Case Study: Travelers Indemnity V. Dammann

Law360, New York (March 10, 2010, 6:21 PM EST) -- In Travelers Indemnity Co. v. Dammann, No. 09-1225, 2010 WL 395915, the Third Circuit Court of Appeals, making an erie guess as to New Jersey law, held that the economic loss rule precluded potential product liability claims against a seller of vanilla beans contaminated with mercury.

The economic loss rule applied despite the buyer’s claim that the tainted beans damaged “other property” in the form of other flavoring products with which the buyer mixed the beans.

The litigation began as a coverage declaratory judgment action brought...
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