Opinion ID: 62970
Heading Depth: 3
Heading Rank: 2

Heading: Fifth Circuit Application

Text: In Nicor Supply Ships Associates v. General Motors Corp., 876 F.2d 501 (5th Cir.1989), the Fifth Circuit observed that the Supreme Court in East River had not discussed whether the purchaser of a vessel may recover in tort against the manufacturer for failing to warn of a defect in that product. Id. at 503. The Fifth Circuit refused to allow the purchaser to maintain a tort claim for failure to warn of a defect known at the time of manufacture, commenting on the unfortunate pleading effect such an exception might create: Were we to allow Nicor to succeed on its [failure to warn] claim, we would invite all purchasers of self-damaging products that were negligently manufactured but beyond the coverage of the warranty to style their complaints in terms of the manufacturer's negligent failure to warn of a known defect. Permitting recovery on such grounds would frustrate the Supreme Court's plain intention that a manufacturer be liable for the damages a product causes to itself as a result of negligent manufacture only to the extent that the parties have contractually agreed to apportion such liability. Id. at 504. While noting the possible exception to East River,  as articulated in Miller Industries and potentially left open by footnote 6 of East River, the court determined that the specific facts in Nicor made it unnecessary to decide the issue: [W]e intimate no opinion concerning whether Nicor would have stated a cause of action had it alleged that General Motors had discovered a defect in the ... engine after its manufacture. Id. at 505 (emphasis added). Only one court in the Fifth Circuit has held that the East River doctrine does not apply to allegations of post-sale negligence. See Brown v. Eurocopter S.A., 143 F.Supp.2d 781, 783 (S.D.Tex.2001). In the absence of a Fifth Circuit decision on point, the district court in Brown chose to follow the reasoning of the Eleventh Circuit in Miller Industries rather than that of the Third Circuit in Sea-Land. We disapprove the holding in Brown, which was not appealed. Recently, a panel of this court declined to make an  Erie guess that Texas would carve out an exception to its state economic loss rule for claims of post-sale negligence based on a defendant's failure to warn of defects discovered after manufacture. The court commented in dicta that: Miller is ... seemingly no longer good law. The United States Supreme Court adopted the economic loss rule in [ East River ]. Because Miller predates East River, the exception recognized in Miller Industries arguably has little force. This is particularly true in light of the fact that the Court was aware of Miller, having cited it as an example of cases where courts have refused to apply the economic loss rule. If the Court had agreed with the holding in Miller, it presumably also would have distinguished post-sale negligence claims from other negligence claims. Instead, the Court formulated the economic loss rule in broad language that left no room for this distinction. Mem'l Hermann, 524 F.3d at 679 n. 2 (5th Cir.2008) (citations omitted) (emphasis added). We likewise interpret the East River economic loss rule as a broad bar to tort claims for damage solely to the product itself. East River unequivocally held 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. East River, 476 U.S. at 871, 106 S.Ct. 2295. In explaining its rationale, the Court repeatedly emphasized the nature of the injury rather than the timing of the defendant's conduct. Furthermore, as recognized in Memorial Hermann, the Court referenced the holding in Miller Industries yet did not distinguish post-sale negligence claims from other negligence claims when pronouncing its broad economic loss rule. Finally, we note that our holding in this case will not remove the incentive for manufacturers to protect the public by warning of defects that may come to their attention because manufacturers will not know ahead of time what type of injuries might result from a known product defect. We follow the Third Circuit in Sea-Land and decline to recognize an exception to the East River doctrine for post-sale negligent failure to warn claims: [I]f the damage is solely to the product itself and is solely economic, there [can be] no tort recovery, Sea-Land, 134 F.3d at 156, and the purchaser is restricted to a warranty or contract cause of action under maritime law.