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Principle:In New York, when there is no physical or property damage, then noliability. --Must draw line somewhere—don’t want “limitless ripple effect liability”--Crushing Liability concern--Rabin: Not proper place for tort law. Can’t always get recourse in tort law. Maybe here we should have government subsidized business stoppage insurance, or a federal disaster zone, or subsidized loans or relief. But not necessarily torts. --Don’t use tort blinders.Raises questions for all areas of governmentDunlop Tire v. FMC Corp/Beck v. FMC. (p. 320)Facts: Explosion at FMC explosion directly damaged dunlop, and also caused electrical outage miles away at Chevy dealer where Beck worked. Principle:Dunlop recovers for all economic loss because it suffered physical contact—And once that’s established, all else is recovered for, including damages from power outage. But BeckΠgets nothing because there was no physical harm.Contrast With:People Express Airlines v. Consolidated Rail Corp.--In New Jersey, when a chemical plant spilled across from terminal and fears of explosion shut down airport, People’s Express was able to recover even though it wasn’t damaged. Theory: more particular the foreseeability that economic loss would be suffered as a result of negligence, the more just that liability be imposed.--NY far extreme from NJ.--This means no recovery for thousands of NY businesses on 911.Duncan v. Afton(p. 315, Note 8)--∆was hired to do drug tests and negligently reports to employer that Πtested positive. Court imposes duty of due care because ∆knew that its actions would affect the group of workers being tested.--Policy: no concern about limitless liability here; # of individuals limited--Other courts go other ways--From incentives, fairness, and compensation perspectives, its the right outcomeRickards v. Sun Oil(p. 323) Barges knocks out bridge and access to Π’s business, but recovery barred because liability disproportionate to negligence committed. Economists on Econ. Recovery:No net loss to society—people go to another motel or business—so therefore no reason for recovery21
--But forgets sense of fairnessRobins Dry Docks & Repair Co. v. Flint(p. 322)Facts:Boat was not repaired well. Owner chartered it to someone, who sued repair man. Justice Holmes:No duty owed to charteree, because no contractual relationship. Chareteree should so the owner to recover, who in turn can implead the repairman.Sum up on Economic and Emotional Distress Cases:--Disproportionality problem. Whatever the harms, they very from Πto Π; they’re hard to calculate, and the level of negligence involved may not be proportional to what catastrophic results were caused--think about the ripple effects of incidental harms that might be caused by negligent driving.--In 522 Madisonthere was a ripple effect issue: all hot dog vendors, etc.