State of Louisiana v. Testbank

Walter Carroll, Jr., Jean Melancon, New Orleans, La., for Fortune Sea & London S.S.

Robert B. Deane, New Orleans, La., for Partenreederei and United Kingdom.

Benjamin W. Yancey, New Orleans, La., for Fortune Sea Transp.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before CLARK, Chief Judge, WISDOM, GEE, RUBIN, REAVLEY, POLITZ, RANDALL, TATE, JOHNSON, WILLIAMS, GARWOOD, JOLLY, HIGGINBOTHAM, DAVIS and HILL, Circuit Judges.

We are asked to abandon physical damage to a proprietary interest as a prerequisite to recovery for economic loss in cases of unintentional maritime tort. We decline the invitation.1

* In the early evening of July 22, 1980, the M/V SEA DANIEL, an inbound bulk carrier, and the M/V TESTBANK, an outbound container ship, collided at approximately mile forty-one of the Mississippi River Gulf outlet. At impact, a white haze enveloped the ships until carried away by prevailing winds, and containers aboard TESTBANK were damaged and lost overboard. The white haze proved to be hydrobromic acid and the contents of the containers which went overboard proved to be approximately twelve tons of pentachlorophenol, PCP, assertedly the largest such spill in United States history. The United States Coast Guard closed the outlet to navigation until August 10, 1980 and all fishing, shrimping, and related activity was temporarily suspended in the outlet and four hundred square miles of surrounding marsh and waterways.

Forty-one lawsuits were filed and consolidated before the same judge in the Eastern District of Louisiana. These suits presented claims of shipping interests, marina and boat rental operators, wholesale and retail seafood enterprises not actually engaged in fishing, seafood restaurants, tackle and bait shops, and recreational fishermen. They proffered an assortment of liability theories, including maritime tort, private actions pursuant to various sections of the Rivers & Harbors Appropriation Act of 1899 and rights of action under Louisiana law. Jurisdiction rested on the proposition that the collision and contamination were maritime torts and within the court's maritime jurisdiction. See 28 U.S.C. Sec. 1333.

Defendants moved for summary judgment as to all claims for economic loss unaccompanied by physical damage to property. The district court granted the requested summary judgment as to all such claims except those asserted by commercial oystermen, shrimpers, crabbers and fishermen who had been making a commercial use of the embargoed waters. The district court found these commercial fishing interests deserving of a special protection akin to that enjoyed by seamen. See State of Louisiana ex rel. Guste v. M/V Testbank, 524 F.Supp. 1170, 1173-74 (E.D.La.1981).2

On appeal a panel of this court affirmed, concluding that claims for economic loss unaccompanied by physical damage to a proprietary interest were not recoverable in maritime tort. 728 F.2d 748 (5th Cir.1984). The panel, as did the district court, pointed to the doctrine of Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927), and its development in this circuit. Judge Wisdom specially concurred, agreeing that the denial of these claims was required by precedent, but urging reexamination en banc. We then took the case en banc for that purpose. After extensive additional briefs and oral argument, we are unpersuaded that we ought to drop physical damage to a proprietary interest as a prerequisite to recovery for economic loss. To the contrary, our reexamination of the history and central purpose of this pragmatic restriction on the doctrine of foreseeability heightens our commitment to it. Ultimately we conclude that without this limitation foreseeability loses much of its ability to function as a rule of law.

Plaintiffs3 first argue that the "rule" of Robins Dry Dock is that "a tort to the property of one which results in the negligent interference with contractual relationships of another does not state a claim," and that so defined, Robins Dry Dock is here inapplicable. Next and relatedly, plaintiffs urge that physical damage is not a prerequisite to recovery of economic loss where the damages suffered were foreseeable. Third, plaintiffs argue that their claims are cognizable in maritime tort because the pollution from the collision constituted a public nuisance and violated the Rivers and Harbors Appropriation Act of 1899, as well as Louisiana law.

Defendants urge the opposite: that Robins Dry Dock controls these cases; that the physical damage limitation on foreseeability ought to be retained; and that plaintiffs stated no claim for "federal pollution," either as a nuisance or under the Rivers and Harbors Act. Finally, defendants reply that state law is not applicable to this maritime collision case and in any event provides plaintiffs no claim.

The meaning of Robins Dry Dock v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927) (Holmes, J.) is the flag all litigants here seek to capture. We turn first to that case and to its historical setting.

Robins broke no new ground but instead applied a principle, then settled both in the United States and England, which refused recovery for negligent interference with "contractual rights." Stated more broadly, the prevailing rule denied a plaintiff recovery for economic loss if that loss resulted from physical damage to property in which he had no proprietary interest. See, e.g., Byrd v. English, 117 Ga. 191, 43 S.E. 419 (1903); Cattle v. Stockton Waterworks Co., 10 Q.B. 453, 457 (C.A.1875). See also James, Limitations on Liability for Economic Loss Caused by Negligence: A Pragmatic Appraisal, 25 Vand.L.Rev. 43, 44-46 (1972) (discussing history of the rule); Carpenter,Interference with Contract Relations, 41 Harv.L.Rev. 728 (1928). Professor James explains this limitation on recovery of pure economic loss: "The explanation ... is a pragmatic one: the physical consequences of negligence usually have been limited, but the indirect economic repercussions of negligence may be far wider, indeed virtually open-ended." James, supra, at 45.

Decisions such as Stockton illustrate the application of this pragmatic limitation on the doctrine of foreseeability. The defendant negligently caused its pipes to leak, thereby increasing the plaintiff's cost in performing its contract to dig a tunnel. The British court, writing fifty-two years before Robins, denied the plaintiff's claim. The court explained that if recovery were not contained, then in cases such as Rylands v. Fletcher, 1 L.R.--Ex. 265 (1866), the defendant would be liable not only to the owner of the mine and its workers "but also to ... every workman and person employed in the mine, who in consequence of its stoppage made less wages than he would otherwise have done." Id. at 457. See also Societe Anonyme de Remorquage a Helice v. Bennets, [1911] 1 K.B. 243.

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In Robins, the time charterer of a steamship sued for profits lost when the defendant dry dock negligently damaged the vessel's propeller. The propeller had to be replaced, thus extending by two weeks the time the vessel was laid up in dry dock, and it was for the loss of use of the vessel for that period that the charterer sued. The Supreme Court denied recovery to the charterer, noting:

... no authority need be cited to show that, as a general rule, at least, a tort to the person or property of one man does not make the tort-feasor liable to another merely because the injured person was under a contract with that other unknown to the doer of the wrong. (citation omitted). The law does not spread its protection so far.

275 U.S. at 309, 48 S.Ct. at 135. Justice Holmes did not stop with this delphic language, but with a citation to three cases added a further signal to his meaning:

A good statement, applicable here, will be found in Elliott Steam Tug Co., Ltd. v. The Shipping Controller, [1922] 1 K.B. 127, 139, 140; Byrd v. English, 117 Ga. 192, 43 S.E. 419; The Federal No. 2 (C.C.A. [1927] 21 F.2d 313.

Id.

The plaintiff in Elliott Steam Tug was a charterer of a tug boat who lost profits when the vessel was requisitioned by the admiralty under wartime legislative powers. In applying an indemnity statute that authorized recovery, the court noted that the charterer could not have recovered at common law: "[t]he charterer in collision cases does not recover profits, not because the loss of profits during repairs is not the direct consequence of the wrong, but because the common law rightly or wrongly does not recognize him as able to sue for such an injury to his mere contractual rights." Id. at 140. (emphasis supplied). In Byrd v. English, recovery of lost profits was denied when a utility's electrical conduits were negligently damaged by defendant, cutting off power to plaintiff's printing plant. In The Federal No. 2, the third case cited by Justice Holmes, the defendant tug negligently injured plaintiff's employee while he was working on a barge. The Second Circuit denied the employer recovery from the tug for sums paid to the employee in maintenance and cure. The court (Manton, Swan and Augustus Hand) explained:

It is too indirect to insist that this may be recovered, where there is neither the natural right nor legal relationship between the appellant and the tug, even though the alleged right of action be based upon negligence.

21 F.2d at 314.

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The principle that there could be no recovery for economic loss absent physical injury to a proprietary interest was not only well established when Robins Dry Dock was decided, but was remarkably resilient as well. Its strength is demonstrated by the circumstance that Robins Dry Dock came ten years after Judge Cardozo's shattering of privity in MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916). See also Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275 (1922). Indeed this limit on liability stood against a sea of change in the tort law. Retention of this conspicuous bright-line rule in the face of the reforms brought by the increased influence of the school of legal realism is strong testament both to the rule's utility and to the absence of a more "conceptually pure" substitute.4 The push to delete the restrictions on recovery for economic loss lost its support and by the early 1940's had failed. See W. Prosser, Law of Torts Sec. 129, at 938-940 (4th ed. 1971). In sum, it is an old sword that plaintiffs have here picked up.

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Plaintiffs would confine Robins to losses suffered for inability to perform contracts between a plaintiff and others, categorizing the tort as a species of interference with contract. When seen in the historical context described above, however, it is apparent that Robins Dry Dock represents more than a limit on recovery for interference with contractual rights. Apart from what it represented and certainly apart from what it became, its literal holding was not so restricted. If a time charterer's relationship to its negligently injured vessel is too remote, other claimants without even the connection of a contract are even more remote.

It is true that in Robins the lower courts had sustained recovery on contract principles, but the Supreme Court pushed the steamship company's contract arguments aside and directly addressed its effort to recover in tort. The Robins court, however, pushed the steamship company's contract arguments aside and directly addressed its effort to recover in tort. The language and the cases the Robins Court pointed to as "good statement[s]" of the principle make plain that the charterer failed to recover its delay claims from the dry dock because the Court believed them to be too remote. Notably, although the dry dock company did not know of the charter party when it damaged the propeller, delay losses by users of the vessel were certainly foreseeable. Thus Robins was a pragmatic limitation imposed by the Court upon the tort doctrine of foreseeability.

In a sense, every claim of economic injury rests in some measure on an interference with contract or prospective advantage. It was only in this sense that profits were lost in Byrd v. English when the electrical power to plaintiffs printing plant was cut off. The printing company's contractual right to receive power was interfered with, and in turn, its ability to print for its customers was impinged. That the printing company had a contract with the power company did not make more remote the relationship between its loss of profits and the tortious acts. To the contrary, the contract reduced this remoteness by defining an orbit of predictable injury smaller than if there were no contract between the power company and the printer. When the loss is economic rather than physical, that the loss caused a breach of contract or denied an expectancy is of no moment. If a plaintiff connected to the damaged chattels by contract cannot recover, others more remotely situated are foreclosed a fortiori. Indisputably, the Robins Dry Dock principle is not as easily contained as plaintiff would have it. We turn to our application of the principle, its application in other circuits, and the tort law of our Gulf states before returning to the doctrine itself.

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This circuit has consistently refused to allow recovery for economic loss absent physical damage to a proprietary interest. In Kaiser Aluminium & Chemical Corp. v. Marshland Dredging Co., Inc., 455 F.2d 957 (5th Cir.1972), the plaintiff lost gas supplies when the defendant negligently broke a gas pipeline. We held that because the interference with Kaiser's business was only negligently inflicted, recovery was precluded as a matter of law. In Dick Meyers Towing Service, Inc. v. United States, 577 F.2d 1023 (5th Cir.1978), we denied recovery to a tug boat operator for damages suffered when a lock on Alabama's Warrior River was closed as a result of defendant's negligence. We explained:

The law has traditionally been reluctant to recognize claims based solely on harm to the interest in contractual relations or business expectancy. The critical factor is the character of the interest harmed and not the number of parties involved.

Id. at 1025.

We denied recovery to the Louisville & Nashville Railroad for its loss suffered when the M/V BAYOU LACOMBE damaged a bridge that the railroad had a contract right to use. Louisville & Nashville R.R. Co. v. M/V BAYOU LACOMBE, 597 F.2d 469 (5th Cir.1979). We rejected the railroad's argument that its right to use the damaged bridge was a property right sufficient to support recovery, concluding that whatever its label, recovery was sought for loss of an economic expectancy. Id. at 474.

In Vicksburg Towing Co. v. Mississippi Marine Transport Co., 609 F.2d 176 (5th Cir.1980) (Politz, J.), we sustained recovery by an owner of a dock leased to another for damages to the dock caused by defendant's negligence. We asserted that the distinction between recovery by an owner when his property was damaged and recovery by others, as applied in Robins, Dick Meyers, and M/V BAYOU LACOMBE, was "meaningful, real and dispositive." Id. at 177.5

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Nor has this circuit been the sole guardian of the Robins Dry Dock principle. Rederi A/B Soya v. Evergreen Marine Corp., 1972 A.M.C. 1555, (E.D.Va.1971), aff'd, 1972 A.M.C. 538 (4th Cir.1972), was a case factually similar to Robins. There the Fourth Circuit adopted the opinion of the district court that had denied on the basis of Robins a time charterer's claim for profits lost when his leased vessel was negligently damaged. An identical result was reached in Federal Commerce & Navigation Co. v. M/V MARATHONIAN, 528 F.2d 907 (2d Cir.1975), cert. denied, 425 U.S. 975, 96 S.Ct. 2176, 48 L.Ed.2d 799 (1976).

In Henderson v. Arundel Corp., 262 F.Supp. 152 (D.Md.1966), aff'd, 384 F.2d 998 (4th Cir.1967), the court applied Robins to deny claims by seamen for wages lost when the vessel on which they worked was negligently damaged in a collision. Courts in the First and Sixth Circuits have applied Robins in similar fashion. See, e.g., Hayes v. Luckenbach S.S. Co., 92 F.Supp. 684 (D.Mass.1950), and Casado v. Schooner Pilgrim, Inc., 171 F.Supp. 78 (D.Mass.1959) (seamen denied recovery of wages lost when vessel was negligently damaged); Complaint of Great Lakes Towing Co., 395 F.Supp. 810 (N.D.Ohio 1974) (dockworkers denied recovery of wages lost when dock was negligently damaged).6

The court in General Foods Corp. v. United States, 448 F.Supp. 111 (D.Md.1978), faced a situation similar to that presented to us in M/V BAYOU LACOMBE. A ship collided with a railroad bridge over the Chesapeake and Delaware Canal, forcing General Foods to ship by truck goods moving to and from one of its plants. Relying on Robins Dry Dock, the court denied General Foods recovery for these additional costs. The court discussed Robins, the decisions applying its rule, as well as decisions which assertedly undermined the doctrine and concluded:

Imposition of liability in the present case involves precisely the limitless type of liability which courts have consistently considered excessive for negligence. Neither the case law nor the sound policy considerations on which the decisions are bottomed support plaintiff's claims for its economic losses. Even assuming General Foods is a foreseeable plaintiff, "the law does not spread its protection so far."

Id. at 116.

Plaintiffs urge that the decisions in Petition of Kinsman Transit Co., 388 F.2d 821 (2d Cir.1968) (Kinsman II ), and Union Oil Co. v. Oppen, 501 F.2d 558 (9th Cir.1974), support their arguments that the Robins Dry Dock principle should be abandoned. We disagree. The policy considerations on which both those decisions are bottomed confirm our opinion that pragmatic limitations on the doctrine of foreseeability are both desirable and necessary.

In Kinsman "an unusual concatenation of events on the Buffalo River" resulted in a disaster which disrupted river traffic for several months.7 Because of the disruption, the plaintiffs incurred extra expenses in fulfilling their contracts to supply and transport wheat and corn. In a previous panel decision arising out of the same facts, the court had rejected the defendants' arguments that recovery by such plaintiffs should be disallowed because their injuries were not foreseeable. Judge Friendly stated that while "[f]oreseeability of danger [was] necessary to render conduct negligent," it was not required that the defendants envision the precise harm resulting from their conduct before liability could be imposed. Petition of Kinsman Transit Co., 338 F.2d 708, 724 (2d Cir.1964) (Kinsman I ).

In Kinsman II the defendants argued that the plaintiffs' claims should be denied because there was no cause of action for negligent interference with a contractual right. The court dismissed the claims, but did so on the basis that the damages were too remote.8 Thus, plaintiffs argue, Kinsman supports using foreseeability to determine whether their claims are cognizable in maritime tort. We think the opinion itself answers that contention. While rejecting any bright line rule, the court recognized that foreseeability was not a panacea and that limits on that concept should be maintained.

[I]t was a foreseeable consequence of the negligence ... that the river would be dammed.... It may be that the specific manner was not foreseeable in which the damages to Cargill and Cargo Carriers would be incurred but such strict foreseeability ... has not been required.

[Yet] ... "somewhere a point will be reached when courts will agree that the link has become too tenuous ..." (citation omitted). We believe that this point has been reached with the Cargill and Cargo Carrier claims....

In the final analysis, the circumlocution whether posed in terms of "foreseeability," "duty," "proximate cause," "remoteness," etc. seems unavoidable.... [W]e return to Judge Andrews' frequently quoted statement in Palsgraf ... "It is all a question of expediency ... of fair judgment, always keeping in mind the fact that we endeavor to make a rule in each case that will be practical and in keeping with the general understanding of mankind."

Kinsman II, 388 F.2d at 824-25.

As we explain in Part IV of this opinion, we disagree with a case-by-case approach because we think the value of a rule is significant in these maritime decisions. Kinsman II's general analysis of the problem, however, recognizing as it does the need for the imposition of limitations on recovery for the foreseeable consequences of an act of negligence, is compatible with our own.9

In Union Oil, vast quantities of raw crude were released when the defendant oil company negligently caused an oil spill. The oil was carried by wind, wave, and tidal currents over large stretches of the California coast disrupting, among other things, commercial fishing operations. While conceding that ordinarily there is no recovery for economic losses unaccompanied by physical damage, the court concluded that commercial fishermen were foreseeable plaintiffs whose interests the oil company had a duty to protect when conducting drilling operations. The opinion pointed out that the fishermen's losses were foreseeable and direct consequences of the spill, that fishermen have historically enjoyed a protected position under maritime law, and suggested that economic considerations also supported permitting recovery.

Yet Union Oil's holding was carefully limited to commercial fishermen, plaintiffs whose economic losses were characterized as "of a particular and special nature." Union Oil, 501 F.2d at 570. The Union Oil panel expressly declined to "open the door to claims that may be asserted by ... other[s] ... whose economic or personal affairs were discommoded by the oil spill" and noted that the general rule denying recovery for pure economic loss had "a legitimate sphere within which to operate." Id.10

In sum, the decisions of courts in other circuits convince us that Robins Dry Dock is both a widely used and necessary limitation on recovery for economic losses. The holdings in Kinsman and Union Oil are not to the contrary. The courts in both those cases made plain that restrictions on the concept of foreseeability ought to be imposed where recovery is sought for pure economic losses.

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Jurisprudence developed in the Gulf states informs our maritime decisions. It supports the Robins rule. Courts applying the tort law of Texas, Georgia, Florida, Alabama, Mississippi and Louisiana have consistently denied recovery for economic losses negligently inflicted where there was no physical damage to a proprietary interest.

In Rodriquez v. Carson, 519 S.W.2d 214 (Tex.Civ.App.--Amarillo 1975, writ ref'd n.r.e.), the plaintiff truck driver sued for wages he lost when his employer's truck was damaged by the defendant's negligence. The court denied recovery on the ground that there was no duty to the truck driver and explained its decision in terms similar to the Robins rule:

[W]e find no breach of a duty owed to appellant by appellee with respect to the injury, i.e., the absence of a truck for appellant to drive. If there were any obligation in this respect, it would arise by reason of some relationship or agreement between the appellant and his employer. The appellant did not suffer any bodily injuries, and in the absence of any showing that he had any vested interest in the truck he did not suffer any injury to personal property.

Id. at 216. Similarly, in Morse v. Piedmont Hotel, 110 Ga.App. 509, 139 S.E.2d 133 (1964), the court denied recovery to a plaintiff jewelry salesman who alleged that because the hotel had negligently lost his employer's merchandise--goods for which he was responsible--he lost his job and could no longer obtain insurance policies necessary for employment as a jewelry salesman. The court reasoned that such indirect economic losses were not recoverable where the plaintiff had no property interest in the lost jewels and thus refused to permit recovery for negligent interference with the salesman's business interests. In Ethyl Corp. v. Balter, 386 So.2d 1220 (Fla.Dist.Ct.App.1980), cert. denied, 452 U.S. 955, 101 S.Ct. 3099, 69 L.Ed.2d 965 (1981), the court stated that it was well-settled in Florida that there was no liability in negligence for interference with economic interests such as contractual or business relationships: "There is no such thing as a cause of action for interference which is only negligently or consequentially effected." Id. at 1224. The courts of Alabama and Mississippi also refuse recovery for wrongful interference with contractual or business interests where the offensive conduct is unintentional. See, e.g., Purcell Co., Inc. v. Spriggs Enterprises, Inc., 431 So.3d 515, 533 (Ala.1983); Cranford v. Shelton, 378 So.2d 652, 655 (Miss.1980).

The Supreme Court of Louisiana recently considered abandoning the Robins rule in PPG Industries, Inc. v. Bean Dredging, Inc., 447 So.2d 1058 (La.1984), where a customer of a pipeline owner sued a dredging contractor who negligently damaged the pipeline. The customer's claim was denied. The court explained Robins as based on a policy of avoiding multiplicity of actions and unforseeable extensions of liability. Id. at 1060-61. The court then used those policy considerations to conclude that under a risk-duty analysis the "moral, social and economic values involved" did not warrant extending a duty, and hence liability, to those who might suffer indirect economic losses from an act of negligence. The court did not purport to make a rule for every case, but did suggest that it was "highly unlikely" that indirect economic losses of third parties should ever be recoverable in negligence. Id. at 1061.

Plaintiffs urge that the requirement of physical injury to a proprietary interest is arbitrary, unfair, and illogical, as it denies recovery for foreseeable injury caused by negligent acts. At its bottom the argument is that questions of remoteness ought to be left to the trier of fact. Ultimately the question becomes who ought to decide--judge or jury--and whether there will be a rule beyond the jacket of a given case. The plaintiffs contend that the "problem" need not be separately addressed, but instead should be handled by "traditional" principles of tort law. Putting the problem of which doctrine is the traditional one aside, their rhetorical questions are flawed in several respects.

Those who would delete the requirement of physical damage have no rule or principle to substitute. Their approach fails to recognize limits upon the adjudicating ability of courts. We do not mean just the ability to supply a judgment; prerequisite to this adjudicatory function are preexisting rules, whether the creature of courts or legislatures. Courts can decide cases without preexisting normative guidance but the result becomes less judicial and more the product of a managerial, legislative or negotiated function.11

Review of the foreseeable consequences of the collision of the SEA DANIEL and TESTBANK demonstrates the wave upon wave of successive economic consequences and the managerial role plaintiffs would have us assume. The vessel delayed in St. Louis may be unable to fulfill its obligation to haul from Memphis, to the injury of the shipper, to the injury of the buyers, to the injury of their customers. Plaintiffs concede, as do all who attack the requirement of physical damage, that a line would need to be drawn--somewhere on the other side, each plaintiff would say in turn, of its recovery. Plaintiffs advocate not only that the lines be drawn elsewhere but also that they be drawn on an ad hoc and discrete basis. The result would be that no determinable measure of the limit of foreseeability would precede the decision on liability. We are told that when the claim is too remote, or too tenuous, recovery will be denied. Presumably then, as among all plaintiffs suffering foreseeable economic loss, recovery will turn on a judge or jury's decision. There will be no rationale for the differing results save the "judgment" of the trier of fact. Concededly, it can "decide" all the claims presented, and with comparative if not absolute ease. The point is not that such a process cannot be administered but rather that its judgments would be much less the products of a determinable rule of law. In this important sense, the resulting decisions would be judicial products only in their draw upon judicial resources.

The bright line rule of damage to a proprietary interest, as most, has the virtue of predictability with the vice of creating results in cases at its edge that are said to be "unjust" or "unfair." Plaintiffs point to seemingly perverse results, where claims the rule allows and those it disallows are juxtaposed--such as vessels striking a dock, causing minor but recoverable damage, then lurching athwart a channel causing great but unrecoverable economic loss. The answer is that when lines are drawn sufficiently sharp in their definitional edges to be reasonable and predictable, such differing results are the inevitable result--indeed, decisions are the desired product. But there is more. The line drawing sought by plaintiffs is no less arbitrary because the line drawing appears only in the outcome--as one claimant is found too remote and another is allowed to recover. The true difference is that plaintiffs' approach would mask the results. The present rule would be more candid, and in addition, by making results more predictable, serves a normative function. It operates as a rule of law and allows a court to adjudicate rather than manage.12

That the rule is identifiable and will predict outcomes in advance of the ultimate decision about recovery enables it to play additional roles. Here we agree with plaintiffs that economic analysis, even at the rudimentary level of jurists, is helpful both in the identification of such roles and the essaying of how the roles play. Thus it is suggested that placing all the consequence of its error on the maritime industry will enhance its incentive for safety. While correct, as far as such analysis goes, such in terrorem benefits have an optimal level. Presumably, when the cost of an unsafe condition exceeds its utility there is an incentive to change. As the costs of an accident become increasing multiples of its utility, however, there is a point at which greater accident costs lose meaning, and the incentive curve flattens. When the accident costs are added in large but unknowable amounts the value of the exercise is diminished.