Am. Petroleum & Transp., Inc. v. City of N.Y.

• Decision Date: 10 October 2012
• Docket Number: No. 12 Civ. 3633(PAE).,12 Civ. 3633(PAE).
• Citation: 902 F.Supp.2d 466
• Parties: AMERICAN PETROLEUM AND TRANSPORT, INC., Plaintiff, v. The CITY OF NEW YORK and The Department of Transportation of the City of New York, Defendants.
• Court: U.S. District Court — Southern District of New York

902 F.Supp.2d 466

AMERICAN PETROLEUM AND TRANSPORT, INC., Plaintiff,

v.The CITY OF NEW YORK and The Department of Transportation of the City of New York, Defendants.

No. 12 Civ. 3633(PAE).

United States District Court, S.D. New York.

Oct. 10, 2012.

James Michael Maloney, James M. Maloney, Port Washington, NY, for Plaintiff.

Anshel E. David, NYC Law Department, New York, NY, for Defendants.

OPINION & ORDER

PAUL A. ENGELMAYER, District Judge.

In this admiralty case, plaintiff American Petroleum and Transport, Inc. (“American”), the owner of a barge, seeks to recover economic damages to its business resulting from the unexpected closure of a drawbridge owned and operated by defendant the City of New York (“the City”).¹ The City has moved to dismiss, on the grounds that under a line of cases arising out of Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927), economic losses caused by an unintentional maritime tort are not recoverable where the plaintiff has not suffered personal injury or physical damage to its property. For the reasons stated herein, the motion to dismiss is granted.

I. Background²

American, incorporated in New York State, was in the business of transporting petroleum products by water. Compl. ¶¶ 1, 9. On March 1, 2011, American owned a barge, the John Blanche, and was the demise charterer ³ of a tug, the Caspian Sea (together, the “tug and barge”). Id. ¶¶ 7–8. That day, the tug and barge entered into the Hutchinson River. However, a drawbridge owned and/or operated by the City—the Pelham Parkway (or Shore Road) Bridge—failed to open to vessel traffic. Id. ¶ 12. American alleges that the City had been timely notified of the need for the drawbridge to be open to permit the tug and barge to pass through. Id. The drawbridge's functionality was not restored until March 3, 2011, and the drawbridge did not open to vessel traffic until that afternoon. Id. ¶ 13. As a result of the drawbridge's closure, the tug and barge was delayed by approximately two and one-half days. Id.

As a result of the delay, American alleges it suffered $28,828 in monetary damages. These consist of $21,000 in lost work previously contracted; $4,500 in crew wages; $2,000 in rent of the tug; $500 in fuel; and $828 in insurance. Id. ¶ 14. American does not claim to have suffered any property damage or physical injury.

On May 8, 2012, American filed its Complaint in this District. It brings causes of action for common law negligence, id. ¶¶ 18–19, 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.” Id. ¶¶ 15–17.

On July 2, 2012, the City filed a motion to dismiss. Dkt. 8–10. On July 20, 2012, American filed a memorandum of law in opposition to that motion. Dkt. 12. On July 31, 2012, the City filed a reply. Dkt. 13.

II. Discussion

The City moves to dismiss on the grounds that, under a line of maritime tort law cases tracing to Robins Dry Dock, recovery is barred for economic loss in the absence of physical harm. American disputes this reading of the law, arguing that the Robins Dry Dock rule is addressed to more limited circumstances not present here.

A. Applicable Legal Standard

To survive a motion to dismiss under Rule 12(b)(6), a complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Accordingly, a district court must accept as true all well-pleaded factual allegations in the complaint, and draw[ ] all inferences in the plaintiff's favor. Allaire Corp. v. Okumus, 433 F.3d 248, 249–50 (2d Cir.2006); see also Famous Horse Inc. v. 5th Ave. Photo Inc., 624 F.3d 106, 108 (2d Cir.2010) (“We review the district court's grant of a Rule 12(b)(6) motion to dismiss de novo, accepting all factual claims in the complaint as true, and drawing all reasonable inferences in the plaintiff's favor.”). A claim will only have “facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 663, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A complaint is properly dismissed, where, as a matter of law, “the allegations in a complaint, however true, could not raise a claim of entitlement to relief.” Twombly, 550 U.S. at 558, 127 S.Ct. 1955.

B. Analysis

In Robins Dry Dock, the propeller of a vessel was negligently damaged while undergoing scheduled maintenance at a dry dock. The damage delayed, by two weeks, the vessel's return to operation. During that time, the vessel was subject to a time charter. The time charterer sued the dry dock to recover profits lost while the vessel was out of commission. Robins Dry Dock, 275 U.S. at 307–08, 48 S.Ct. 134. The Supreme Court denied recovery. It held that the charterer's loss arose only as a result of the lost benefit of the contract, and that the plaintiff, lacking a protected interest in the vessel itself, had no recovery in tort. Writing for the Court, Justice Holmes stated: “[A]s a general rule ... 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 that far.” Id. at 309, 48 S.Ct. 134 (citation omitted).

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 recoveryhere. American is quite correct that, on its facts, Robins Dry Dock itself does not address the situation presented 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.” G & G Steel, Inc. v. Sea Wolf Marine Transp., LLC, 380 Fed.Appx. 103, 104 (2d Cir.2010) (summary order); see also Gas Natural SDG S.A. v. United States, ––– Fed.Appx. ––––, ––––, No. 07–2129–CV, 2008 WL 4643944, at *1 (2d Cir. Oct. 21, 2008) (summary order) (“[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 interest.’ ” (quoting Conti Corso Schiffahrts–Gmbh & Co. KG NR. 2 v. M/V “Pinar Kaptanoglu,” 414 F.Supp.2d 443, 446–47 (S.D.N.Y.2006)) (emphasis added by Gas Natural SDG )); Brown v. Royal Caribbean Cruises, Ltd., No. 99 Civ. 11774(KMW), 2000 WL 34449703, at *5 (S.D.N.Y. Aug. 24, 2000) (in the Second Circuit, “plaintiffs who suffer no physical injury to their person or property from an alleged maritime tort may not recover for alleged economic losses, even though such losses may be deemed a foreseeable consequence of defendant's conduct”); Allders Int'l (Ships) Ltd. v. United States, No. 94 Civ. 5689(JSM), 1995 WL 251571, at *1 (S.D.N.Y. April 28, 1995) (“Most courts have read Robins Dry Dock to establish a bright line rule against recovery for economic loss caused by an unintentional maritime tort absent physical damage to property.”).

To be sure, many of the cases in which the Robins Dry Dock rule is thus articulated are factually distinguishable, in that, as in Robins Dry Dock itself, the plaintiffs were charterers who lacked a proprietary interest in the vessel in question, and it was on that basis that the rule was held to bar recovery. See, e.g., G & G Steel, 380 Fed.Appx. at 104 (affirming grant of summary judgment against plaintiff based on absence of proprietary interest); Gas Natural SDG, 2008 WL 4643944, at *3–4 (same); Fed. Commerce & Navigation Co. v. The M/V Marathonian, 392 F.Supp. 908, 909–10 (S.D.N.Y.) (granting judgment on pleadings against claim by time charterer), aff'd,528 F.2d 907 (2d Cir.1975). But see Allders Int'l, 1995 WL 251571, at *2 (dismissing plaintiff's claim based on absence of physical damage); cf. Dick Meyers Towing Serv., Inc. v. United States, 577 F.2d 1023, 1025 (5th Cir.1978) (holding that Robins Dry Dock rule precludes economic-damage claims by owners and operators, not only third parties incidentally affected by the defendant's negligence). There is also dicta in a 1968 case in which the Second Circuit indicated a desire to depart from the Robins Dry Dock rule in favor of traditional, and more flexible, tort-law notions of proximate cause and foreseeability. See Petitions of Kinsman Transit Co. (“ Kinsman II ”), 388 F.2d 821, 824–25 (2d Cir.1968). And some decisions in this Circuit since Kinsman II have criticized, or noted others' criticism of, such a bright-line rule, as to both the requirements of proprietary interest and of physical damage. See Fed. Commerce & Navigation Co., 528 F.2d at 908 (noting arguments for and against bright-line rule as to time charterers); Allders, 1995 WL 251571, at *1 (collecting post-Kinsman II cases); Fed. Commerce & Navigation Co., 392 F.Supp. at 912–13 (noting that “[w]ere this Court now free to write upon a tabula rasa and not constrained by the weight of precedent, we would reject the [contract-based Robins Dry Dock rule] in favor of a negligence-causation-foreseeability analysis” such as that articulated in Kinsman II ).

However, in light of the Second Circuit's repeated articulation of the Robins Dry Dock rule to prohibit recovery of economic losses in cases of unintentional maritime torts where there has been no allegation of physical...