UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

CHMM, LLC, No. 13-35163 Plaintiff-Appellant, D.C. No. v. 3:12-cv-01484-ST

FREEMAN MARINE EQUIPMENT, INC., OPINION Defendant-Appellee.

Appeal from the United States District Court for the District of Oregon Anna J. Brown, District Judge, Presiding

Argued and Submitted October 8, 2014—Portland, Oregon

Filed June 29, 2015

Before: Alex Kozinski, Raymond C. Fisher and Andre M. Davis,* Circuit Judges.

Opinion by Judge Kozinski

* The Honorable Andre M. Davis, Senior Circuit Judge for the U.S. Court of Appeals for the Fourth Circuit, sitting by designation. 2 CHMM V. FREEMAN MARINE EQUIP.

SUMMARY**

Admiralty Law

Reversing the district court’s judgment in an admiralty case, the panel held that a vessel owner could sue for the physical damage a defective vessel component caused to property that the owner added to the vessel before the vessel was delivered.

The panel held that the vessel owner’s tort claims were not barred by the economic loss doctrine, which precludes recovery against a manufacturer for physical damage that the manufacturer’s defective product causes to the “product itself,” but allows recovery for physical damage the product causes to “other property.”

COUNSEL Brian P.R. Eisenhower, Anthony J. Pruzinsky (argued), Hill Rivkins LLP, New York, New York; David R. Boyajian, Colin J. Folawn, Daniel F. Knox, Schwabe, Williamson & Wyatt, Portland, Oregon, for Plaintiff-Appellant. Jay W. Beattie (argued), James P. McCurdy, Lindsay, Hart, Neil & Weigler, Portland, Oregon; David W. Lannetti, Edward J. Powers, Vandeventer Black LLP, Norfolk, Virginia, for Defendant-Appellee.

** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. CHMM V. FREEMAN MARINE EQUIP. 3

OPINION KOZINSKI, Circuit Judge:

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 (1986). But the manufacturer can be sued for physical damage the product causes to “other property.” Id. at 867–68. 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 Nobiskrug 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 of the yacht.

The shipbuilding contract between Nobiskrug and CHMM states that “the Interior Outfit of the Yacht is to be provided by [CHMM]” and that “delivery and installation of the Interior Outfit has to be executed within the time frame laid down in [Nobiskrug’s] Construction Schedule.” CHMM 4 CHMM V. FREEMAN MARINE EQUIP. contracted with third parties for the purchase and installation of the items in the yacht’s interior. The yacht that Nobiskrug ultimately deli