## Facts

- A negligent maritime accident on the Buffalo River caused a vessel to break loose, collide with another vessel, and crash into the Michigan Avenue Bridge.
- The bridge collapsed; wreckage and the vessels formed a dam that produced an ice jam and flooding and blocked navigation on the river.
- Navigation was disrupted for roughly two months.
- Cargill, Inc. had grain stored aboard a ship berthed below the bridge at the time of the accident.
- Cargill and Cargo Carriers, Inc. incurred expenses and business-disruption losses due to the inability to move grain and operate vessels during the river closure.
- In post-liability damages proceedings, a commissioner and the district court disallowed these claimed expenses as non-compensable.
- Cargill and Cargo Carriers appealed, seeking recovery of their economic losses from the defendants whose negligence had been established earlier.

## Issues

1. Whether negligent maritime defendants are liable for claimants’ purely economic losses caused by interruption of navigation when the claimants’ own property suffered no physical damage from the casualty.
2. Whether the scope of recoverable damages following an established finding of negligence includes downstream business-interruption expenses arising from a blocked waterway.

## Decision

- The Second Circuit affirmed the decree rejecting Cargill’s and Cargo Carriers’ claims.
- The court held that the asserted losses were purely economic and not recoverable under the governing limits on negligence damages in this setting.
- The court treated prior findings of negligence as settled and addressed only the legal recoverability of this category of damages.

## Legal Principles

- Even when negligence and causation are established for a maritime casualty, the law may deny recovery for purely economic losses that do not flow from physical injury to the claimant’s person or property.
- Courts may draw a boundary between (a) recoverable physical injury and property damage and (b) non-recoverable relational or business-interruption losses stemming from disruption of a public channel of commerce.
- Limiting recovery for economic ripple effects serves to prevent liability to an indeterminate class of affected commercial actors when the claimed harm is interruption-based rather than physically damaging to the claimant’s own property.

## Conclusion

The court refused to extend negligence liability to business-interruption expenses incurred by commercial claimants during a river closure caused by a maritime accident, affirming that purely economic losses unaccompanied by physical damage to the claimants’ property were not recoverable.


Petitions of the Kinsman Transit Co., 388 F.2d 821 (2d Cir. 1968)