Louisiana Maritime Law: What is the “Physical Injury to Proprietary Interest” Rule?
Written by Kristin Lausten
Under some circumstances, a maritime negligence claim can be defended/defeated by invoking the rule that a plaintiff cannot recover for economic loss unless the loss was accompanied by a physical injury to property in which the plaintiff had some proprietary interest. Throughout the United States, this rule is often called the Robins Dry Dock rule from the US Supreme Court case (although here in the Fifth Circuit, the rule is often called the TESTBANK rule). See Robins Dry Dock v. Flint, 275 U.S. 303 (US Supreme Court 1927); Louisiana ex rel. Guste v. M/V TESTBANK, 752 F.2d 1019 (5th Cir. 1985) (en banc).
An “economic loss” would be something like lost profits or a repair cost if there was damage to a vessel. A “physical injury” would be something like damage to the vessel or oil covering your property requiring clean-up.
A good simple example comes from a case in New York. In that case, New York City operated a movable drawbridge that allowed various boats and vessels to navigate up and down the Hutchinson River. In March 2011, a the tugboat and barge passed upstream under the opened bridge and then several days later, requested the city to open the bridge for the downstream voyage. However, there was a mechanical malfunction with the bridge and the tugboat and barge were delayed for approximately two and one-half days. The owners and operators sued New York City for loss of use and lost profits — economic losses — related to those two and one-half days.
However, the claims for those economic losses were dismissed because the economic losses were not accompanied by any physical injury or damage to the tugboat and/or the barge. See American Petroleum and Transport, Inc. v. New York City, 737 F. 3d 185 (US Court of Appeals, 2nd Cir. 2013).
The tugboat/barge case is a simple example, but the Robins Dry Dock rule is slightly more complicated. The rule is not so much that there must be a physical injury; rather there must be a physical injury to physical property owned by the person/entity making the claim in the lawsuit. Thus, in the actual case of Robins Dry Rock, there WAS a physical injury: a dry docking company damaged a propeller on a steamship, rendering the vessel unusable for two weeks. The owner of the vessel could certainly have sued for economic losses. However, in Robins Dry Dock, the plaintiff was the time charterer of the vessel, not the owner of the vessel. A time charterer is a person or company who contracts with the owner for use of the vessel. In Robins Dry Dock, the time charterer sued the dry dock company to recover for loss of use of the steamship — lost profits and other economic losses — suffered during the two weeks when the propeller was being repaired.
The US Supreme Court rejected the claim for economic losses. The claims were dismissed NOT because there was no physical injury — there was — but because the physical injury was not to property owned by the plaintiff. The time charterer had no proprietary/ownership interest in the vessel.
The Robins Dry Dock rule is justified as a limit on the possible liability that can be imposed for any given maritime tort. It also provides a bright line rule which avoids the vague, uncertain, and complicated factual inquiries necessary to make proximate cause and foreseeability determinations.
The leading Fifth Circuit case is TESTBANK. In TESTBANK, two vessels collided in the Mississippi River Gulf outlet causing an enormous toxic spill of pentachlorophenol into the waters and surrounding marshlands. The Coast Guard closed the outlet to navigation for about three weeks and all fishing, shrimping, and related activity was suspended in the outlet and in the surrounding four hundred square miles of marsh and waterways. Approximately 41 lawsuits were filed, many from businesses in the fishing, shrimping, and related industries. However, most of those cases were dismissed based on the Robins Dry Rock rule. If the various claimants had no proprietary interest in the vessels that were damaged, their economic losses were barred by the rule.
Defending Louisiana Maritime Cases: Contact New Orleans Attorney Kristin M. Lausten
If you need additional information, contact Louisiana defense attorney Kristin M. Lausten. Ms. Lausten has experience in maritime law and defends complex tort litigation in both state and federal courts. She can be contacted at 504.377.6585 or via email at firstname.lastname@example.org.
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Kristin M. Lausten
This article is provided as an educational service for general informational purposes only. The material does not constitute legal advice or rendering of professional services.