QUESTION 4: Prime Textiles Corporation purchased a 30-year-old building in an industrial section of Amesville in late 1999 and converted its interior to a plant for the manufacture of brightly colored fabrics to be sold to dress manufacturers. Prime has been a successful innovator in designs and even in a year of recession shows a handsome profit. Its sales are at an annual rate of about $30 million, and it employs 400 workers and technicians at this, its only plant.

In early 2000, Dead-em Insecticides, Inc., constructed for $20 million a plant in the same industrial section of Amesville, five blocks (1/4 mile) distant from Prime. It employs 200 workers and technicians. Dead-em is a leading producer of insecticides for use against household pests

— bees, roaches, etc. In 1992 it developed a new and commercially successful product, Strike, that has proved to be remarkably effective while meeting all safety requirements. The new process of manufacture necessarily involves the emission of gases and other by-products different in chemical composition from the by-products of the manufacture of the earlier type of insecticides.

By mid-2003, Prime began to receive complaints from its vendees that the colors on about 1/2 of its fabrics were not proving “true” or “fast”.

They faded after several months, and some took on a different tint. After investigation, Prime determined that the recent gaseous emissions from Dead-em had permeated its building and adversely affected certain of the dyes that it used for coloring fabrics.