Court Opinion

ID: 8919690
Source: CourtListenerOpinion
Date Created: 2022-11-27 06:08:19.852734+00
Date Added: 2024-06-11T17:09:16.089074
License: Public Domain

WISDOM, Circuit Judge,
concurring.
I write separately to suggest that the Fifth Circuit Court of Appeals reconsider this case en banc.
The Fifth and Eleventh Circuit decisions cited in the panel opinion have extended the Robins doctrine far beyond the actual holding of the Supreme Court in that case. In Robins, the propeller of a ship was negligently damaged by the operators of a shipyard. This damage caused a delay in the return of the ship to sea, and a party who had chartered the ship sued the shipyard for the charterer’s economic losses that were sustained because of the delay. The plaintiff won in the trial court and on appeal to the Second Circuit Court of Appeals. The Supreme Court reversed, holding that the shipyard’s damage to the propeller wronged only the owner of the ship. The Court further held that, because the charterer’s contract with the shipowner was unknown to the repair yard, the contract was a matter of indifference to the yard. Therefore, negligent interference with the contract would furnish no basis for an action against the shipyard for profits lost by the charterer. As the Court stated,
[the plaintiff’s] loss arose only through [its] contract with the owners — and while intentionally to bring about a breach of contract may give rise to a cause of action, no authority need be cited to show that, as 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.
275 U.S. at 308-09, 48 S.Ct. at 135 (citations omitted).
Thus, Robins holds only the following: if a defendant’s negligence injures party A, and the plaintiff suffers economic loss because it had a contract with A, the plaintiff has no cause of action against the defendant based on the defendant’s negligence. The Fifth Circuit has extended Robins unnecessarily by establishing an absolute requirement of physical property damage. This extension is certainly not required by Robins, and the physical-damage requirement is itself artificial.1 There is only one justification for this requirement: given that Robins 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 nonrecov-ery.
In my opinion, the utility derived from having a “bright line” boundary does not outweigh the disutility caused by the limitation on recovery imposed by the physical-damage requirement. In Robins a great judge, Oliver Wendell Holmes, had an off-day.2 If the Court were writing on a blank *751slate, I would recommend holding the defendants liable for all of the harm proximately caused by their negligence. The resulting liability in accidents such as the one here would indeed be large, but it could be handled by the insurers of the shipping companies. Placing the losses on the shippers’ insurers would ensure that the shipping industry pays for all of the costs that result from the activities of the industry. Such a result would be fairer to persons who were injured by the activities of the shipping industry, and it would also induce the industry to adopt measures to minimize the harm that the industry imposes on others. The Court’s concern with preventing the filing of lawsuits of a highly speculative nature, see Akron, 706 F.2d at 153, can be adequately addressed within the doctrinal context of traditional tort requirements of foreseeability and proximate causation.
But of course, the Court is not writing on a blank slate; we must follow Robins. Nonetheless, we need not extend Robins beyond the holding of that case. The Fifth Circuit Court of Appeals should reconsider this case en banc and repudiate the doctrine that physical property damage is prerequisite to recovery of economic losses. In a situation such as that presented by the instant case, the only parties who should be precluded from recovering are those who sustain economic losses because they have contractual dealings with persons who are directly injured by the defendant’s negligence. This result is both fairer and more justifiable economically than the result mandated by Akron.

. For example, if a vessel negligently crashes into one marina and then sinks, thereby blocking all access to another marina, the first marina may recover all of its consequential economic losses, but the second may not.

. As legal historians have noted, Justice Holmes attempted throughout his career to restrict liability as much as possible. See G. Gilmore, The Death of Contract 14-17 (1974). This concern for limiting liability is out of step with contemporary tort doctrine.