Friday, June 17, 2011

Set a course for the Eleventh Circuit!

Judge Seitz entered a $16.7 million judgment predicated on fraud in the inducement and negligent misrepresentation for Carnival Cruise Lines, represented by Greenberg Traurig and Fowler Rodriguez, against Rolls-Royce PLC. The suit is over a new high-tech steering and propulsion system appurtenant to the Queen Mary II.queen_mary_2.jpg The jury had also awarded $8 million for breach of an implied warranty of workmanlike performance, but Judge Seitz granted the motion by Rolls-Royce, represented by Black Srebnick et al., for judgment on that claim. The jury rejected Carnival’s claims for breach of both ordinary and specific warranties and for unfair trade practices.

Newspaper articles almost never give either the complete story or a case number, but I found it after abusing D.O.M.’s PACER account just a little bit. The verdict form is 10 pages long and reads a lot like an IRS 1040. As far as I can tell from that document and Judge Seitz’s order, the jury thought Rolls-Royce materially lied about the new technology. I know, I know. How is that not barred by the economic loss rule? According to the order, “Rolls-Royce ignores the fact that the parties did not actually have a contract.” Rather, Carnival bought the ship from a shipbuilder who bought the system from Rolls-Royce. I may be entirely out-of-date on this since it’s been a very long time since I did this kind of thing, but I think there’s a good argument that the economic loss rule applies regardless of whether a contract action lies against any particular defendant. That will be the Eleventh’s problem, I guess. Issues like this almost make me miss commercial litigation. Reviewing the 424-entries-long docket doesn’t.


Bob Becerra said...

There is a lot of interesting Florida case law on the tension between the Economic Loss Rule and independent intentional torts, which after review still leaves you with little certainty as to what factual scenarios can get you out of the purview of the rule. All I can say is good luck in the Eleventh.

Anonymous said...

if that is what the court said, it could not be more wrong. how can you normally have fraudulent inducement without privity? if that privity is through an intermediary like a distributor then you have the economic loss rule. either way the ECL would apply unless you have damage to other property, which I do not know existed here. If it did not, SOL. Pretty easy stuff if you ask me.