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.
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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.      Plaintiff-

Appellant 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,


                                 -2-
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.

                                -3-
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



                                      -4-
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


                                     -5-
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.

                                      -6-
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).

                                      -7-
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

                                   -8-
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.

                                      -9-
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



                                     -10-
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.

                                   -11-
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).


                              -12-
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).




                                    -13-
            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

                               -14-
            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.

                                      -15-
          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.


                                -16-
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.

                                    -17-
            [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 &


                                 -18-
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).


                                -19-
         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-causation-
             foreseeability 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


                                 -25-
            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 fact-


               require 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.


                                 -26-
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.


                                   -27-
