Nearly 100 years ago, the U.S. Supreme Court issued its decision in Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303 (1927), limiting the recovery of purely economic damages in maritime tort cases. The implications of what became known as the Robins Dry Dock rule, however, are still felt to this day. Recently, in a 75-page memorandum, Judge James K. Bredar of the U.S. District Court for the District of Maryland issued a decision dismissing and narrowing several claims for purely economic losses arising out of the Baltimore Bridge collapse incident. As highlighted by the court in In re Petition of Grace Ocean Private Ltd., Civ. No. 24-0941-JKB, “[T]he time has come to face the implications of Robins and the near century of case law that has interpreted and applied it. ”The decision highlights the strength and precedential value of the Robins Dry Dock rule.
Background and Procedural Posture
Following the tragic incident involving the M/V DALI and Baltimore’s Francis Scott Key Bridge on March 26, 2024, the owner and manager of the DALI (the Petitioners) filed a petition in limitation in the U.S. District Court for the District of Maryland invoking the Shipowners' Limitation of Liability Act and seeking to limit their liability exposure to the value of the vessel and its pending freight. (Per 46 U.S.C. §§ 30501–30. This special maritime procedure is known as a limitation proceeding, which is a legal proceeding that consolidates all related claims into a single court.) More than 50 claims were filed, including claims from federal and state governments, local government entities, and numerous other private parties seeking to recover damages for wrongful death and personal injury, property damage and cargo losses, and economic losses.
The case was originally scheduled for a bench trial on June 1, 2026. Two weeks before trial, however, petitioners moved to stay the proceedings based on newly pending criminal charges: an 18-count indictment against one of the petitioners and its employee for various crimes related to the allision (a maritime term for a moving vessel striking a stationary object). On April 8, 2026, a grand jury returned an 18-count indictment charging the owner and captain with various crimes. The Court denied the stay and ordered that the case “stay the course.” As the matter approached the trial date, several parties settled the vast majority of claims. But two categories of claims remained: those filed by the City and County of Baltimore (the local government claimants) and those filed by private economic loss (PEL) claimants.
Petitioners asserted that the Robins Dry Dock rule barred recovery as a matter of law on all remaining claims, potentially obviating the need for a trial. Specifically, petitioners moved to dismiss all pending and remaining claims from the local government claimants and PEL claimants, arguing that the remaining claimants “did not have an ownership interest in the Key Bridge and have failed to allege or identify a recognizable interest in any other property which purportedly sustained physical damage as a result of the allision.” (Using the standard of Rule 12 of the Federal Rules of Civil Procedure—motion to dismiss—or, in the alternative, to convert the motion and apply the standard of Rule 56—summary judgment.)
In response, the remaining claimants opposed petitioners’ motion and argued, among other things, that: (1) they do have a proprietary interest in the Key Bridge and/or other property which sustained physical damage from the allision, and (2) even if the Robins Dry Dock rule applied, “well-established exceptions” also apply and would permit their claims to survive. Thus, the Court had to decide whether the Robins Dry Dock rule would dismiss or narrow the remaining and surviving claims.
What is the Robins Dry Dock Rule?
The Robins Dry Dock rule takes its name from a 1927 Supreme Court decision that, as the Court noted, applied “a principle, then settled in both the United States and in England, which refused recovery for negligent interference with contractual rights.” [Citing Robins Dry Dock, 275 U.S. at 307-10; State of La. ex rel. Guste v. M/V TESTBANK, 752 F.2d 1019 (5th Cir. 1985)]. The facts of that case were unremarkable: while repairing a vessel, Robins Dry Dock negligently damaged one of its propellers, rendering the vessel unusable for two weeks longer than anticipated. The ship's owners could sue for the negligent damage. The charterer, however, who suffered no injury to himself or his property, could not recover lost profits caused by the delay.
In the century since, courts have relied on the Robins Dry Dock decision to deny the recovery of purely economic damages in maritime tort cases. Under the Robins Dry Dock rule, a plaintiff in a maritime tort suit may not recover “for economic loss if that loss resulted from physical damage to property in which [plaintiff] had no proprietary interest (i.e., no ownership or ownership-equivalent stake).” (Robins Dry Dock, 275 U.S. at 303; TESTBANK, 752 F.2d at 1022). In general terms, a party may not recover economic damages in the absence of a showing that the party sustained physical injury to its property or property in which it has a proprietary interest as a result of the maritime incident.
The purpose of the rule is “to serve as a pragmatic limitation on the doctrine of foreseeability, giving judges an easily administrable rule of decision and allowing parties to order their affairs in view of predictable outcomes.” [Plains Pipeline, L.P. v. Great Lakes Dredge & Dock Co., 620 F. App’x 281, 286 (5th Cir. 2015)]. As noted by the Court in this case, a contrary rule “would open the door to virtually limitless suits, often of a highly speculative and remote nature” and “would expose the negligent defendant to a severe penalty.” Thus, the rule has “the virtue of predictability” even if it sometimes “denies recovery for foreseeable injury caused by negligent acts.” (TESTBANK, 752 F.2d at 1028–29).
Are There Any Exceptions?
To overcome the Robins Dry Dock hurdle, parties who may have sustained economic damages from a maritime incident must show either that they also have sustained physical injury to their property or that an exception applies and allows for recovery. The Court's decision identified some exceptions that may overcome the hurdles and harsh consequences of the Robins Dry Dock rule. Also, there are more exceptions suggested by other courts throughout the U.S., although they are narrowly applied.
Proprietary interest in the physically injured property is key. A party may overcome the Robins Dry Dock hurdle if it can show a proprietary interest in the physically injured property. Importantly, and as highlighted by the Fifth Circuit, ownership is not an absolute requirement in determining proprietary interest. (See Plains Pipeline, 620 F. App’x at 285). A party may have sufficient “proprietary interest” to recover economic damages if the party is the actual owner of the physically damaged property or one who is tantamount to an owner. For example, a party who has: (a) actual possession or control, (b) responsibility for repairs, and (c) responsibility for maintenance for the physically injured property is one tantamount to an owner and may recover for economic losses. [See Tex. E. Transmission Corp. v. McMoran Offshore Expl. Co., 877 F.2d 1214, 1226 (5th Cir. 1989)]
The commercial fisherman or special situation exception. The Court noted the “commercial fisherman exception,” which is dependent upon a very special and narrow situation. Specifically, the Court noted that the Fourth Circuit has permitted commercial fishermen to recover lost profits following the loss of a ship in which they had no ownership interest, due to their “special situation” of being in “a kind of joint venture” with the owner, because their losses were “as foreseeable and direct a consequence of the tortfeasor's actions as the shipowner's.” [Yarmouth Sea Prods. Ltd. v. Scully, 131 F.3d 389, 398 (4th Cir. 1997); see also Adams v. Star Enter., 51 F.3d 417, 424–25 (4th Cir. 1995)].
The contractual loss-shifting exception. The Court also noted a potential exception when a contract has transferred the risk of economic loss from a property owner to a third party, which may allow the third party to recover despite the Robins Dry Dock rule. [Venore Transp. Co. v. M/V STRUMA, 583 F.2d 708, 711 (4th Cir. 1978)]. The Court highlighted a decision from the Fourth Circuit which permitted a time charterer to recover purely economic losses because the charter contract “transferred the risk of loss of use from the owner to the time charterer” and the time charterer had “a possessory interest in the vessel sufficient to give it standing to claim [economic] damages.” [R. Doc. 906 at 13 (citing Venore, 583 F.2d at 711)].
The intentional acts exception. The Court noted that the remaining claimants attempted to advance an “intentional acts exception” because of petitioners’ criminal misconduct. Specifically, claimants argued that the Robins Dry Dock rule does not apply “because [their] damages were caused by Petitioners’ intentional acts.” (R. Doc. 906 at 36). As noted by the Court, this is a very narrow exception that does not cover intentional conduct generally but only situations where a wrongdoer intentionally targeted a plaintiff's economic interests, such as intentional interference with contract or intentionally caused nuisance. [See, e.g., Kaiser Aluminum & Chem. Corp. v. Marshland Dredging Co., 455 F.2d 957, 958 (5th Cir. 1972); Dick Meyers Towing Serv., Inc. v. United States, 577 F.2d 1023, 1025 (5th Cir. 1978)]. The Court rejected the intentional acts exception raised by the Claimants, finding that even if Petitioners engaged in criminal misconduct, they did not intend to cause harm to any claimant’s specific economic interests. [R. Doc. 906 at 3, citing Nautilus Marine, Inc. v. Niemela, 170 F.3d 1195, 1197 (9th Cir. 1999)].
The integrated unit exception. Although not expressly discussed by the Court, the Fifth Circuit has articulated and applied an integrated unit exception to the Robins Dry Dock rule. Under this exception, a party who is not the owner or tantamount to an owner of the physically impacted property may, nonetheless, recover economic damages if the physically affected asset is attached to the party’s asset and they both operate as an integrated unit. [See Domar Ocean Transp., Ltd., Div. of Lee-Vac, Ltd. v. M/V ANDREW MARTIN, 754 F.2d 616 (5th Cir. 1985)].
Application of the Robins Dry Dock Rule to This Case
With these principles in mind, the Court turned to the remaining individual claims. The results reinforced the precedential force and implications of the Robins Dry Dock rule.
The Claims From the City of Baltimore. The City's claim only survived in one narrow aspect: It may continue to pursue damages associated with the harm to the 72-inch pre-cast concrete water main that runs beneath the Patapsco River at the location of the bridge. The City alleged that the combination of the DALI's evasive maneuvers and the collapse of the bridge physically damaged this City-owned infrastructure, and the Court could not conclude as a matter of law that this claim would fail. However, the remainder of the City's claimed damages, which were purely economic in nature, including lost tax revenue, increased road maintenance costs, and other downstream economic harms, were dismissed. The City's argument that it held a “proprietary interest” in the Key Bridge itself, because the bridge was a “functional component” of its municipal transportation network, was rejected by the Court. Likewise, damages to the City's streets and other bridges, caused by diverted heavy traffic, were also deemed too remote and attenuated.
The Claims from Baltimore County. The County's claim likewise survived only in part. It may proceed only on damages to those waterways and shorelines in which it can establish ownership. The collapse sent tons of debris into surrounding waters, and the County plausibly alleged physical damage to its shorelines, surface waters, and sediments. But the County's response costs, search-and-rescue expenses, lost tax revenue, and other economic damages were dismissed.
The Claims from the Private Economic Loss Claimants. The PEL Claimants, which were businesses ranging from shipping companies and longshoremen to sugar refiners and construction firms, saw their claims dismissed almost entirely as they could not show physical injury to their property. The sole exception: four “container claimant” parties who alleged they had cargo aboard the DALI that was physically damaged in the allision were permitted to proceed, because physical damage to one's own property is precisely the kind of injury that Robins Dry Dock rule does not bar.
Key Takeaways
1. The Robins Dry Dock rule remains a big hurdle. Nearly a century after the Supreme Court issued the decision, the rule continues to operate as a near-absolute bar to recovery of economic damages for claimants who lack a proprietary interest in the damaged property. The Baltimore Bridge decision confirms and highlights that even catastrophic, highly publicized incidents with clearly devastating economic consequences do not affect the rule's application and implications.
2. The exceptions are narrowly applied. Although certain exceptions have been recognized by courts in the U.S., these exceptions are narrow and are only applied in very specific circumstances. As exemplified by the Court, none of the exceptions raised by the remaining claimants prevented the harsh consequences of the Robins Dry Dock rule.
3. Proprietary interest in the physically injured property is key. The dividing line between claims that survived and claims that were dismissed is whether the claimant could establish a proprietary interest in property that was directly and physically damaged by the tortfeasor’s conduct. Thus, it is important to properly investigate a claim and develop the record following an incident to properly plead and show physical injury.
This article was originally published on Wilson Elser’s blog.
About the Authors:
Michael Harowski is a partner at Wilson Elser. michael.harowski@wilsonelser.com
Gabriel (Gabe) G. Silva is an associate at Wilson Elser. gabe.silva@wilsonelser.com