Florida Supreme Court Reforms (and Limits) Economic Loss Rule

Receding from years of its prior case law in which it expanded the use of the economic loss rule (ELR) to bar tort claims that are not independent of a claim for breach of contract, the Florida Supreme Court today issued an opinion strictly limiting the ELR to product liability cases.

Those familiar with the doctrine will recall that it has its origins in products liability cases, and today is routinely deployed as an affirmative defense to any tort claim brought where the parties are also in contractual privity. No more.

In Tiara Condominium Association, Inc. v. Marsh & McLennan Cos., No. SC10-1022 (Fla. March 7, 2013), the Florida Supreme Court found that there had been “over-expansion of the rule,” and concluded that this expansion beyond the doctrine’s origins in products liability “was unwise and unworkable in practice.” The dissent notes that the majority opinion “greatly expands the use of tort law at a cost to Florida’s contract law.”

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Tags: Breach of Contract, Economic Loss Rule, Tort

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