## Facts

- Ballard Shipping Co. owned the M/V *World Prodigy*, which ran aground in Narragansett Bay, Rhode Island, spilling over 300,000 gallons of heating oil.
- Rhode Island closed Narragansett Bay to all shellfishing for about two weeks during and after cleanup operations.
- Beach Shellfish and other shellfish dealers (not harvesters) alleged the closure occurred during the busiest season, forcing a shutdown of their businesses and causing lost profits.
- The ship’s captain faced state charges for entering the bay without a local pilot; the captain and Ballard pleaded guilty to federal water pollution violations and paid fines.
- Ballard paid substantial amounts for federal and state cleanup costs and natural resource damages, including dedicated funds for certain individual compensation and settlement of local shellfishermen’s lost-wage claims.
- Additional claimants sued Ballard, prompting Ballard to file a federal admiralty petition for limitation or exoneration of liability.
- In the limitation proceeding, the dealers asserted (1) general maritime negligence claims for their economic losses and (2) claims under a Rhode Island oil-spill statute allowing recovery for economic loss not tied to physical damage to the claimant’s property.
- The district court dismissed the maritime claims under the maritime economic-loss rule and held the Rhode Island statutory claims preempted by federal maritime law.

## Issues

1. Whether general maritime law permits recovery for purely economic losses from an oil spill when the claimant suffers no physical damage to a proprietary interest.
2. Whether federal maritime law preempts a Rhode Island statute that provides broader remedies, including recovery for purely economic losses from oil pollution.

## Decision

- The First Circuit affirmed dismissal of the dealers’ general maritime negligence claims because the claimed losses were purely economic and unaccompanied by physical damage to the dealers’ property.
- The First Circuit reversed the district court’s ruling that the Rhode Island oil-spill statute was preempted.
- The case was remanded for further proceedings on the state-law statutory claims.

## Legal Principles

- Under *Robins Dry Dock & Repair Co. v. Flint*, general maritime tort law generally bars recovery for purely economic loss absent physical injury to a proprietary interest.
- A maritime common-law remedial limit (such as the *Robins Dry Dock* rule) does not, by itself, establish field preemption of state statutes providing supplemental remedies.
- State oil-pollution statutes providing compensation for economic losses may coexist with maritime law unless Congress has clearly foreclosed such remedies or the state law conflicts with an applicable federal statutory scheme.

## Conclusion

The court applied the maritime economic-loss rule to bar federal maritime recovery for the dealers’ lost profits, but held that federal maritime law did not preempt Rhode Island’s statutory cause of action allowing recovery for economic losses caused by an oil spill.


Ballard Shipping Co. v. Beach Shellfish, 32 F.3d 623 (1st Cir. 1994)