News

News

Southern District of New York Dismisses Case Brought by Barge Owner for City of New York's Failure to Open Drawbridge to Vessel Traffic

In American Petroleum and Transport Inc. v. The City of New York, the United States District Court for the Southern District of New York dismissed an action commenced by a barge owner against the City of New York (hereinafter the "City") for the City's failure to open a drawbridge to vessel traffic, reaffirming the longstanding rule that a plaintiff cannot recover economic losses caused by an unintentional maritime tort where the plaintiff has not suffered personal injury or physical damage to its property. 

The Plaintiff, American Petroleum and Transport Inc. (hereinafter "American"), owned a barge and had chartered a tug that was scheduled to enter the Hutchinson River on March 1, 2011 and cross under the Pelham Parkway Bridge.  However, the Pelham Parkway drawbridge, owned and/or operated by the City, failed to open to vessel traffic.  American alleged that the City had been timely notified of the need for the drawbridge to be open to permit the tug and barge to pass under the bridge and the City's failure to have the drawbridge operational resulted in American suffering significant economic damages.  The drawbridge's functionality was not restored until March 3, 2011, and the drawbridge did not open to vessel traffic until later that afternoon.  As a result of the drawbridge's closure, the tug and barge were delayed by approximately two and a half days.  American alleged that they suffered monetary damages, but did not allege any property damage or other physical injury.

The City moved to dismiss the action on the grounds that, under a line of maritime tort law cases tracing from Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303 (1927), recovery is barred for economic loss in the absence of physical harm.  In Robins Dry Dock, the propeller of a vessel was negligently damaged while undergoing scheduled maintenance.  The damage delayed the vessel's return to operation for two (2) weeks.  Suit was brought to recover for the lost profits while the vessel was out of operation.  The United States Supreme Court denied recovery and held that the loss arose only as a result of the lost benefit of potential contracts and was not recoverable in tort. 

In American Petroleum, the District Court stated that although the facts of Robins Dry Dock were not exactly on point, decisions from the Second Circuit Court of Appeals have extracted from Robins Dry Dock a broader prohibition with respect to maritime tort suits.  Specifically, the Second Circuit's precedents interpret the Robins Dry Dock rule to effectively bar recovery for economic losses caused by an unintentional maritime tort, absent physical damage to property in which the victim has a proprietary interest.    

Accordingly, the District Court judge dismissed the action because American only alleged an economic loss, and did not allege any physical damage or property damage as a result of the temporary closure of the Pelham Parkway drawbridge, and thus could not recover in maritime tort. 

Read a copy of the Southern District of New York's opinion

For more information concerning this decision and its application to any specific set of facts and circumstances, please do not hesitate to call on us at info@chaloslaw.com

Chalos & Co, P.C.
International Law Firm
www.chaloslaw.com
Email: info@chaloslaw.com

© 2016 Chalos & Co, P.C. Site by Webline Designs