## Facts

- Lockheed Martin contracted with Rantec Power Systems, Inc. to design, construct, and install an anechoic (radio-frequency-absorbing) chamber, including integrated fire-detection and sprinkler systems.
- The sprinkler system was intended to discharge only upon reaching a specified temperature, not upon smoke detection alone.
- On two occasions, the sprinklers discharged when they should not have, causing substantial water damage to the chamber’s internal components, including radio-frequency-absorbing foam and subflooring.
- Lockheed later asserted additional damage to a pedestal/positioning system valued over $160,000, but that item was not pleaded in the complaint or an amendment.
- More than four years after installation, Lockheed sued asserting negligence, strict products liability, and breach of implied warranties, seeking costs to repair or replace damaged chamber components.

## Issues

1. Whether tort claims (negligence and strict liability) could proceed when the alleged harm was limited to damage to the chamber and its integrated components, or whether the economic-loss doctrine barred recovery.
2. Whether implied-warranty claims were untimely under the UCC four-year limitations period running from tender of delivery, absent an explicit future-performance warranty.
3. Whether the appellate court should reach a cross-appeal challenging summary judgment for third-party defendants after affirming judgment against the original plaintiff.

## Decision

- The First Circuit affirmed summary judgment for Rantec on all claims.
- The court held the economic-loss doctrine barred Lockheed’s negligence and strict-liability claims because the alleged losses were purely economic and involved damage to the product itself, not personal injury or damage to other property.
- The court held the implied-warranty claims were time-barred because the cause of action accrued at tender of delivery and the suit was filed after the four-year UCC period expired; no explicit future-performance warranty delayed accrual.
- Because Rantec indicated it would withdraw its cross-appeal if the judgment against Lockheed was affirmed, the court did not address the third-party summary judgment on the merits.

## Legal Principles

- Under the economic-loss doctrine, tort recovery is generally unavailable for purely economic loss consisting of damage to the product itself, absent personal injury or damage to property other than the product.
- For “other property” analysis, an integrated system may be treated as a single product; damage to component parts within the integrated whole is treated as damage to the product itself.
- A defect’s potential to cause injury or damage does not, by itself, avoid the economic-loss bar; the focus is on the damage actually sustained.
- Under UCC § 2-725, breach-of-warranty claims accrue at tender of delivery, regardless of when the defect is discovered, unless there is an explicit warranty extending to future performance.

## Conclusion

The First Circuit held that a sophisticated buyer’s claims for repair and replacement costs arising from damage within an integrated commercial product are confined to contract and warranty remedies, not tort, and that implied-warranty claims are barred when filed more than four years after tender of delivery absent an explicit future-performance warranty.


Lockheed Martin Corp. v. RFI Supply, Inc., 440 F.3d 549 (1st Cir. 2006)