Economic Loss Doctrine

The highest court in Maryland has ruled that the economic loss doctrine did not bar a lawsuit against General Motors alleging that their front seats were unsafe because they collapsed rearward in rear-impact collisions.  The claimants sought recovery of the cost of repairing the seats.

A quick summary of the 69-page opinion:  "Maryland has joined those jurisdictions that recognize an exception to the rule which bars economic loss in tort. As we have seen, the reasoning behind the exception is that the likelihood is so great that severe bodily harm or death will result from the product defect, that we substitute actual present injury or product malfunction with the cost to repair the problem. Assuming that plaintiffs can adequately prove the substantive elements of their claims and objectively quantify the measure of their damages, Maryland has determined that the exception to the economic loss rule advances the practical goal of providing a remedy before the significant loss of life o r limb. To b e sure, in light of the general distaste for aw arding eco nomic losses in tort, if a petitioner has presented enough facts to qualify for the exception to the rule, then he or she has surmounted the grea test hurdle for pleading injury and this court cannot fathom why such economic losses would not qualify as a sufficient injury, or in the case of the Consumer Protection Act, loss for the purpose of pleading those claims."

The case is Lloyd v. General Motors Corp., No. 10 (Md. Ct .App.Feb. 8, 2007).  Read it here.

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