Brief Fact Summary.
Due to an oil spill by ship Donau Maru, ship Tamara could not dock where scheduled and suffered additional costs to dock at a different pier.
Synopsis of Rule of Law.
Unless special circumstances exist, a plaintiff who has suffered no physical harm cannot recover damages for solely financial harm, whether or not foreseeable, in a negligence cause of action.
However, negligent misrepresentation is a special financial harm claim for which tort recovery is permitted because without such liability the law would not exert significant financial pressures to avoid such negligence.View Full Point of Law
Plaintiffs are ship Tamara, owners, and charterers. Defendants are ship Donau Maru and owners. Donau Maru had an oil spill in 1979 into the Boston Harbor, which caused ship Tamara to be unable to dock where scheduled and had to unload cargo at a different pier and suffer additional costs. Plaintiffs sued Defendants for negligence seeking damages of the additional costs incurred. District Court denied. Plaintiffs appealed.
Whether the precedent remains good law that in a cause of action for the tort of negligence, damages are not recoverable for purely financial harm.
This Court will follow precedent and recovery is denied. The district court’s judgment is affirmed.
This Court makes the assumption that the type of injury that occurred was foreseeable. This Court references the primary â€œpure financial injuryâ€ case Robins Dry Dock & Repair Co. v. Flint, which held the ships owners could recover damages in negligence for harm done to the ship itself, but not for the charterer of the ship who suffered no physical harm. This Court finds Plaintiffs, like the plaintiffs in Robins, â€œâ€˜outside the scope’ of those to whom defendant owes a legal duty of care.â€ The same outcome was reached in the Kinsman II case. This Court’s reasoning is largely based upon public policy considerations: (1) From a â€œpragmatic or practical administrativeâ€ view, permitting damages for purely financial injury risks clogging the courts and increased legal expenses in bringing tort lawsuits; (2) â€œâ€˜disproportionality’ between liability and faultâ€ where permitting damages for purely financial injury risks influencing businesses’ practices when participating in economic activity; and (3) the option of a proposed new rule that would permit â€œâ€˜particularly damaged’ plaintiffs to sue for financial harms suffered â€˜beyond the general economic dislocation,’â€ which this Court disagrees with. Further, Plaintiffs have not presented compelling reasons to justify this Court in carving out a new exception for them.