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Alloway v. General Marine Industries6/30/1997
ning to tort actions for property damage, N.J.S.A. 2A:14-1. We held that Spring Motors had a cause of action against both Ford and Clark for breach of warranty and that the U.C.C.'s four-year period of limitations determined the time for the commencement of the action.
When the harm suffered is to the product itself, unaccompanied by personal injury or property damage, we concluded that principles of contract, rather than of tort law, were better suited to resolve the purchaser's claim. Id. at 580. Consequently, we held that the U.C.C. provided the appropriate period of limitations. Id. at 561. Because the action was between commercial parties, we did not address the issue raised by Santor, whether a consumer could maintain an action for both breach of warranty and strict liability. See id. at 575.
One year after we decided Spring Motors, the United States Supreme Court reviewed the roles of tort and contract law in a case involving economic loss caused by the defective design and manufacture of turbines in supertankers. See East River, (supra) , 476 U.S. 858, 106 S. Ct. 2295, 90 L. Ed. 2d 865. In a unanimous opinion, the Court began, "in this admiralty case, we must decide whether a cause of action in tort is stated when a defective product purchased in a commercial transaction malfunctions, injuring only the product itself and causing purely economic loss." Id. at 859, 106 S. Ct. at 2296, 90 L. Ed. 2d 865. The Court continued, "charting a course between products liability and contract law, we must determine whether injury to a product itself is the kind of harm that should be protected by products liability or left entirely to the law of contracts." Ibid.
After analyzing relevant state court decisions, including Santor, Seely, and Spring Motors, the Court concluded "that a manufacturer in a commercial transaction has no duty under negligence or strict products-liability theory to prevent a product from injuring itself." Id. at 871, 106 S. Ct. at 2302, 90 L. Ed. 2d 865. In an action for economic loss, the reasons for imposing a tort duty are weak while "those for leaving the party to its contractual remedies are strong." Ibid. For example, injury to a product itself neither implicates the safety concerns of tort law, ibid., nor justifies "the increased cost to the public that would result from holding the manufacturer liable in tort." Id. at 872, 106 S. Ct. at 2302, 90 L. Ed. 2d 865. Allowing recovery for all foreseeable damages in claims seeking purely economic loss, could subject a manufacturer to liability for vast sums arising from the expectations of parties downstream in the chain of distribution. Id. at 874, 106 S. Ct. at 2304, 90 L. Ed. 2d 865.
Subsequently, state and federal courts, when exercising admiralty jurisdiction, have recognized that East River 's bar of strict-liability claims extends to actions brought by consumers. See, e.g., Karshan v. Mattituck Inlet Marina & Shipyard, 785 F. Supp. 363, 365-66 (E.D.N.Y. 1992) (finding purchaser of pleasure boat barred from recovering economic loss in tort because East River was not limited to commercial buyers); Stanton v. Bayliner Marine Corp., 123 Wash. 2d 64, 866 P. 2d 15, 23-24 (Wash. 1993) (holding that matter involving consumer purchaser of allegedly defective pleasure boat was governed by maritime-product-liability rule, which denies recovery for economic loss, because weight of authority interpreting maritime rule has not made distinction between commercial and consumer transactions), cert. denied, 513 U.S. 819, 115 S. Ct. 78, 130 L. Ed. 2d 32 (1994); see also Lewinter, (supra) , 32 Cal. Rptr. 2d at 308-310 (affirming grant of summary judgment because admiralty jurisdiction applied to consumer purchaser
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