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Document Type

Case Note

Abstract

In its 1994 decision, Ballard Shipping Co. v. Beach Shellfish, the United States Court of Appeals for the First Circuit allowed private parties to sue under state law for purely economic losses resulting from a marine oil spill. The court held that the Rhode Island Environmental Injury Compensation Act (the Compensation Act), which permits such plaintiffs to sue, is not preempted by federal admiralty law, which would have barred suit. The long-standing rule in admiralty, encapsulated in the case Robins Dry Dock & Repair Co. v. Flint, is that purely economic losses are not compensable in the absence of damage to property or person. The Ballard Shipping Co. v. Beach Shellfish litigation resulted from a major spill of heating oil from the tanker M/V World Prodigy into Rhode Island's Narragansett Bay in June 1989. The First Circuit's decision is noteworthy in two regards. First, in it the court applied a refinement in admiralty preemption analysis that had been laid down in 1994 by the United States Supreme Court in American Dredging Co. v. Miller. Ballard Shipping's early application of the American Dredging preemption analysis gives the case visibility. Second, Ballard Shipping's greater significance is in the First Circuit's substantive holding that the Robins Dry Dock rule is not a "characteristic feature" of maritime law the "material prejudice" of which would trigger preemption. The First Circuit's holding signals the end of Robins Dry Dock as a bar to claims under state law for purely economic damages caused by a marine oil spill. Prior to Ballard Shipping, the Robins rule served as a nearly complete shield from liability for marine oil spills, until the effective date of the Oil Pollution Act of 1990. Before this time, state common law and statutory attempts to allow recovery to injured parties were generally preempted. This Note discusses the role of the Ballard Shipping decision in signaling the end of the Robins Dry Dock era, when the recovery of purely economic losses from oil pollution was foreclosed.

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