there were no major problems at the plant. Id. at ¶ 20. On March 24, 1987, the NRC was informed, presumably by the GE SRO’s, that Peach Bottom control room operators were sleeping on duty. The NRC initiated a 24 hour-a-day inspection coverage at the plant’s control room. On March 31, 1987, the NRC issued a shut-down order, which stated in part: (1) At times during various shifts, in particular the 11:00 p.m. to 7:00 a.m. shift, one or more of the Peach Bottom operations control room staff (including licensed operators, senior licensed operators and shift supervision) have for at least the past five months periodically slept or have been otherwise inattentive to licensed duties. (2) Management at the Shift Supervisor and Shift Superintendent level have either known and condoned the facts set forth in Paragraph one, or should have known of these facts. (3) Plant management above the shift superintendent position either knew or should have known the facts set forth in Paragraph one and either took no action or inadequate action to correct this situation. Id. ¶ 23 (Shudown Order Appended as Exhibit A to PSE & G’s Complaint); ACE/DPL Complaint ¶ 35. Based on these findings, the NRC found that there was not a reasonable assurance that the plant was being operated “in a manner to assure that the health and safety of the public [would] be protected” and ordered that power operations at the plant cease. Shutdown Order at 5, ACE/DPL Complaint ¶ 38. In the period following shut-down, PECO is alleged to have been uncooperative with INPO and NRC in responding to their suggestions about the need for management restructuring at PECO’s nuclear operations division, and ineffective in redressing the problems leading to the shutdown. ACE/DPL Complaint ¶¶ 39-44; PSE & G Complaint ¶¶ 28-43. Aside from its delays in making the changes necessary to get Peach Bottom reauthorized for power operations, PECO is alleged to have continued to misrepresent the condition of the plant’s operations and the status of the restart effort. Id. On February 2, 1988, heads rolled at PECO. Its president, John Austin, resigned, followed shortly by its CEO Lee Everett. On March 31, 1988, PECO’s new management issued a letter admitting that the March 31, 1987 shutdown order was an “appropriate action on the part of the NRC for the protection of the public’s health and safety.” PSE & G Complaint ¶ 44. At the time of oral argument on this motion, the new management had not yet gained reau-thorization for the restart of power operations. Restart of nuclear operations at Peach Bottom was authorized by the NRC on April 17, 1989. The plant began operating at full power on August 4, 1989. At oral argument there was some question as to whether either of the complaints contained allegations that physical damage to the plant resulted from PECO’s failure to maintain the plant. Published newspaper reports indicate that earlier this year one-third of the surface area of the plant was contaminated with radiation, which had leaked from pipes PECO failed to maintain. Atlantic City Electric and Delmarva Power amended their complaint at our request, to add specific allegations of physical damage. PSE & G did not choose to do so, believing that its complaint, if broadly read, already encompassed such a claim. In any case, we will read both complaints as alleging such property damage. C. Damages The plaintiffs allege that the shutdown of the plant and the physical deterioration of the plant which resulted from PECO’s failures has caused them hundreds of millions of dollars in damages. These consist of: (1) the cost of replacing power usually generated by the plant; (2) lost profits; (3) increased operations and maintenance costs; (4) expenditures to clean up and repair portions of the plant not adequately maintained by PECO; and (5) additional capital expenditures and other costs associated with the shutdown. Estimates of the cost of the shutdown to PECO and its co-owners have been placed in the $735 million range; $235 million of which PECO has described as “the tremendous cost of the fix”, that is, the cost of maintenance, repairs and new operational procedures. ACE/DPL Complaint ¶ 48. IV. LEGAL ANALYSIS Thanks to the diligent and capable efforts of counsel, our analysis is informed by numerous opinions written by the courts of this Circuit and the States of New Jersey and Pennsylvania, among others. There can be no reconciliation of all that we have seen on our journey to the region of the tort-contract border. We cannot explain or make consistent the decisions of all these courts; no one can. What we must do is isolate the fundamental, basic principles which underlie those decisions and attempt to apply them to the dispute before us. This is no easy task, as root principles have not been universally agreed upon, and, because of shifting policy concerns, slight contextual differences can result in drastically different exposure to tort liability. But we have done our best, mindful that any uncertainty counsels against granting PECO’s motion. With these initial thoughts in mind, we turn to the issues before us. A. Choice of Law As our jurisdiction is based on diversity of citizenship, it is state law which must provide the substantive law to govern this dispute. But which state’s law? The contestants in the Atlantic City/Delmarva-PECO bout both believe their fight should be determined by Pennsylvania law. However, PSE & G argues that New Jersey should supply the substantive law governing its action. PECO argues that we need not engage in a premature choice-of-law analysis, since it is entitled to dismissal of all the plaintiffs’ tort claims under either Pennsylvania or New Jersey law. Atlantic City/Delmarva insist that dismissal would be improper under either of these states’ laws. PSE & G urges us to apply New Jersey law to its claim and deny PECO’s motion. To make a choice of law in a diversity case, a federal court must apply the conflicts of law principles of its forum state. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496-97, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941). Therefore, if we are to make a choice, we must look to New Jersey’s conflicts doctrine. New Jersey applies a governmental interest approach to conflicts questions, which requires: a two-step analysis. The court determines first the governmental policies evidenced by the laws of each related jurisdiction and second the factual contacts between the parties and each related jurisdiction. A state is deemed interested only where application of its laws to the facts in issue will foster that state’s policy. Henry v. Richardson-Merrell, Inc., 508 F.2d 28, 32 (3d Cir.1975). This second step requires a qualitative rather than a quantitative weighing in which “only contacts which are likely to promote valued state policies are considered relevant.” Id. PSE & G has made a spirited argument that New Jersey would apply its own law to PSE & G’s dispute with PECO. It points out that two of the parties to these two complaints are from New Jersey, one is from Pennsylvania, and the other from Delaware and Virginia. Thus, PSE & G says, “the factor of the parties’ citizenship is for all practical purposes neutralized inasmuch as the ... interests which are identified effectively cancel each other out_” Blakesley v. Wolford, 789 F.2d 236, 241 (3d Cir.1986). Moreover, the fact that Peach Bottom is in Pennsylvania is, in itself, deceiving since these same parties are co-owners of the Salem nuclear facility in Salem, New Jersey. Further, while PECO’s alleged misconduct took place in Pennsylvania, its misrepresentations were transmitted into New Jersey. Most importantly, the injuries suffered by PSE & G because of PECO’s failures occurred in New Jersey and “New Jersey cases have almost uniformly applied New Jersey law in instances in which the state had a significant compensation interest, viz., where the plaintiff was a New Jersey domiciliary.” Schum v. Bailey, 578 F.2d 493, 496 (3d Cir.1978). This policy interest, along with New Jersey’s interest in deterring tortious behavior by persons whose behavior affects New Jersey residents, is overriding and would lead New Jersey courts to choose their own law. PECO admits that the parties’ citizenship is a neutral factor but insists that the relevant relationship between the parties is centered firmly in Pennsylvania. Pennsylvania is the site of Peach Bottom, and PSE & G voluntarily contracted with PECO, a Pennsylvania corporation, to build and operate the plant there. The joint efforts with respect to the plant were pursued under the Peach Bottom Owners Agreement, which contains a clause indicating it “shall be construed, interpreted and controlled by the laws of the Commonwealth of Pennsylvania.” Agreement ¶ 26.1. Not only did the conduct which PSE & G complains of take place in Pennsylvania, but so did, PECO claims, the injury to PSE & G’s ownership interest in the Pennsylvania plant. More significantly, Pennsylvania’s governmental interest is superior to New Jersey’s because this case involves a complaint against a Pennsylvania public utility brought by a plaintiff which “expressly availed itself of Pennsylvania law in making the contract.” PECO Reply Brief at 32. In such a circumstance, New Jersey will defer to Pennsylvania’s “interest in effectuating its policy of disallowing recovery in tort for economic loss stemming from commercial disputes with its resident corporations.” Id. at 33. Luckily for the court, PECO has agreed to bear its burden on this motion by fighting under both New Jersey and Pennsylvania law. For if under both sets of law PECO is entitled to dismissal of the plaintiffs’ tort claims, we need not make a choice of law. Rohm & Haas Co. v. Adco Chemical Co., 689 F.2d 424, 429 (3d Cir. 1982) (“When ... a ‘false conflict’ exists, New Jersey conflicts of law rules permit the resolution of the case without a choice between the laws of the two states.”) Given this posture, we decline PSE & G’s invitation to engage in a choice of law analysis at this time. The parties have devoted very little of their attention to the oft-times complicated factual and legal considerations relevant to such an analysis. If we must, we will at an appropriate time, address these issues. For now we will consider the sufficiently complex question of whether plaintiffs’ complaints state a claim for tort relief under Pennsylvania or New Jersey law. Though the parties have discussed the two states’ laws concurrently, we will try, for the sake of clarity, to discuss them separately. Our task is complicated by the fact that neither the Pennsylvania nor the New Jersey Supreme Court has addressed the precise question raised by this motion. Thus, our duty is to predict how these courts would decide this motion. In engaging in this exercise in prediction “we must consider relevant state precedents, analogous decisions, considered dicta, scholarly works, and any other reliable data tending convincingly to show how the highest court in the state would decide the issue at hand.” Aloe Coal Co. v. Clark Equipment Co., 816 F.2d 110, 117 (3d Cir.1987), quoting McGowan v. Univ. of Scranton, 759 F.2d 287, 291 (3d Cir.1985); see also, Pennsylvania Glass Sand v. Caterpillar Tractor Co., 652 F.2d 1165, 1167 (3d Cir.1981); Jones & Laughlin Steel v. Johns-Manville Sales, 626 F.2d 280, 285 (3d Cir.1980). We are admonished not to disregard a ruling of a Pennsylvania or New Jersey intermediate appellate court unless we are convinced that the decision would have been decided otherwise by the relevant State Supreme Court. Commissioner v. Estate of Bosch, 387 U.S. 456, 465, 87 S.Ct. 1776, 1782-83, 18 L.Ed.2d 886 (1967), cited in Jones v. Laughlin Steel, 626 F.2d at 285, n. 10. With this in mind, we proceed. B. Contending Viewpoints This motion presents us with a choice initially between competing visions of Pennsylvania law. Setting forth these contending viewpoints as argued by the parties seems of value, so we do so. We start with the movant’s argument. 1. PECO’s Argument PECO claims that the plaintiffs’ tort claims are designed to obtain a better bargain than they made when they agreed to build and operate the Peach Bottom plant. The Owners Agreement provided no profit to PECO for its role as the licensed operator of the plant; whatever benefit PECO derived from the plant was from its proportionate share of the power produced. PECO says that it undertook no obligation to insure its co-owners against economic loss caused by a power outage of the plant. Rather, the Owners Agreement was specifically amended to provide that “[a]ll power replacement costs incurred by each [co-owner] as a result of the total or partial unavailability of its ownership share of the [Peach Bottom] Station shall not be considered as a shared liability and shall be borne entirely by each [co-owner].” Agreement ¶ 25.2. It is this bargain plaintiffs seek to evade. By pleading these tort claims, plaintiffs seek to foist hundreds of millions of dollars of damages upon PECO for breach of an obligation to its co-owners it never undertook — something which they cannot do consistent with Pennsylvania law. a. The Economic Loss Doctrine PECO’s motion to dismiss is based on its view of both the definition of and the appropriate application of the so-called “economic loss doctrine.” This doctrine bars a plaintiff from recovering purely economic losses suffered as a result of a defendant’s negligent or otherwise tortious behavior, absent proof that the defendant’s conduct caused actual physical harm to a plaintiff or his property. As PECO sees it, this doctrine serves not only as a check on the imposition of limitless liability on negligent actors with respect to unforeseen or unlikely plaintiffs, but also as a boundary between tort and contract liability for parties in privity. That is, when a plaintiff alleges that a defendant’s improper performance of a contract resulted in merely economic losses such as power replacement costs and lost profits, and not physical harm to property other than property which is the subject of the maintenance contract between the parties, the economic loss doctrine bars a tort recovery and leaves the plaintiff to his contractual remedies. Indeed, when only economic losses are at stake, the existence of a contract or the validity of an exculpatory clause therein are not really relevant, since such losses are simply not redressable in tort. There is no gain-saying the fact that Pennsylvania law is hostile to the recovery of economic losses in tort, at least with respect to parties not in contractual privity. Margolis v. Jackson, 375 Pa.Super. 182, 543 A.2d 1238, 1240 (1988) (Pennsylvania “cases clearly limit the extent that a negligent tortfeasor will be made legally liable for an economic loss caused directly or indirectly by the tortfeasor’s negligent act or conduct. Purely economic loss, when not accompanied with or occasioned by physical injury, is considered beyond the scope of recovery even if a direct result of the negligent act.”); accord Moore v. Pavex, 356 Pa.Super. 50, 514 A.2d 137 (1986); Aikens v. Baltimore & Ohio B. Co., 348 Pa.Super. 17, 501 A.2d 277, 279 (1985) (“To allow a cause of action for negligent cause of purely economic loss would be to open the door to every person in the economic chain of the negligent person or business to bring a cause of action. Such an outstanding burden is clearly inappropriate and a danger to our economic system.”) Pennsylvania courts have refused to relax this doctrine even when the plaintiff’s allegations of economic loss stemmed from the serious and well-known nuclear incident at Three Mile Island. In Com. of Pa. v. General Public Utilities Corp., 710 F.2d 117 (3d Cir.1983), the Court of Appeals for the Third Circuit, inter alia, reviewed a summary judgment order entered against plaintiffs, who were a group of governmental entities who sought to recover damages, e.g. increased civil defense costs, they allegedly suffered as a result of the TMI incident. The district court had granted summary judgment for the defendants on the grounds that the plaintiff pled only purely economic loss and “courts have consistently refused to recognize a cause of action in negligence or strict liability for economic injury unattended by physical injury or damage to real or personal property.” In re TMI Litigation Governmental Entities Claim, 544 F.Supp. 853, 857 (M.D. Pa.1982) vacated and remanded, sub nom 710 F.2d 117 (3d Cir.1983). The Court of Appeals held that though plaintiffs complaint did not contain any claim for direct physical damage to property, such as public buildings, “there was the contention by plaintiffs that increased radioactivity ... emitted during the nuclear incident ... rendered the public building unsafe for a temporary period of time and constituted a physical intrusion upon the plaintiff’s properties.” 710 F.2d at 122-23. Though the court refused to speculate on whether such a showing would suffice to establish physical harm and serve as a basis for recovery, the court indicated that the “plaintiffs should be permitted to develop the facts upon which these contentions may be tested”. Id. at 123. Just last year the Pennsylvania Superior Court considered another case arising out of Three Mile Island and confronted the question of whether there was a nuclear accident exception to the economic loss rule. The court held that there was no such exception. Gen. Publ. Util. v. Glass Kitchens of Lancaster, Inc., 374 Pa.Super. 203, 542 A.2d 567 (1988). The plaintiffs in Glass Kitchens were associated with the tourist industry in Lancaster County, Pennsylvania. They sought to recover damages for economic loss allegedly suffered because of a diminution of tourists caused by the Three Mile Island nuclear incident. The case reached the Superior Court on this certified question of law: Where plaintiffs waive the right to seek damages their properties might have suffered from contamination after a nuclear accident, are such accidents at nuclear power plants an exception to the general tort rule that a plaintiff must sustain personal injury or property damage as a prerequisite for recovery of economic loss? Id. 542 A.2d at 570. The court answered in the negative, holding that there is no nuclear accident exception to the economic loss rule. Id. at 571. While Pennsylvania courts recognize that persons or property who have come into contact with radiation or nuclear fall-out “will suffer a direct and predictable actual injury,” this did not relieve the plaintiffs of proving that the TMI incident “resulted in actual physical injury or property damage.” Id. at 571. Only by making such a showing could a plaintiff recover for economic loss in tort. Id. Likewise, the Second Circuit, while acknowledging that nuclear power plants may in the case of an accident cause injury on a grand scale, held that if the only harm plaintiff suffered was economic then the economic loss rule operated to bar recovery in tort. County of Suffolk v. Long Island Lighting Co., 728 F.2d 52, 62-63 (2d Cir.1984); see also, Long Island Lighting Co. v. Transamerica Delaval, 646 F.Supp. 1442 (S.D.N.Y.1986). Of course, these Pennsylvania cases all involve disputes between plaintiffs and defendants not in contractual privity. But PECO contends Pennsylvania courts are also unwilling to allow a plaintiff in privity with a defendant to recover purely economic losses in tort. The economic loss doctrine prevents recovery of tort damages where the only harm plaintiff alleges is the failure to receive the benefits of its contractual relationship with the defendant because of that defendant’s acts, b. The Wonderful World of Warranty Supporting this view are a series of recent warranty cases, which PECO argues stand for principles fully applicable to the dispute before us. In East River S.S. Corp. v. Transamerica Delaval, 476 U.S. 858, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986), the Supreme Court, sitting in admiralty, held that whether stated in negligence or strict liability terms, no products liability claim exists in admiralty when a commercial party alleges injury only to the purchased product itself resulting in purely economic loss. The Court indicated that the justification for both the physical injury and other property exceptions to the economic loss rule rests on the policy of imposing responsibility for damages on the party which can most effectively reduce the safety hazards posed by defective products, that is, on the manufacturer. Id. at 867, 106 S.Ct. at 2300. But where there is no injury to a person or to property other than the defective product itself, “the commercial user stands to lose the value of the product, risks the displeasure of its customers who find that the product does not meet their needs, or, as in this case, experiences increased cost in performing a service.” Id. at 871, 106 S.Ct. at 2302 (emphasis added). The Court stressed that the losses that result when the purchased product injures only itself “mean simply that the product has not met the customer’s expectations, or, in other words, that the customer has received insufficient product value.” Id. at 872, 106 S.Ct. at 2302. (quotations omitted.) Commercial parties are able to allocate the risk that products will not perform as expected through a contract, and when they make such an allocation it should not be displaced by an overriding tort remedy. “[Wjarranty law sufficiently protects the purchaser by allowing it to obtain the benefit of its bargain.” Id. at 873, 106 S.Ct. at 2303. East River takes on the character of more than persuasive authority here, because the Court of Appeals for the Third Circuit predicted that the Supreme Court of Pennsylvania would, if the issue was presented to them, adopt East River as the law of Pennsylvania. Aloe Coal Co. v. Clark Equipment, 816 F.2d 110 (3d Cir. 1987). It did so even while recognizing that it had only recently indicated that Pennsylvania courts would adopt the approach articulated in Pennsylvania Glass Sand, supra, 652 F.2d 1165, which held that the question of whether product damages are considered purely economic loss and not compensable in tort depended on the nature of the product defect, the type of risk posed by the defect, and the manner in which the injury to the product itself occurred. The Third Circuit emphasized that the Supreme Court had rejected “intermediate” approaches like Pennsylvania Glass as unsatisfactory, indicating that when a product injures itself “the damage may be qualitative, occurring through gradual deterioration or internal breakage[,] it may be calamitous ... [b]ut either way, since by definition no person or other property is damaged, the resulting loss is purely economic.” Aloe Coal, 816 F.2d at 117, quoting East River, 476 U.S. at 870, 106 S.Ct. at 2302. The Circuit was impressed by the Supreme Court’s careful consideration of the fundamental principles of tort and contract law, and indicated that East River could be read as resting on five considerations: (1) when the defective product injures only itself the reasons for imposing a tort duty are weak and those limiting remedies to contract law are strong; (2) damage to the product itself is most naturally understood as a warranty claim; (3) contract law is well suited to commercial controversies because the parties may set the terms of their own agreements; (4) warranty law sufficiently protects purchasers by allowing them to obtain the benefit of their bargain; and (6) warranty law has a built-in limitation on liability, whereas tort actions could subject manufacturers to an indefinite amount of damages. Aloe Coal, 816 F.2d at 118. Another important consideration was the extent to which contract, or more precisely warranty law suited the “realities of the marketplace.” Id. In the marketplace, commercial parties may strike a bargain whereby the manufacturer restricts its liability by disclaiming warranties or limiting remedies in exchange for exacting a lower purchase price. Id. When such a bargain is struck, public policy, as expressed through federal common law, is best served by restricting the parties to its terms rather than disrupting it by recognizing a concurrent cause of action in tort; a cause of action in which the bargained for allocation of risks is supplanted by a potentially limitless imposition of liability upon the manufacturer. Id. PECO contends that the present case, while not governed by the U.C.C., implicates the concerns expressed in the East River line of cases. The damages sought by the plaintiffs, increased costs because of the shutdown, lost profits, and other consequential damages, constitute purely economic loss. The plaintiffs merely seek to be placed in the position they would have enjoyed had PECO lived up to the plaintiffs’ view of its contractual obligations. According to PECO, where commercial actors such as the parties to this litigation have for years run a nuclear power plant according to a complex and carefully drafted contractual allocation of risks, benefits and responsibilities, East River’s teaching indicates that concurrent tort liability does not exist. Where economic damages are claimed which are a foreseeable result of a breach of contract, it is to contract law rather than tort to which a commercial plaintiff must look to be made whole. To hold otherwise would be to disrupt the expectations of the parties by supplanting their agreement by allowance of a tort recovery, which raises the possibility of potentially unlimited liability — especially in the form of punitive damages. PECO supports this argument by pointing to King v. Hilton-Davis, 855 F.2d 1047 (3d Cir.1988), a recent decision applying Pennsylvania law. In King, the Third Circuit dealt with how to determine whether a product “injured only itself” and determined that the question is answered by looking at the product purchased by the plaintiff as opposed to the product sold by the defendant. The crucial factor in deciding what remedies are available to a plaintiff is the character of the plaintiff's loss: As we read East River, it is the character of the plaintiff’s loss that determines the nature of the available remedies. When loss of the benefit of a bargain is the plaintiff’s sole loss, the judgment of the Supreme Court was that the undesirable consequences of affording a tort remedy in addition to a contract-based recovery were sufficient to outweigh the limited interest of the plaintiff in having relief beyond that provided by warranty claims. The relevant bargain in this context is that struck by the plaintiff. It is that bargain that determines his or her economic loss and whether he or she has been injured beyond that loss. Moreover the East River analysis dictates that where the purchaser of a defective product sues the manufacturer from whom he or she has purchased the product, rather than a supplier of components for the product, the relevant product is what the plaintiff bargained for and the remedy is limited to a contract-based recovery. Id. at 1051. Like King, this case is not one so factually distinguishable to deviate from Aloe Coal’s prediction “that the Supreme Court of Pennsylvania would decline to follow a course that would severely restrict the ability of parties in commercial transactions to allocate the risk of purely economic losses and would leave a manufacturer with an open-ended and indefinite liability for such losses.” Id. at 1053. Here, plaintiffs and defendants struck a bargain. PECO was to run the plant for itself and its co-owners. The co-owners were to assume the risk that there might be power outages at the plant; PECO was to operate the plant without making a profit for rendering such services. Such a bargain is best evaluated by the principles of contract. For even if the contractual liability limitations are invalid, the harm suffered by plaintiffs is nothing more than the failure of PECO to provide plaintiffs with what they perceive to be the benefit of their contractual bargain. East River and its progeny thus counsel dismissal of plaintiffs’ tort claims. To rule otherwise would be to disrupt the expectations of these large commercial entities and to send a message to other economic actors that they may not safely enter into arms-length business transactions, even with other large entities, without fear of subjecting themselves to unlimited tort liability. PECO says this danger would lead the Pennsylvania Supreme Court to extend this hostility to recovery of loss by commercial parties beyond contracts for the sale of goods to a service contract, like the operation and maintenance contract among these parties. And one federal court sitting in Pennsylvania has extended the East River analysis to a non-warranty case. In PPG Industries, Inc. v. Sundstrand Corp., 681 F.Supp. 287 (W.D.Pa.1988), two kinds of contracts were really at issue: (1) a contract for the sale of collet fingers, and (2) an engineering design services contract. The plaintiff and defendant had entered into an engineering services contract in which the defendant was to do analysis and testing of collet fingers plaintiff wished to purchase. After these tests were performed, plaintiff bought collets from the defendant. Later, defendant performed a study to determine whether collet fingers not machined on the inside surface, and therefore cheaper, would still meet plaintiffs stress and fatigue life criteria. The plaintiff alleged that the defendant gave written assurance that the cheaper collet fingers would not have diminished stress and fatigue lives. Based on this assurance, plaintiff purchased the cheaper fingers from the defendant and complained that they developed stress cracks from stress below the plaintiffs specified minimum life. The plaintiff sued, alleging a breach of the engineering services agreement. Plaintiff also attempted to recover in tort alleging that defendant had “breached its duty to perform its design work in a professional and non-negligent manner” and had misrepresented by not disclosing that it had not tested the cheaper fingers and by assuring plaintiff that the fingers would meet their criteria. Plaintiff sought damages for replacement costs and other economic loss caused by the failure of the collet fingers. The court granted the defendant’s motion for summary judgment as to the plaintiff’s tort claim, relying heavily on East River. Though East River was a products case, the court felt that “its examination of the proper role of contract and tort remedies ha[d] application in this dry land dispute over an engineering agreement.” Id. at 290. The court noted that the plaintiff sought only to recover economic loss flowing from defendant’s breach, i.e., damages suffered because it did not receive the benefit of its bargain. In such a dispute between two commercial parties East River appropriately applied to bar a tort recovery. The fact that the contract involved professional services rather than the provision of manufactured goods, did not, the court held, change the appropriate analysis. While acknowledging the existence of a concurrent body of tort law dealing with professional malpractice, the court did not view the decision as imperiling malpractice law, because the “special non-contractual duties of professionals such as doctors, lawyers and architects enforced by tort law were created in part to make up for the lack of sophistication and bargaining power of those seeking these professional services.” Id. Such conditions, the court stated, do not ordinarily obtain in service contracts between two commercial parties. As such, summary judgment on plaintiffs tort claims, including its fraud claim, was appropriate under any of the potentially applicable laws, including Pennsylvania’s. Id.; see also, Public Service Co. of N.H. v. Westinghouse Elec., 685 F.Supp. 1281, 1287 (D.N.H.1988); Streiff Jewelry Co. v. United Parcel Serv., 670 F.Supp. 341 (S.D. Fla.1987) withdrawn per stipulation 679 F.Supp. 7 (S.D.Fla.1988) (No tort remedy available for a plaintiff alleging economic loss arising out of a breach of a shipping contract.) c. The Plaintiffs’ Allegations Do Not Fall Within Any Exception to the Economic Loss Rule PECO asserts that the plaintiffs may not avoid the effect of the economic loss doctrine simply because they are in contractual privity with PECO. Unlike plaintiffs not in contractual privity with a defendant, however, the plaintiffs here may recover for economic loss against PECO but only in contract. The plaintiffs have tried to evade this clear rule by pleading fraud and wanton and wilful misconduct, all in an attempt to do better than their contractual bargain — and in the hope that they can recover large punitive damage awards. PECO claims there are only two discrete exceptions to the economic loss rule: (1) when a defendant’s conduct causes physical injury to property or persons or (2) when the defendant’s breach is of a duty imposed by law, rather than by contract. Neither situation is applicable here. The fact that this case involves a service contract is irrelevant. Unlike service cases involving certain professionals upon which the law has imposed certain duties, no cases have been cited which stand for the proposition that a commercial party such as PECO owed some legally imposed duty, outside the contract, to avoid causing economic loss to its corporate confrere’s. Therefore, a tort recovery is inappropriate and unavailable. PPG Industries, 681 F.Supp. at 290. Nor can the economic loss doctrine be by-passed by allegations of “wanton,” “reckless,” “bad-faith” or “fraudulent” conduct. See Iron Mountain Sec. Storage v. Am. Specialty Foods, 457 F.Supp. 1158 (E.D.Pa.1978). Iron Mountain was a commercial contract case involving an alleged breach of an options contract. The defendant counterclaimed for punitive damages on count two of its counterclaim, which attempted to state a claim in tort on the theory “that a party to a contract who either recklessly or intentionally commits a bad faith or malicious breach of the duties imposed by that contract for the purpose of causing harm to the other party to the contract is liable [in] tort” for damages proximately caused thereby and for punitive damages. Id. at 1163 (record citation omitted.) Judge Luongo put his finger on why plaintiffs always try to turn contract disputes into tort actions: Although they derive from a common origin, distinct differences between civil actions for tort and contract breach have developed at common law. Tort actions lie for breaches of duties imposed by law as a matter of social policy, while contract actions lie only for breaches of duties imposed by mutual consensual agreements between particular individuals. In tort actions, damages are awarded to compensate the plaintiff for all loss suffered by breach of the duty, whereas in contract actions, damages are limited by the scope of the agreement and must be foreseeable at the time the agreement is made. If a tortfeasor breaches a duty imposed by society, a monetary levy beyond that which is compensatory may be imposed against him to punish the wrongdoing and serve as a deterrent; such “punitive damages” are not assessed for breach of mere contractual duties, however. These and other differences have characterized tort and contract as distinct forms of action, and the fact that tort rules usually provide greater advantages for plaintiffs’ recoveries has led to “more or less inevitable efforts of lawyers to turn every breach of contract into a tort.” W. Prosser, Horn-book of the Law of Torts, § 92 (4th ed. 1971): quotation from id. at 614 (footnote omitted). In this case, the difference in rules as to availability of punitive damages seems to have been a major factor promoting assertion of the tort claim since that is the only difference in the relief requested under the two counts of counterclaim. Id. at 1165 (footnote omitted). The court assumed that the option contract contained an implied covenant of good faith and fair dealing, i.e., a duty created by law rather than the intent of the parties. Id. at 1166. However, it refused to hold that merely because there was a breach of a legal duty, a tort remedy must exist under Pennsylvania law. Rather, the court distinguished between those situations where a breach of contract has led to tort liability to third persons; e.g., personal injury resulting to a person not a party to the contract, or the insurance contract context in which unequal bargaining power and adhesion contracts are prevalent. Id. at 1166-67. Where, as in Iron Mountain, the injury caused by the breach was within the scope of the contract and the loss was “purely economic and compensable in an action on the contract itself,” Judge Luongo did not “believe that Pennsylvania would superimpose tort law on that contract action merely to allow recovery of punitive damages for breach of the implied contract term.” Id. at 1166. See also Closed Circuit Corporation of America v. Jerrold Electronics, 426 F.Supp. 361, 364 (E.D.Pa.1977) (“[a] claim ex contractu cannot be converted to one in tort simply by alleging that the conduct in question was wantonly done.”); Cincinnati Gas & Elec. Co. v. General Elec. Co., 656 F.Supp. 49, 63 (S.D.Ohio 1986) (“Punitive damages are not appropriate to and may not be awarded in an action for breach of contract and a pleader does not alter what is essentially an action for breach of contract by adding the words wilfully, wantonly and maliciously to a claim”). Nor, argues PECO, does the mere fact that a defendant may have negligently or intentionally misrepresented the nature of its performance of a contract transform a breach of contract into tort. Its argument on this ground is heavily dependent on non-Pennsylvania cases such as Unifoil Corp. v. Cheque Printers and Encoders Ltd., 622 F.Supp. 268 (D.N.J.1985). In Cheque Printers, a third-party defendant moved to dismiss a fraud claim against it. The defendant premised a fraud claim on the theory that the third party knew that the sales contract specified a certain type of foil to be used in making lottery tickets, and knowingly supplied another kind. Judge Stern dismissed the fraud claim: On the fraud claim, [plaintiff] argues that SpringMotors does not directly address allegations of intentionally tortious conduct. That is true; but the reasoning of Spring Motors leads us to conclude that, as between commercial parties, New Jersey will not countenance such claims.... [Plaintiff] also argues that case law demonstrates that an action for fraud will lie, even in the presence of a contract. But such cases deal with fraud in the inducement, not the performance, of a contract. This Court, moreover, has construed the law of New Jersey to prohibit fraud claims when the “fraud contemplated by the plaintiff ... does not seem to be extraneous to the contract, but rather on fraudulent performance of the contract itself.” Id. at 270-71 (quoting Foodtown v. Sigma Marketing Systems, Inc., 518 F.Supp. 485, 490 (D.N.J.1980)); see also, Unifoil Corp. v. CNA Ins. Cos., 218 N.J.Super. 461, 528 A.2d 47, 51 (App.Div.1987). Similarly, Judge Wolin of this district recently dismissed a fraud complaint based on allegations that a party had sold a plastic processing machine with the knowledge that the machine would not meet contractual specification. In so deciding, he followed Cheque Printers and held that fraudulent performance of a contract between two commercial entities, as opposed to fraud extraneous to the contract, is not compen-sable in tort. Werner & Pfleiderer Corp. v. Gary Chemical Corp., 697 F.Supp. 808 (D.N.J.1988). In the power plant context, a federal court has held that a fraudulent breach of contract does not give rise to a separate tort action. In Public Service Co. of N.H. v. Westinghouse Elec. Co., 685 F.Supp. 1281 (D.N.H.1988), the complaint alleged that the defendant fraudulently concealed facts about two failing turbine blades in a steam turbine electric generator which defendant supplied to the plaintiff. The plaintiff contended that if it had been told the true facts it would have had the blades inspected and would have avoided a subsequent breakdown and a resulting shutdown of the power plant. The court indicated that defendant’s duty to warn arose from the terms of the contract, rather than any common law duty. Id. at 1290. The gravamen of plaintiffs fraud claim was that it did not get the benefit of its bargain because the defendant’s withholding of information breached the defendant’s contractual duty to exercise reasonable professional knowledge and judgment. Id. As such, the plaintiff did not have an independent fraud claim under tort law. Instead, these allegations were properly regarded as another way of stating a claim for breach of contract. Id.; see also, Nissho-Iwai Co. Ltd. v. Occidental Crude Sales, Inc., 729 F.2d 1530, 1550-51 (5th Cir.1984); Flow Industries, Inc. v. Fields Const. Co., 683 F.Supp. 527 (D.Md. 1988); Pandjiris, Inc. v. Sunshine Stainless Tank & Equip., 655 F.Supp. 473 (E.D.Mo.1987); Keene Corp. v. Insurance Co. of North America, 597 F.Supp. 934, 945-46 (D.D.C.1984); cf. Hi-Grade Cleaners, Inc. v. American Permac, Inc., 561 F.Supp. 643, 644 (N.D.Ill.1982) (“case law and the Restatement apparently confine the tort of negligent misrepresentation to persons and entities in the business of selling or supplying information which their customers will rely upon in taking some additional action.”) Here, PECO says, the plaintiffs’ fraud claims (to the extent PECO understands them, see, infra) are based solely upon misrepresentations and concealments of facts by PECO with respect to operations at the Peach Bottom plant; that is, fraudulent statements relating to PECO’s performance of the Owners Agreement. Such fraud is not extraneous to the contractual dispute among the parties, but is instead but another thread in the fabric of plaintiffs’ contract claim. Like the plaintiffs’ other tort claims, its fraud claim is under-girded by factual allegations identical to those supporting their breach of contract counts. See Agreement Art. 13, § 13.1 (PECO “shall keep ACE, DPL, and PSE & G fully informed of the status of the Station.”) This fraud did not induce the plaintiffs to enter into the original agreement nor did it induce them to enter into additional undertakings. It did not cause harm to the plaintiffs distinct from those caused by the breach of contract; and the mere fact that disclosure of certain facts to plaintiffs earlier may have allowed them to take corrective action does not change the result. If a plaintiff knew, for example, that he was being supplied with unsuitable goods he could act to obtain other goods and therefore avoid any harm from the supplier’s breach. However, in just this type of situation courts have held that a tort remedy does not exist. See e.g., Cheque Printers, 622 F.Supp. at 270-71; Public Service Co., 685 F.Supp. at 1290. PECO claims this case is no different. Plaintiffs merely allege that, but for PECO’s fraud, they would have discovered PECO’s improper operation of the plant and would have taken remedial actions which would have prevented the incidents leading to the shutdown. In short, the plaintiffs would have minimized the damages caused by PECO’s improper performance of its contractual duty to efficiently operate and maintain the plant. Such a claim is simply indistinct from the concurrent contract claim, argues PECO, and the economic loss doctrine mandates its dismissal. Finally, the plaintiffs’ allegations of physical damage to the Peach Bottom plant do not constitute an exception to the economic loss doctrine, rather they merely strengthen PECO’s contention that this is a contract case and nothing more. Atlantic City Electric and Delmarva’s amended complaint added specific allegations that PECO breached its contractual obligations to “[p]erform or contract for maintenance, renewals, and replacements required to keep the Station in safe and efficient operating condition and to protect the property....” Agreement Art. 12.1(d) quoted in ACE/DPL Amended Complaint ¶ 13. The amendment was intended to make clear that the “Owners Agreement is a maintenance contract, as well as an operating contract.” ACE/DPL Supplemental Memorandum at 1. The same factual allegations constitute the basis for Atlantic City and Delmarva’s attempt to recover for physical damages to the plant in tort as well as in contract. PECO claims such allegations do not fall within the damage to property exception to the economic loss rule; rather, like damage to the defective product itself, damage to property which is the subject of a maintenance contract is compensable in contract only. If PECO’s misconduct at Peach Bottom had resulted in physical damage to Delmarva Power’s headquarters on King Street in Wilmington then Delmarva would have pled an exception to the economic loss rule since such property damage would not have been reasonably foreseen by the parties in making their contract. The risk that PECO would fail to live up to its contractual obligations and that Peach Bottom would be physically damaged, however, is like the risk that a product will malfunction or be destroyed by an internal defect, one which is both utterly foreseeable and within the scope of the contract. PECO insists that East River and its progeny stand firmly for the proposition that these sort of risks will be contractually allocated by commercial parties, since they are so obviously known to the parties, and that public policy demands that such allocations be respected. PECO’s duty to maintain the plant is firmly rooted in the Owners’ Agreement, and it is the bargain they struck when the plaintiffs signed that agreement which must serve as the basis for recovering losses caused by violations of it. As Prosser and Keeton indicate: It is suggested that to the extent that the duty a party to a contract owes to another party or third party beneficiary is to be determined upon the first party’s manifested intention, the obligation is contractual and entirely contractual. This would normally be so when the claim is for economic loss. Such a claim should not be translatable into a tort action in order to escape some roadblock to recovery on a contract theory.... Thus, a builder or a contractor would normally be subject to liability on a contract theory only ... for delays in construction or defects in construction that do not result in physical harm to persons or tangible things, other than the thing itself that is being constructed or repaired. W. Prosser & W. Keeton, The Law of Torts, § 92 at 659 (5th ed. 1984). The fact that the co-owners may have to expend money to repair or replace parts of the plant does not distinguish them from commercial buyers which must repair or replace a defective or destroyed crankshaft or turbine; each may have to make such expenditures if the contract so allocates this risk since, like plaintiffs’ other tort claims, this is a risk of purely economic loss which the plaintiffs foreseeably faced if PECO did not live up to its contractual obligations. 2. The Plaintiffs’ Perspective The plaintiffs have, as might be expected, a totally different view of what this case is about. They say that, messy though it may be, tort law has traditionally been applicable to conduct involving the performance of contracts, particularly service contracts. In Pennsylvania, a tort recovery exists for a plaintiff harmed by a defendant who has improperly performed his contractual duties under a service contract absent a valid exculpatory clause. Such is the law, and the plaintiffs argue that the economic loss cases cited by the defendant are not to the contrary. One set involves parties not in privity and are best viewed, according to plaintiffs, as proximate cause cases. The second, East River and its progeny, are applicable only to cases governed by the U.C.C. and do not, and do not purport to, overrule or affect the concurrent body of tort law governing misfeasance in the performance of service contracts. Moreover, Pennsylvania l