## Facts

- A shipbuilder constructed the fishing vessel M/V Saratoga and installed a hydraulic system designed by a separate designer.
- The shipbuilder sold the vessel as built to the first purchaser, who later added fishing equipment, including a skiff, a seine net, and spare parts.
- The first purchaser later sold the vessel, with the added equipment onboard, to a subsequent purchaser that continued commercial fishing operations.
- An engine-room fire and flooding caused the vessel to sink; a defect in the hydraulic system was assumed to be a significant cause.
- The subsequent purchaser sued the shipbuilder and the hydraulic-system designer in admiralty tort, seeking damages for the vessel and for the loss of the added fishing equipment.
- The trial court awarded damages, including for the added equipment, but the court of appeals held the added equipment was part of the “product itself,” barring tort recovery under the maritime economic-loss rule.

## Issues

1. Under maritime products-liability doctrine, does the economic-loss rule bar a subsequent purchaser’s tort recovery for the physical loss of equipment added to a vessel after the manufacturer’s initial sale?
2. For purposes of distinguishing the “product itself” from “other property,” is later-added equipment treated as part of the defective product merely because it was included in a resale of the vessel?

## Decision

- The Supreme Court reversed the court of appeals.
- Equipment added to a product after the manufacturer sells it to the initial user is “other property,” not part of the “product itself,” in a tort suit against the manufacturer and designer.
- The subsequent purchaser could recover in tort for the loss of the later-added skiff, seine net, and spare parts destroyed in the casualty.

## Legal Principles

- In admiralty, a plaintiff may not recover in tort for physical damage a defective product causes to the “product itself,” but may recover for physical damage to “other property.”
- The relevant “product itself” is defined as the product as built and outfitted by the manufacturer at the time of sale to the initial user.
- Property added after the manufacturer’s sale (even if later sold together with the product) remains “other property” for purposes of the economic-loss rule.
- A rule that narrows manufacturer tort exposure based solely on resale is inconsistent with the economic-loss framework and reduces tort-law incentives to prevent unsafe design.

## Conclusion

The Court held that, in maritime products liability, later-added equipment is “other property” rather than part of the “product itself,” permitting a subsequent purchaser to recover tort damages for its physical loss even though the defective vessel itself is subject to East River’s economic-loss limitation.


Saratoga Fishing Co. v. J.M. Martinac & Co., 520 U.S. 875 (1997)