IN THE UNITED STATES
COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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Nos. 00-30611, 00-30944
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RESERVE MOORING INC
Plaintiff - Appellee
versus
AMERICAN COMMERCIAL BARGE
LINE, LLC;
ASSOCIATED TERMINALS, LLC
Defendants - Appellants
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Appeals from the United
States District Court for the
Eastern District of Louisiana
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May 16, 2001
Before GARWOOD, HALL,(1)
and BARKSDALE, Circuit Judges.
HALL, Circuit Judge:
I. Facts and Procedural
History
Plaintiff Reserve Mooring, Inc.
(Reserve) maintains a midstream mooring facility at Mile 138.3
on the Mississippi River. The mooring facility consists of five
buoys and anchor piles, which Reserve installed pursuant to a
permit from the United States Army Corps of Engineers.(2) On May 5, 1998, while moored at the
site, a barge owned and operated by defendant American Commercial
Barge Line (ACBL) sank while goods were being unloaded to it
from another barge owned by defendant Associated Terminals (Associated).
Although the accident did not cause any physical damage to the
mooring facility, the site remained blocked until salvage operations
were completed on August 20, 1998.
Reserve sued ACBL and Associated
in federal district court, invoking the district court's admiralty
jurisdiction. Reserve seeks to recover its lost income resulting
from the loss of use of the mooring site allegedly caused by
Defendants' negligence. Defendants twice moved for summary judgment,
arguing that Reserve is precluded from recovering its purely
economic losses under Louisiana ex rel. Guste v. M/V TESTBANK,
752 F.2d 1019 (5th Cir. 1985) (en banc), because (1) there was
no physical damage to the mooring facility, and (2) Reserve did
not have a proprietary interest in the facility. The district
court denied both motions in orders dated November 30, 1999,
and April 26, 2000. On June 27, 2000, the district court certified
both orders for immediate appeal.(3)
Defendants filed a timely petition for permission of appeal,
which this court granted on August 1, 2000.(4)
We thus have jurisdiction over Defendants' interlocutory appeal
pursuant to 28 U.S.C. § 1292(b).
II. Standard of Review
The district court's decisions on
a motion for summary judgment are reviewed de novo.
Maher v. Strachan Shipping Co., 68 F.3d 951, 954 (5th
Cir. 1995). Summary judgment is proper if there is no genuine
issue as to any material fact and the moving party is entitled
to judgment as a matter of law. Fed. R. Civ. P. 56(c); Maher,
68 F.3d at 954.
III. Discussion
Defendants contend that they are
entitled to summary judgment because Reserve did not suffer any
physical damage to a proprietary interest as required by Robins
Dry Dock and Repair Co. v. Flint, 275 U.S. 303 (1927), and
TESTBANK as a prerequisite to recovery of economic damages
in cases of unintentional maritime tort. Reserve does not dispute
that it suffered no physical damage to its buoys and anchor piles,
and that its suit is for lost income only.(5)
In Robins Dry Dock, the time
charterers of a vessel sued for the loss of use of the vessel
after the defendant dry dock negligently damaged the vessel's
propeller. The Supreme Court held 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." 275 U.S. at 309. Because the time charterers
had no property interest in the vessel, but only a contractual
relation with the vessel's owners, the Court denied recovery.
Id. at 308-09.
Sitting en banc, this court elaborated
on Robins Dry Dock in TESTBANK. The M/V TESTBANK
collided with another vessel in the Mississippi River Gulf Outlet
and caused a chemical spill, which resulted in the closure of
the outlet for several weeks. Suits were filed by shipping interests,
marina and boat rental operators, fishermen, shops, and restaurants
to recover their economic losses resulting from the loss of use
of the outlet. The court examined the "pragmatic limitation
on the doctrine of foreseeability" established in Robins
Dry Dock, and held that physical injury to a proprietary
interest is a prerequisite to recovery of economic losses in
cases of unintentional maritime tort. 752 F.2d at 1022-23, 1028-29.
In ruling on Defendants' motions
for summary judgment, the district court reasoned that the TESTBANK
rule is merely an application of the general requirement that
damage be foreseeable to be recoverable in tort. Therefore, the
court reasoned, plaintiffs may recover where, as here, there
was no physical damage but the harm was "clearly foreseeable."(6) However, in TESTBANK, this
court considered and rejected just such a case-by-case foreseeability
approach to recovery of economic damages in cases of unintentional
maritime tort. Id. at 1028-29. The court determined that
such an approach failed to provide a "determinable measure
of the limit of foreseeability." Id. at 1028. The
court instead chose the predictability afforded by the "bright
line" rule that allows plaintiffs to recover economic losses
only where the plaintiff has suffered physical injury to a proprietary
interest. Id. at 1029. This court has not retreated from
TESTBANK's physical injury requirement. See, e.g.,
Corpus Christi Oil & Gas Co. v. Zapata Gulf Marine Corp.,
71 F.3d 198 (5th Cir. 1995) (holding that the plaintiff's firing
of gas in order to save its gas wells after the defendant damaged
a gas riser owned by a third party constituted physical damage
to a proprietary interest that allowed the plaintiff to recover
for the lost gas); Consolidated Aluminum Corp. v. C.F. Bean
Corp., 772 F.2d 1217 (5th Cir. 1985) (holding that the owner
of a manufacturing plant could recover economic losses incurred
after the defendant negligently punctured a gas pipeline leading
to the plaintiff's plant, and the resulting loss of gas flow
caused physical damage to the plaintiff's plant machinery); Domar
Ocean Transp., Ltd. v. M/V ANDREW MARTIN, 754 F.2d 616 (5th
Cir. 1985) (allowing recovery of economic losses arising out
of the loss of use of the plaintiff's barge/tug unit after the
unit was damaged in a collision).
Reserve argues that because the
sinking of the barge physically prevented any other vessel from
using its mooring site while the barge was being salvaged, it
is entitled to recover its lost income. Merely because other
vessels were unable to moor at Reserve's facility for a period
of time, however, does not mean that Reserve has suffered physical
injury entitling it to recover purely economic losses. For example,
in Getty Refining and Marketing Co. v. MT FADI B, 766
F.2d 829 (3d Cir. 1985), the defendant's ship was forced to remain
in the plaintiff's marine terminal for several days after it
sustained a crack in its deck and hull while unloading cargo.
The plaintiff sought to recover its economic losses incurred
when other ships were unable to dock at the plaintiff's facility.
The Third Circuit denied the plaintiff recovery for its purely
economic losses because the defendant's negligence did not result
in any physical harm to the plaintiff's facility, but only interfered
with the plaintiff's contractual relations with other vessels
scheduled to use the dock. Id. at 833; see also
Consolidated Rail Corp. v. M/T HOEGH FORUM, 630 F. Supp.
83, 86 (E.D. Pa. 1985) (rejecting a claim for economic losses
incurred when the defendant's ship was ordered by a court to
remain at the plaintiff's berthing facility and thereby prevented
the use of the facility). Like the plaintiff in MT FADI B,
Reserve cannot escape the fact that Defendants' negligence did
not result in physical damage to Reserve's mooring facility,
but only interfered with Reserve's business expectancy by preventing
other vessels from mooring at the facility for a period of time.
IV. Conclusion
Under TESTBANK, physical
injury to a proprietary interest is a prerequisite to recovery
of economic damages in cases of unintentional maritime tort.
Because Reserve suffered no physical injury, its claim for purely
economic damages must be denied.(7)
The district court thus erred in failing to grant summary judgment
in favor of Defendants.
REVERSED.
1. Circuit Judge
of the Ninth Circuit, sitting by designation.
2. The permit
was originally issued to Reserve Barge Service, Inc., who later
transferred the permit to Cargo Transfer, Inc. Plaintiff installed
its buoys and anchor piles after it entered into an agreement
with Cargo Transfer for the use of the permit. Cargo Transfer
has since transferred the permit to Tri-Parish Barge, Inc. After
operating the mooring facility for a period of time, Plaintiff
leased the mooring facility to Lucy Marine Services, Inc., which
was operating the site at the time of the accident.
3. The district
court first certified its orders for interlocutory appeal on
May 5, 2000. When Defendants failed to file a timely petition
for permission to appeal, see 28 U.S.C. § 1292(b)
(ten days), the district court re-certified its orders on June
28, 2000.
4. Our order
granting Defendants leave to appeal mentioned only the district
court's April 2000 order. Because the district court certified
for immediate appeal both the April 2000 order and the
November 1999 order, under 28 U.S.C. § 1292(b), we have
discretion to permit appeal of both certified orders, which we
hereby grant. See 28 U.S.C. § 1292(b).
5. In its June
28, 2000, certification order, the district court identified
the controlling question as whether Reserve had a sufficient
proprietary interest in the mooring facility to sustain a claim
for economic damages. Our review is not limited to the particular
question identified by the district court, but may extend to
"any issue fairly included within the certified order[s]."
Yamaha Motor Corp. v. Calhoun, 516 U.S. 199, 205 (1996).
Thus, we may review the issue of whether Reserve suffered physical
damage as well as whether Reserve possessed a sufficient proprietary
interest.
6. The district
court relied on Sekco Energy, Inc. v. M/V MARGARET CHOUEST,
820 F. Supp. 1008 (E.D. La. 1993). In Sekco Energy, the
district court held that despite the fact that the plaintiff
suffered no physical damage, TESTBANK did not bar the
plaintiff's claim for purely economic damages because the plaintiff's
relationship to the alleged tort was "not remote."
Id. at 1011.
7. Because we
conclude that Reserve has not met the physical injury requirement,
we need not reach Defendants' claim that Reserve also lacks a
sufficient proprietary interest in the mooring facility to satisfy
TESTBANK.
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