Chmm

The economic loss doctrine precludes recovery against a manufacturer for physical damage that the manufacturer’s defective product causes to the “product itself.” E. River S.S. Corp. v. Transamerica Delaval Inc., 476 U.S. 858, 866-71 , 106 S.Ct. 2295 , 90 L.Ed.2d 865 (1986). But the manufacturer can be sued for physical damage the product causes to “other property.” Id. at 867-68 , 106 S.Ct. 2295 . We consider whether a vessel owner may sue for the physical damage a defective vessel component causes to property that the owner adds to the vessel before the vessel is delivered. Put another way, is property added by the owner to a vessel prior to the delivery of the vessel considered “other property”?.

I. Background

CHMM, LLC is the owner of M/Y JAMAICA BAY, a 59.5-meter luxury yacht. In 2006, CHMM contracted with Nobis-krug GmbH to “construct, equip, launch and complete [the yacht] at [Nobiskrug’s] shipyard and to sell and deliver [the yacht] to [CHMM]” for approximately €34.2 million. Nobiskrug subcontracted with Freeman Marine Equipment for the manufacture of a “weathertight” door for installation in the yacht. This door provided access from the foredeck to the interior…