Torts I, Pages 458–467

State of Lousiana ex rel. Guste v. M/V Testbank

United States Court of Appeals, Fifth Circuit (en banc), 1985

Judgment:

Affirmed.

Facts:

Defendants' boat, the M/V Testbank, collided with the M/V Sea Daniel in a channel between the Mississippi River and the Gulf of Mexico. Due to the impact, defendants' cargo of twelve tons of PCP was spilled into the channel, causing the coast guard to close it to navigation. The coast guard also suspended fishing in the surrounding four hundred square miles of marsh and waterways.

Procedural History:

  • Trial court granted defendants' movement for summary judgment on the claims for economic loss without physical damage to property, except for the claims from the fishermen using the waters.

  • A panel of the Court of Appeals affirmed, concluding that claims for economic loss unaccompanied by physical damage to a proprietary interest were not recoverable in maritime tort.

Issue:

Can one recover for economic loss when there is no physical damage to one's property?

Reasoning:

  • Such recovery has been consistently denied, notably in Robins Dry Dock. To allow it would make defendants liable for many distant losses without a new rule, which would be more vague than the current and no less arbitrary.

  • To allow it would also shift the burden from the injured's loss insurance to the defendants' more costly liability insurance, which may not even be obtainable for something of this scope.

  • The difficulty to distinguish which members of a community have been affected by defendants to justify skirting the Robins rule by the use of public nuisance theory.

Rule/Holding:

Physical damage is a prerequisite to recover for economic loss.

Concurring Opinion:

Gee: Courts are poorly equipped to manage disasters of such magnitude, so they should be wary of adopting rules of decision which would encourage the drawing of their broader aspects before them. Trying to award damages to all the unnumbered claimants for injuries that are speculative would destroy many businesses.

Dissenting Opinions:

  • Wisdom: The Robins case the court based its decision on is not up-to-date with modern tort law and works substantial injustice on innocent victims. Its scope was not intended to be this broad. Tort recovery should be allowed regardless of physical loss as long as there is not a contract and the harm is particular.

  • Rubin: Robins should not be extended to his case because it denies recompense to innocent persons.