Wednesday, January 11, 2017
In the National Law Review, Walter Latimer has a column about a recent Eleventh Circuit products case upholding the economic loss rule:
The Economic Loss Rule is a doctrine of law that prohibits a product liability claim being brought against a manufacturer for a defective product that only destroys itself, without harm to other property or to a person. In those instances where the product fails but only damages itself and nothing else, the plaintiff’s only remedy is to sue for breach of contract against the manufacturer of the product. The plaintiff cannot seek recovery from the manufacturer under product liability causes of action. The Economic Loss Rule has historically served as the boundary between tort and contract law. Despite the fact it is part of the basic fabric that makes up tort law, it is still challenged by plaintiffs in product liability actions.
In Eiber v. Toshiba Americas Medical Systems, the plaintiff radiologist tried to sue an international electronics manufacturer for failing to maintain an MRI scanner that was out of date. The manufacturer advised the radiologist that the scanner had reached the end of its useful life, and the manufacturer would no longer provide service to it under contract. The aging scanner eventually stopped working, which the plaintiff claimed was due to negligent repairs rather than a failure of the scanner.
The Eleventh Circuit affirmed the district court's dismissal on the basis of the economic loss rule.