In Atlantic Petroleum, the Second Circuit determined that economic losses are not recoverable for an unintentional maritime tort in the absence of a physical injury. The court also refused to create a fact-specific exception for foreseeable losses caused by a government entity. As summed up by the court:
The issue on this appeal is whether, under maritime law, an owner of a vessel may be awarded damages for economic loss due to negligence in the absence of physical damage to its property. For many years a number of courts have derived from the Supreme Court’s opinion in Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927), a “rule” prohibiting such damages. Plaintiff–Appellant American Petroleum and Transport, Inc. (“American”) appeals from the October 11, 2012, judgment of the United States District Court for the Southern District of New York (Paul A. Engelmayer, District Judge), granting a motion to dismiss by Defendants–Appellees City of New York and the New York Department of Transportation (“City”). See American Petroleum and Transport, Inc. v. City of New York, 902 F.Supp.2d 466 (S.D.N.Y.2012).
Although we conclude that Robins Dry Dock has been overread to establish a rule barring damages for economic loss in the absence of an owner’s property damage, we believe the rule has been so consistently applied in admiralty that it should continue to be applied unless and until altered by Congress or the Supreme Court.
(Note: I originally published this post on Navigable Waters: A Maritime, Longshore and Defense Base Act Blog.)
