## Facts

- Lowe’s operated a retail home-improvement store on approximately 5.8–6 acres in Rome, Georgia, near a General Electric facility that had used PCBs.
- Lowe’s planned to replace its existing store with a larger “superstore,” requiring use of an adjacent parcel to be acquired by a developer (Horne Properties) and leased back to Lowe’s.
- Environmental testing found PCB contamination on the targeted adjacent parcel; Lowe’s and Horne canceled that transaction and pursued a different adjoining parcel under a new agreement.
- Testing later showed PCB contamination on the second adjoining parcel and on Lowe’s existing property; Lowe’s and Horne canceled the second agreement.
- Lowe’s sued GE in federal court asserting tort claims (including trespass, nuisance, negligence, and negligence per se) and obtained a jury verdict that included $18 million in lost profits tied to the planned superstore, plus damages for reduced rental value of Lowe’s existing property and certain response costs.
- On appeal, the Eleventh Circuit certified questions to the Georgia Supreme Court regarding whether Georgia law permitted recovery of the superstore lost profits in tort.

## Issues

1. Whether Georgia’s economic loss rule permits a plaintiff to recover in tort lost profits that would have been realized only by using the plaintiff’s damaged property together with other damaged property the plaintiff did not own.

## Decision

- The Georgia Supreme Court answered the certified question “no.”
- The court held that Georgia law permits tort recovery of lost profits only when those profits are associated with damage to the plaintiff’s own property.
- Because the lost profits were tied to a superstore that would have been operated on adjacent property Lowe’s did not own (and never came to own), tort recovery of those profits was barred by the economic loss rule.
- Having resolved the lost-profits issue under the economic loss rule, the court did not address the separately certified question concerning the “new business rule.”

## Legal Principles

- Georgia’s economic loss rule limits tort recovery of economic damages to losses resulting from injury to the plaintiff’s person or damage to the plaintiff’s own property.
- A plaintiff cannot recover in tort economic losses associated with injury to, or damage to, property owned by another.
- Lost profits are recoverable in tort only when they are tied to damage to the plaintiff’s own property interests; profits dependent on use of property the plaintiff does not own are not recoverable in tort.

## Conclusion

The Georgia Supreme Court applied the economic loss rule to bar tort recovery of lost profits premised on a planned expansion onto adjacent property that the plaintiff did not own, limiting lost-profit recovery in tort to profits associated with damage to the plaintiff’s own property.


Gen. Elec. Co. v. Lowe's Home Ctrs., Inc., 279 Ga. 77 (2005)