12-4505-cv

American Petroleum and Transport v. City of New York

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term 2013

Heard: August 27, 2013 Decided: December 6, 2013

Docket No. 12-4505-cv

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AMERICAN PETROLEUM AND TRANSPORT, INC.,

Plaintiff-Appellant,

v.

CITY OF NEW YORK, DEPARTMENT OF TRANSPORTATION 

OF THE CITY OF NEW YORK,

Defendants-Appellees. - - - - - - - - - - - - - - - - - - - - - - 

Before: NEWMAN, RAGGI, and LYNCH, Circuit Judges. 

Appeal from the October 11, 2012, judgment of the United

States District Court for the Southern District of New York (Paul

A. Engelmayer, District Judge), dismissing a complaint by a

vessel owner alleging economic losses for a maritime tort in the

absence of property damages.

Affirmed. 

James M. Maloney, Port Washington, NY

(Law Office of James M. Maloney,

Port Washington, NY, on the brief),

for Appellant.

Michael J. Pastor, Senior Counsel, New

York, NY, (Michael A. Cardozo,

Corporation Counsel of the City of

New York, Kristin Helmers,

Corporation Counsel of the City of

New York, New York, N.Y., on the

brief), for Appellees.
JON O. NEWMAN, Circuit Judge.

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 (1927), a “rule” prohibiting such damages. PlaintiffAppellant 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.

Background

American is a corporation in the business of

transporting petroleum products by water. At all relevant times,

American was the registered owner of a barge, the John Blanche,

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and the demise charterer1

 of a tug, the Caspian Sea. The City

operates a drawbridge, the Pelham Parkway Bridge, over the

Hutchinson River. In March 2011, the tug and the barge, after

passing upstream on the Hutchinson River under the opened bridge,

requested the City to open the bridge for the downstream voyage. 

Due to a mechanical malfunction, which American alleges was the

result of negligence, the City did not open the bridge, delaying

the tug and the barge for approximately two and one-half days.

As a consequence of the delay, American alleges that it

suffered $28,828 in economic losses. American acknowledges that

it did not suffer any property damage.

In May 2012, American brought claims against the City

for common law negligence and for violation of 33 U.S.C. § 494,

which requires that a drawbridge over navigable water “be opened

promptly by the persons owning or operating such bridge upon

reasonable signal for the passage of boats and other water

craft.”2

 In October 2012, the District Court, relying on Robins

1 In a demise or bareboat charter, the charterer is owner

pro hac vice of the vessel, and the charterer is treated as

the owner of the vessel with a sufficient property interest to

recover lost profits. The demise charter is “tantamount to,

though just short of, an outright transfer of ownership.” 

Guzman v. Pichirilo, 369 U.S. 698, 700 (1962). 

2 The District Court ruled that the City’s Department of

Tansportation was an improper defendant, and American does not

challenge that ruling on appeal. See American Petroleum, 902

F. Supp. 2d at 467 n.1. 

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Dry Dock v. Flint, 275 U.S. 303 (1927), granted the City’s motion

to dismiss under Fed. R. Civ. P. 12(b)(6). See American

Petroleum, 902 F. Supp. 2d at 468-71. The Court stated:

The issue presented by the City’s motion

to dismiss is whether the “Robins Dry Dock

rule,” as the case law has come to refer to

it, precludes American from recovery here. 

American is quite correct that, on its facts,

Robins Dry Dock itself does not address the

situation here: a claim for economic damages

by a vessel’s owner (as opposed to a time

charterer). However, since that decision, the

courts in this Circuit have extracted from it

a broader prohibition with respect to maritime

tort suits that is fatal to American’s

negligence claim here.

Specifically, as the Second Circuit has

stated, the Robins Dry Dock rule “effectively

bars recovery for economic losses caused by an

unintentional maritime tort absent physical

damage to property in which the victim has a

proprietary interest.”

902 F. Supp. 2d at 468-69 (quoting G & G Steel, Inc. v. Sea Wolf

Marine Transportation, LLC, 380 Fed. Appx. 103, 104 (2d Cir.

2010) (summary order), and citing Gas Natural SDG S.A. v. United

States, No. 07-2129-CV, 2008 WL 4643944, at *1 (2d Cir. Oct. 21,

2008) (summary order)). Although both G & G Steel and Gas

Natural were non-precedential summary orders, see 2d R.

32.1.1(a), we had unequivocally stated in the latter decision,

“[T]here exists a bright line rule barring recovery for economic

losses caused by an unintentional maritime tort absent physical

damage to property in which the victim has a proprietary

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interest.” Gas Natural, 2008 WL 4643944, at *1 (internal

quotation marks and citations omitted) (emphases in original).

The District Court also concluded that most Circuits

have held that 33 U.S.C. § 494 does not give rise to an implied

private right of action. American Petroleum, 902 F. Supp. 2d at

470.

Discussion

In Robins Dry Dock, a dry docking company damaged a

propeller on a steamship, rendering the vessel unusable for two

weeks. The steamship’s time charterer sued the dry dock company

to recover its lost profits resulting from the delay. The

Supreme Court denied recovery. See Robins Dry Dock, 275 U.S. at

308-10. The Court first ruled that the time charterer could not

prevail as a third-party beneficiary of the contract between the

vessel owner and the dry docking company. See id. at 307-08. 

Turning to the time charterer’s tort claim, the Court first

stated generally that whether the dry dock company repaired the

owner’s vessel “promptly or with negligent delay was the business

of the owners and of nobody else,” and more specifically that

“[t]he injury to the propeller was no wrong to the [time

charterer] but only to those to whom it belonged.” Id. at 308. 

The Court next considered what effect, if any, the charterparty

had on the time charterer’s claim: “But as there was a tortious

damage to a chattel [the propeller of the owner’s vessel] it is

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sought to connect the claim of the [time charterer] with that in

some way.” Id. The Court observed that the time charterer’s loss

“arose only through their contract with the owners,” id., and

then rejected the time charterer’s claim in the passage most

often quoted from Robins Dry Dock: 

[A]s a general rule, at least, a tort to the

person or property of one man does not make

the tort-feasor liable to another merely

because the injured person was under a

contract with that other unknown to the doer

of the wrong. The law does not spread its

protection so far.

Id. at 309 (internal citation omitted).3 

Robins Dry Dock made two explicit rulings. The first

ruling – that the time charterer was not the third-party

beneficiary of the contract between the vessel owner and the

drydocker – has no relevance to the pending case. The drawbridge

operator has no contract with anyone. The second ruling was that

the fact that the time charterer had a contract with the vessel

owner whose property had been damaged by an unintentional tort

gave the time charterer no right to recovery of its economic

losses. This ruling, which we will call the “narrow ruling” of

3 The Court also rejected the theory, which our Court had

used to uphold the time charterer’s claim, see Flint v. Robins

Dry Dock & Repair Co., 13 F.2d 3, 6 (2d Cir. 1926), that the

time charterer should receive an appropriate portion of the

damages that the drydocker paid to the owner for loss of use

because the owner could have sued on the time charterer’s

behalf. See Robins Dry Dock, 275 U.S. at 309-10.

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Robins Dry Dock, also seems to have no relevance to the pending

case: American Petroleum is not grounding its claim for economic

losses on a contract between the negligent operator of the

drawbridge and some other party whose property was damaged. 

Therefore, if American Petroleum’s claim is barred, as the

District Court held, by a Robins Dry Dock “rule” that economic

losses cannot be recovered for an unintentional maritime tort in

the absence of physical damage to the claimant’s property, it

must be because either there is some additional broader ruling

implicit in that decision, or the narrow ruling has been

extended, whether justifiably or not, into a broader ruling.4

Justice Holmes’s text, however, gives no hint of either

an implicit broader ruling or a basis for an extended broader

ruling. He stated the Robins Dry Dock rule in narrow terms,

explicitly declining to permit recovery just because the claimant

has a contract with a party damaged by the tort. “[A]s a general

rule, at least, a tort to the person or property of one man does

not make the tort-feasor liable to another merely because the

injured person was under a contract with that other unknown to

4 Dissenting in State of Louisiana ex rel. Guste v. M/V

TESTBANK, 752 F.2d 1019 (5th Cir. 1985), Judge Wisdom

contended that the narrow rule of Robins Dry Dock “has been

expanded now to bar recovery by plaintiffs who would be

allowed to recover if judged under conventional principles of

foreseeability and proximate cause.” Id. at 1039 (Wisdom, J.,

with whom Rubin, Politz, Tate, and Johnson, JJ, join,

dissenting) (footnote omitted).

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the doer of the wrong.” Robins Dry Dock, 275 U.S. at 309. 

Moreover, the three cases Justice Holmes cited as a “good

statement,” id., of the “general rule” all involved a claimant

seeking recovery because of its contract with the tort victim.

See The Federal No. 2, 21 F.2d 313 (2d Cir. 1927)5

; Elliott Steam

Tug Co. v. Shipping Controller, 1 K.B. 127 (1921); Byrd v.

English, 117 Ga. 191, 43 S.E. 419 (1903).6 Nowhere in the text

5 The Federal No. 2 was “abandoned” by our Circuit in

Black v. Red Star Towing & Transportation Co., 860 F.2d 30, 34

(2d Cir. 1988).

6 In The Federal No. 2, a seaman was injured due to the

negligence of a tug whose towing hawser swept the deck of the

barge on which he was working. The seaman could have sued for

negligence but did not. The owner of the barge was required

by its contract with the seaman to provide maintenance and

cure, and did so. The barge owner then made a claim against

the tug to recover the cost of providing maintenance and cure,

i.e., the hospital expenses. We ruled against recovery. 

After pointing out the barge owner had no right of

subrogation, we said that “damage suffered by one whose

interest in the party or thing is contractual is too remote

for recovery, unless the wrong is done with intent to affect

the contractual relations.” 21 F.2d at 314. Interestingly, we

cited our decision in Robins Dry Dock v. Flint, 13 F.2d 3 (2d

Cir. 1926), before it was reversed by the Supreme Court.

In Elliott Steam Tug, a time charterer sued the agency

that had requisitioned the vessel, seeking lost profits. In

dictum, before the Court upheld a statutory indemnity claim,

the Court said that the plaintiff had no claim at common law

for injury to its contractual rights. See 1 K.B. at 140.

In Byrd, a printing company lost power for several hours

during which it lost profits it could have earned. The loss

of power resulted from the excavation of a nearby site, which

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of Robins Dry Dock is there a broad statement that economic

losses for an unintentional maritime tort are not recoverable in

the absence of physical damage to the claimant’s property.

A leading treatise on maritime law has candidly

acknowledged that the broad rule is not to be found in Robins Dry

Dock. Referring to the broad rule, Professor Schoenbaum states,

“This is the interpretation accorded to the case of Robins Dry

Dock and Repair Co. v. Flint, 275 U.S. 303 (1927).” 1 Thomas J.

Schoenbaum, Admiralty and Maritime Law § 5-16, at 317 n.3 (5th

ed. 2011) (emphasis added), and also acknowledges that the

“Robins Dry Dock holding was later transformed into a bright-line

rule against liability for pure economic loss that has been

consistently applied in admiralty in a wide variety of contexts

. . . .” 2 Schoenbaum, supra § 18-4, at 319 (emphasis added).

Since Robins Dry Dock, the Supreme Court has cited it 

three times, all without illuminating its meaning. In

Aktieselskabet Cuzco v. The Sucarseco, 294 U.S. 394, 404 (1935),

the Court only distinguished the narrow contract rule of Robins

Dry Dock. In Caldarola v. Eckert, 332 U.S. 155, 158 (1947), it

caused a quantity of earth to fall on underground conduits

through which an electric company’s power lines ran. The

plaintiff sued the company doing the excavating, relying on

the plaintiff’s contract with the company that supplied

electric power. The Court rejected the claim, ruling that the

wrong was done to the power company, and that the plaintiff

had only a claim against the power company, not the excavating

company. See 43 S.E. at 420-21.

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simply noted that no claim was made under the narrow contract

rule of Robins Dry Dock. The third case, East River Steamship

Corp. v. Transamerica Delaval, Inc., 476 U.S. 858 (1986), was a

products liability ruling, made under maritime law. The Court’s

narrow holding was that “a manufacturer in a commercial

relationship has no duty under either a negligence or strict

products-liability theory to prevent a product from injuring

itself.” Id. at 871. Notably, the Court explicitly left open

the question whether a broad rule is to be derived from Robins

Dry Dock:

We do not reach the issue whether a tort cause

of action can ever be stated in admiralty when

the only damages sought are economic. Cf.

Ultramares Corp. v. Touche, 255 N.Y. 170, 174

N.E. 441 (1931). But see Robins Dry Dock &

Repair Co. v. Flint, 275 U.S. 303 (1927).

East River, 476 U.S. at 871 n.6.

Two opinions of Courts of Appeals have thoughtfully

endeavored to explain why the broad rule attributed to Robins Dry

Dock exists: State of Louisiana ex rel. Guste v. M/V TESTBANK,

752 F.2d 1019, 1022 (5th Cir. 1985) (in banc), and Barber Lines

A/S v. M/V Donau Maru, 764 F.2d 50 (1st Cir. 1985).

 The argument that such a broad rule is implicit in the

narrow rule that Justice Holmes stated was expressed by Judge

Higginbotham for the 10-5 majority of the in banc court in Guste. 

Guste involved numerous claims for economic losses suffered as

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a result of the temporary closing of the Mississippi River Gulf

outlet because of chemicals that had spilled into the outlet

after a collision of two vessels. None of the plaintiffs claimed

to have had a contract with either of the vessels involved in the

collision.7 After noting the plaintiffs’ attempt to limit Robins

Dry Dock to claimants relying on a contract with the victim of

a maritime tort, Judge Higginbotham seemed to find the broader

rule implicit in what he terms Justice Holmes’s “delphic”

opinion. Guste, 752 F.2d at 1022. Judge Higginbotham stated:

If a time charterer’s relationship to its

negligently injured vessel is too remote,

other claimants without even the connection of

a contract are even more remote.

752 F.2d at 1023.

For Judge Higginbotham, the rationale animating the

narrow rule of Robins Dry Dock was the avoidance of recovery for

losses thought to be too remote from a defendant’s negligence,

from which he reasoned that claimants without a contract to a

party suffering a tort are more remote than claimants with a

contract. Although we agree that remoteness of losses is always

relevant to tort recoveries, a concept usually expressed in terms

of the extent of the tortfeasor’s duty, see Palsgraf v. Long

Island R.R., 248 N.Y. 339, 162 N.E. 99 (1928), or foreseeability

7 The opinion does not indicate which vessel was

considered the maritime tort victim, perhaps because

negligence was apportioned between the two colliding vessels.

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or proximate cause, see In re Kinsman Transit Co. (“Kinsman II”),

388 F.2d 821, 823 (2d Cir. 1968),8 we are not as sure as Judge

Higginbotham that the losses of a claimant without a contract

with a tort victim are inevitably more remote from the tort than

the losses of those with such a contract.9 Even if the drydocker

8 “In the final analysis, the circumlocution whether

posed in terms of ‘foreseeability,’ ‘duty,’ ‘proximate cause,’

‘remoteness,’ etc. seems unavoidable.” Kinsman II, 388 F.2d at

825.

9 In dissent, Judge Wisdom has endeavored to refute Judge

Higginbotham’s argument that a claim for economic losses in

the absence of a contract with the tort victim is inevitably

less meritorious than a claim invoking such a contract:

This argument would be sound in instances where

the plaintiff suffered no loss but for a contract

with the injured party. We would measure a

plaintiff’s connection to the tortfeasor by the only

line connecting them, the contract, and disallow the

claim under Robins [Dry Dock]. In the instant case

[involving an economic loss resulting from a

collision of two ships producing an oil spell that

blocked a Mississippi outlet to all shipping],

however, some of the plaintiffs suffered damages

whether or not they had a contractual connection

with a party physically injured by the tortfeasor. 

These plaintiffs do not need to rely on a contract

to link them to the tort: The collision proximately

caused their losses, and those losses were

foreseeable. These plaintiffs are therefore freed

from the Robins [Dry Dock] rule concerning the

recovery of those who suffer economic loss because

of an injury to a party with whom they have

contracted.

Guste, 752 F.2d at 1040 (Wisdom, J., with whom Rubin, Politz,

Tate, and Johnson, JJ, join, dissenting).

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in Robins Dry Dock could not reasonably foresee that the vessel

owner would charter his vessel, which strikes us as an unlikely

supposition, the drawbridge operator in the pending case could

surely have expected that its negligent delay in opening the

bridge for a vessel not chartered would likely cause economic

losses.

Judge Higginbotham also explained Robins Dry Dock as

based on “a principle . . . which refused recovery for negligent

interference with ‘contractual rights,’” Guste, 752 F.2d at 1022,

and on what he called the “well established” principle “that

there could be no recovery for economic loss absent physical

injury to a proprietary interest,” id. at 1023. Although this

principle has been articulated by distinguished torts

commentators, see, e.g., 4 Fowler V. Harper, Fleming James, Jr.,

Oscar S. Gray, The Law of Torts § 25.18A, at 619 (2d ed. 1986),

these same commentators have noted that “[c]ourts are, however,

beginning to disclaim the existence of any such ‘absolute rule,’

and to refer instead to the applicability of pragmatic

considerations,” id. at 619-20 n.1, and have more recently

observed that the “rule” is permeated with numerous exceptions,

see id. at 326 n. 9a (cumulative supp. 2005). Several of these

exceptions are catalogued in Union Oil Co. v. Oppen, 501 F.2d

558, 565-68 & n.9 (9th Cir. 1974). 

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Barber Lines, like Guste, also involved an oil spill

caused by a ship’s negligence, this one causing economic losses

to a vessel delayed from docking at its assigned berth. Unlike

Judge Higginbotham, however, then-Judge Breyer did not contend

that the rationale of Robins Dry Dock, which he called “[t]he

leading ‘pure financial injury’ case,” 764 F.2d at 51, was the

remoteness of the claimed economic losses. On the contrary, he

“assume[d] that the [financial] injury was foreseeable.” Id. Nor

did he express the view that the absence of a contract between

the claimant and a tort victim made the claim more remote than

that of a claimant with a contract. Indeed, he stated that

“[t]he authority that Justice Holmes says contains a ‘good

statement’ of the legal principle does not, however, turn so much

on the existence of a formal contract as on the existence of

limitations upon tort recovery for financial injury.” Id. (citing

Elliott Steam and Byrd).10

10 In a somewhat perplexing attempt to show that the

circumstances of the claim in Barber Lines were not

significantly different than those of the claim in Robins Dry

Dock, then-Judge Breyer explicitly rejected a distinction

based on the time charterer’s contract. He stated that “the

present appellants must have had a ‘right’ to use the dock,”

that “interference with that ‘right’ caused the loss,” and

that “[i]t is difficult in this instance to see why the

technical legal label applied to that right should make a

legal difference.” 764 F.2d at 51. We can accept that the

claimant in Barber Lines likely had a right to use the dock,

which is arguably similar in law to the time charterer’s

contract with the vessel owner in Robins Dry Dock, but this

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Instead of relying on remoteness, he simply embraced

what he understood to be the holdings of post-Robins Dry Dock

cases, which, he stated, “refuse to hold a defendant liable for

negligently caused financial harm without accompanying physical

injury or other special circumstances.” Id. at 53. And he

candidly acknowledged that he favored the broad rule claimed to

be derived from Robins Dry Dock because of “pragmatic or

practical administrative considerations which, when taken

together, offer support for” the broad rule. Id. at 54 (emphasis

in original). Among these, he noted, were that “[t]he number of

persons suffering foreseeable financial harm in a typical

accident is likely to be far greater than those who suffer

traditional (recoverable) physical harm,” id.; the share of

amounts paid by tort suit defendants to victims is less than the

share of premium dollars earned by insurance companies that is

paid out to victims who insure themselves; and the typical victim

of financial losses is a business firm that is able to purchase

first-party insurance, see id. at 54-56. Judge Higginbotham also

invoked these considerations. See Guste, 752 F.2d at 1029.

comparison overlooks the very point Justice Holmes was making:

the time charterer was trying to benefit from a contract it

had with the victim of a tort; the dock in Barber Lines

suffered no tort injury, and the claimant was not trying to

use its right (or contract) to dock to support its claim.

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Other circuits have also found in Robins Dry Dock a

broad rule barring economic losses for unintentional maritime

torts in the absence of physical injury. See Channel Star

Excursions, Inc. v. Southern Pacific Transportation Co., 77 F.3d

1135, 1137-38 (9th Cir. 1996); Getty Refining & Marketing Co. v.

MT FADI B, 766 F.2d 829, 831-33 (3d Cir. 1985); Kingston Shipping

Co. v. Roberts, 667 F.2d 34, 35 (11th Cir. 1982); see generally

Trey D. Tankersley, The Robins Dry Dock Rule: The Tar Baby of

Maritime Tort Law, 25 Tul. Mar. L. J. 371 (2000) (The “Tar Baby”

allusion is borrowed from Judge Wisdom’s dissent in Guste, 752

F.2d at 1035.). In the Fourth Circuit, Robins Dry Dock was

followed to disallow a time charterer’s claim for lost profits,

but its claim for the amount it paid the owner for the period the

vessel was out of service was allowed. See Venore Transportation

Co. v. M/V Struma, 583 F.2d 708, 710-11 (4th Cir. 1978). The

Ninth Circuit has made exceptions to a broad Robins Dry Dock rule

for seamen’s lost wages, see Carbone v. Ursich, 209 F.2d 178,

181-82 (9th Cir. 1954), and commercial fishermen’s lost profits

resulting from an oil spill, see Union Oil, 501 F.2d at 565-71.

Our Circuit’s view of the broad rule attributed to

Robins Dry Dock has followed a somewhat uneven course. Prior to

the Supreme Court’s decision, our Court had allowed the time

charterer’s claim for economic losses when the case was here, see

Flint v. Robins Dry Dock & Repair Co., 13 F.2d 3, 5-6 (2d Cir.

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1926), rev’d, 275 U.S. 303 (1927), deeming the economic losses

to have been the “proximate results” of the tortfeasor’s

negligence, id. at 6.

Our first direct reckoning with the Supreme Court’s

decision in Robins Dry Dock occurred in Agwilines, Inc. v. Eagle

Oil & Shipping Co., 153 F.2d 869 (2d Cir. 1946).11 Agwilines is

a slightly more complicated version of Robins Dry Dock. The

owner of a time chartered ship, the Agwidale, sued the owner of

the San Veronica, with which it had collided. Pursuant to the

charterparty, the time charterer paid the Agwidale’s owner for

an interval when the Agwidale was out of service. The Agwidale’s

owner then sued the San Veronico’s owner for what was alleged to

be the time charterer’s loss. Judge Learned Hand’s opinion for

a divided panel12 rejected the claim stating:

11 Two prior decisions had cited Robins Dry Dock for the

accepted proposition that liability would exist for an

intentional interference with contractual relations. See New

York Trust Co. v. Island Oil & Transport Corp., 34 F.2d 649,

652 (2d Cir. 1929); Sidney Blumenthal & Co. v. United States,

30 F.2d 247, 249 (2d Cir. 1929). A third prior decision, The

Toluma, 72 F.2d 690, 693 (2d Cir. 1934), aff’d sub nom.

Artieselskabet Cuzco v. The Sucarseco, 294 U.S. 394 (1935),

had cited Robins Dry Dock for what we have called the “narrow

rule,” but found the rule inapplicable because of the special

circumstances that the claim was for return of a cargo owner’s

contribution in general average, which had been made pursuant

to a so-called “Jason clause,” (named for The Jason, 225 U.S.

32 (1912)). See The Toluma, 72 F.2d at 693-94.

12 Judge Clark dissented. Agwilines, 153 F.2d at 872.

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[The Supreme Court] thought that the only

basis for charging the drydocker with

liability was because he had prevented the

performance of the charterparty by the

promisor – the owner – and that interference

by a third person with the performance of a

contract was an actionable wrong only if it

was intentional. The Court thought it

irrelevant that this resulted in exonerating

the drydocker from nearly all liability

through the fortuity that the profitable use

of the ship had been divided between the owner

and the charterer: The difficulty went deeper;

the drydocker had committed no legal wrong

against the charterer a[t] all, though he had

caused it serious damage.

Id. at 871. Thus, Agwilines appears to have recognized both a

narrow Robins Dry Dock rule – the contract with the owner does

not help the time charterer – and a broad rule – a negligent

tortfeasor has no legal liability for economic losses in the

absence of physical damage.

Our next significant consideration of Robins Dry Dock

occurred in Kinsman II, 388 F.2d 821 (2d Cir. 1968), so named

because it was preceded by In re Kinsman Transit Co. (“Kinsman

I”), 338 F.2d 708 (2d Cir. 1964).13 The Kinsman litigation

13 Decisions of our Court citing Robins Dry Dock after

Agwilines and before Kinsman I and II shed no new light on its

proper interpretation. See Paragon Oil Co. v. Republic

Tankers, S.A., 310 F.2d 169, 175 (2d Cir. 1962) (bailee

entitled to value of damaged goods); Hanlon v. Waterman

Steamship Corp., 265 F.2d 206, 207 (2d Cir. 1959) (claimant

not third-party beneficiary of contract); International

Brotherhood of Electrical Workers v. NLRB, 181 F.2d 34, 38 &

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concerned an extraordinary series of calamities of the sort more

likely found in a law school torts exam than occurring in the

real world. In brief, a vessel, inadequately moored, drifted

down the Buffalo River, and collided with another vessel; both

vessels drifted farther down the river and collided with a third

vessel; a lift bridge farther downstream was not raised despite

a warning; the second vessel crashed into the bridge causing a

tower to fall into the river; the obstruction formed by the first

two vessels and ice caused water to overflow the river banks; the

overflowing water damaged a grain elevator located three miles

upstream. The facts are more fully elaborated in Kinsman I, 338

F.2d at 711-713, 714-16.

Judge Friendly upheld the various claims for physical

injuries to property, deeming them foreseeable under traditional

tort principles. He acknowledged, however, that “[s]omewhere a

point will be reached when courts will agree that the link

[between negligent conduct and injury] has become too tenuous –

that what is claimed to be consequence is only fortuity.” Id. at

725. In the absence of a claim for economic losses, he had no

occasion to consider Robins Dry Dock.

n.11 (2d Cir. 1950) (referring generally to tort of

interference with contractual obligation); Conmar Products

Corp. v. Universal Slide Fastener Co., 172 F.2d 150, 155 & n.2

(2d Cir. 1949) (same); Ozanic v. United States, 165 F.2d 738,

743 (2d Cir. 1948) (vessel owner’s contract to pay part of

economic losses of crew members could not create liability for

second vessel with which first vessel collided).

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Claims for economic losses were before us, however, when

the same litigation returned four years later in Kinsman II. 

Cargill, Inc., sought to recover the expenses of its extra

transportation and storage costs incurred because the river

flooding prevented it from unloading wheat on a vessel in the

Buffalo harbor, and it was obliged to obtain replacement wheat

to fulfill its contracts. See Kinsman II, 388 F.2d at 823. 

Cargo Carriers, Inc., sought to recover the extra expenses of

unloading its cargo of corn from yet another vessel that had been

struck by the original two colliding vessels, the damage to this

vessel necessitating special equipment for unloading cargo. See

id.

Judge Kaufman began his consideration of these claims

by noting that the District Court, in the absence of proof of

intentional interference with contracts, had rejected what the

Court deemed interference-with-contract claims on the authority

of Robins Dry Dock. See id. He then stated, “We too deny recovery

to the claimants, but on other grounds.” Id. Leaving what he

termed “the rock-strewn path of ‘negligent interference with

contract,’” he grounded decision on “more familiar tort terrain.”

Id. at 824. Judge Kaufman rejected the claims as simply “too

‘remote’ or ‘indirect’ a consequence of defendants’ negligence.”

Id. Rather than invoking the narrow rule of Robins Dry Dock,

-20-
rejecting a claim for economic losses sought to be based on the

victim’s contractual relation to an injured vessel, or the broad

rule identified in Agwilines, rejecting all claims for economic

losses in the absence of physical injury, Judge Kaufman used the

traditional tort concept of foreseeability and rejected the

claims as too remote. Id. at 825. All that he drew from Robins

Dry Dock was Justice Holmes’s statement, appended to his

rejection of a contract-related claim, that “[t]he law does not

spread its protection so far.” Id. (quoting Robins Dry Dock, 275

U.S. at 309).14

Seven years later, however, a panel with two members

from the Kinsman II panel (Judges Kaufman and Feinberg)

explicitly applied Robins Dry Dock to reject a time charterer’s

claim for economic losses. See Federal Commerce & Navigation Co.

14 In Guste, Judge Higginbotham endeavored to enlist

Kinsman II in support of his categorical rejection of economic

losses in the absence of physical injury by claiming that

Judge Kaufman had recognized “the need for the imposition of

limitations on recovery for the foreseeable consequences of an

act of negligence,” an analysis he deemed “compatible with our

own.” Guste, 752 F.2d at 1026 (emphasis added) (footnote

omitted). In fact, Judge Kaufman had rejected liability

because he thought the claimed losses were not foreseeable.

Kinsman II, 388 F.2d at 824-25. As Judge Wisdom noted in

Guste, Kinsman II “rejected the requirement of physical

damages without even bothering to distinguish Robins, and

instead relied on customary negligence principles.” Guste, 752

F.2d at 1042 (Wisdom, J., with whom Rubin, Politz, Tate, and

Johnson, JJ, join, dissenting).

-21-
v. M/V Marathonian, 528 F.2d 907, 908 (2d Cir. 1975). The per

curiam opinion noted an effort “to justify the [narrow] rule [of

Robins Dry Dock] on the basis of remoteness of injury,” and

added, perhaps nostalgically, “If free to do so, we might

question whether at least the damage to the principal time

charterer is not so reasonably to be expected as to justify

recovery.” Id. (citing Kinsman II). The retreat from Kinsman II

is brought into sharp focus by the District Court’s opinion,

which our Court labeled “considered and thorough,” id. at 907,

in which Judge Canella had written:

[W]ere this Court . . . not constrained by the

weight of precedent, we would reject the

negligent interference with contract doctrine

in favor of a negligence-causationforeseeability analysis, such as that adopted

by Chief Judge Kaufman in Petition of Kinsman

Transit Co. [Kinsman II].

Federal Commerce & Navigation Co. v. M/V Marathonian, 392 F.

Supp. 908, 913 (S.D.N.Y. 1975).

Our Court’s next three encounters with Robins Dry Dock

before today were all non-precedential summary orders, each of

which, without elaboration, approved or announced what has become

the broad rule that economic losses for an unintentional maritime

tort are not recoverable in the absence of physical injury. In

Allders International (Ships) Ltd. v. United States, 100 F.3d 942

(2d Cir. 1996) (summary order), we rejected a claim by a

-22-
concessionaire that lost revenue when a cruise ship canceled

voyages because of a grounding accident. We affirmed “for

substantially the same reasons set forth” in the District Court’s

opinion, id. at 942, in which Judge Martin had dismissed as dicta

the tort-based approach of Kinsman II in favor of a “bright line

approach.” Allders International (Ships) Ltd. v. United States,

No. 94 CIV. 5689, 1995 WL 251571, at *1-2 (S.D.N.Y. Apr. 28,

1995). Next came the two summary orders on which Judge

Engelmayer relied in the pending case, Gas Natural, 2008 WL

4643944, at *1 (stating “a bright line rule barring recovery for

economic losses caused by an unintentional maritime tort absent

physical damage to property in which the victim has a proprietary

interest”) (emphases and internal quotation marks omitted), and

G & G Steel, 380 Fed. App’x at 104 (same).

Although, since Marathonian, we have not considered

Robins Dry Dock in a published opinion, the district court

decisions in our Circuit, in addition to Judge Engelmayer’s

decision in the pending case, have regularly invoked the “bright

line rule” barring economic losses in the absence of physical

damage. See G & G Steel, Inc. v. Sea Wolf Marine Transportation,

LLC, No. 06 Civ. 1840, 2008 WL 192049, at *3 (S.D.N.Y Jan. 23,

2008); Gas Natural SDG S.A. v. United States, No. 04 CIV. 8370,

2007 WL 959259, at *6 & n.5 (S.D.N.Y. Mar. 22, 2007); Conti Corso

-23-
Schiffahrts-GMBH & Co. KG NR. 2 v. M/V “Pinar Kaptanoglu”, 414

F. Supp. 2d 443, 446-47 (S.D.N.Y. 2006); Brown v. Royal

Caribbean Cruises, Ltd., No. 99 Civ. 11774, 2000 WL 34449703, at

*5 (S.D.N.Y. Aug. 24, 2000); American Dredging v. Plaza Petroleum

Inc., 845 F. Supp. 91, 93 (E.D.N.Y. 1993); Plaza Marine, Inc. v.

Exxon Corp., No. 92 Civ. 1189, 1992 WL 197398, at *1 (S.D.N.Y.

Aug. 5, 1992).

Having surveyed the field and our own slightly wavering

contribution to it, we now explicitly accept the broad rule

attributed to Robins Dry Dock that economic losses are not

recoverable for an unintentional maritime tort in the absence of

physical injury, mindful that for some categories of claims,

exceptions may well be appropriate. We see little point in

endeavoring to determine whether the broad rule that has been

attributed to Robins Dry Dock was implicit in that decision or

has resulted from an unstated extension of the narrow rule there

announced. Instead, as then-Judge Breyer did in Barber Lines,

we simply accept the broad rule, and do so for four main reasons. 

First, the rule has been accepted by a clear consensus of courts

throughout the country, including many district courts within our

Circuit. Second, Congress, possessing full authority to

legislate on maritime matters, see Panama Railroad Co. v.

Johnson, 264 U.S. 375, 386 (1924), has neither altered the broad

-24-
rule nor made any serious attempts to do so.15 Third, the rule

has the virtue of certainty.16 Fourth, the context in which the

broad rule primarily applies – financial losses incurred in the

course of commercial shipping – is marked by the well recognized

availability of first-party insurance to cover such losses and

the frequent purchase of such insurance.17

15 Judge Rubin, in dissent in Guste, has replied to this

point:

The constitutional grant of jurisdiction to federal

courts over cases and controversies not only

empowers but requires us . . . to decide . . . cases

within our jurisdiction whether or not Congress has

provided a rule of decision and even when we think

Congress should have acted and has not done so.

Guste, 752 F.2d at 1053 (Rubin, J., with whom Wisdom, Politz,

and Tate, JJ, join, dissenting).

16 Even in dissent, Judge Wisdom acknowledged this virtue:

There is only one justification for the requirement

of physical injury: If Robins [Dry Dock] establishes

a policy of restricting the type of plaintiff who

can recover for a defendant’s negligence, physical

property damage furnishes an easily discernible

boundary between recovery and nonrecovery.

Guste, 752 F.2d at 1045 (Wisdom, J., with whom Rubin, Politz,

Tate, and Johnson, JJ, join, dissenting). 

17 In dissent in Guste, Judge Wisdom disputed the validity

of this factor:

The Robins [Dry Dock] approach

restricts liability more severely than the

policies behind limitations on liability

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We are not unsympathetic to the Appellant’s earnest plea

that, even if a broad Robins Dry Dock rule exists, recovery could

be allowed in this case without countenancing an unbounded

exposure of maritime tortfeasors to a vast number of economic

loss claims that would stretch the concept of foreseeability up

to and often beyond any discernible limit. It was surely

foreseeable that an operator who had opened a drawbridge to let

vessels move upriver and negligently failed to open the bridge

when the vessels returned will cause economic losses to at least

some of the vessels expecting to pass under the bridge. And when

that operator is a governmental entity, the burden of such

foreseeable losses can be spread narrowly through user fees or

broadly through taxation.18 Although the argument for a factrequire and imposes the cost of the

accident on the victim, who is usually not

in a superior position to obtain insurance

to cover this loss.

752 F.2d at 1052 (Wisdom, J., with whom Rubin, Politz, Tate,

and Johnson, JJ, join, dissenting).

18 Discussing the liability of the municipal operators of

a drawbridge, the negligently delayed opening of which

contributed to a variety of claims for physical damage, Judge

Friendly wrote:

Here it is surely more equitable that the losses

from the operators’ negligent failure to raise the

Michigan Avenue Bridge should be ratably borne by

Buffalo’s taxpayers than left with the innocent

victims of the flooding.

Kinsman I, 338 F.2d at 726.

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specific exception to Robins Dry Dock gives us pause, we

ultimately conclude that the case for such an exception on the

particular facts here is outweighed by the benefits of adhering

to the general rule that denies recovery for economic losses from

unintentional maritime torts in the absence of physical damage. 

In weighing the case for exceptions to the general rule, the

benefits of its certainty, the customary use of first-party

insurance to mitigate or eliminate its effects, and its long

recognized establishment within maritime jurisprudence weigh

heavily.19

Conclusion

The judgment of the District Court is affirmed.

19 American seeks to draw support for its position from 33

U.S.C. § 494, which imposes duties upon bridge owners and

operators. Recognizing that the statute does not create an

implied private right of action, American nonetheless contends

that it states a federal policy that we should enlist to

narrow the broad rule of Robins Dry Dock. We are not

persuaded. Accepting American’s suggestion would effectively

adopt a statutory private right of action in the guise of a

tort rule.

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