Exner v. Sherman Power Construction Company
54 F.2d 510 (1931)
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Rule of Law:
A party who stores large quantities of a dangerous explosive, such as dynamite, in a populated area engages in an ultrahazardous activity and is held strictly liable for any damages resulting from an explosion, regardless of negligence.
Facts:
- Sherman Power Construction Co. was engaged in work on a hydroelectric development in Bellows Falls, Vermont.
- In connection with its work, the company stored large quantities of dynamite, sometimes up to 1,000 pounds, in a small hut on a riverbank.
- The dynamite hut was located approximately 935 feet from a dwelling owned by Delia and Frederick Exner, where they lived and operated a restaurant and rental business.
- The hut was also situated close to a thickly settled part of the town, within fifty rods (825 feet) of several other homes, a hotel, and factories.
- On February 18, 1928, the dynamite in the hut exploded.
- The explosion killed three men, destroyed the hut, and caused significant personal injury to Delia Exner, extensive damage to the Exners' house, and harm to their business.
Procedural Posture:
- Delia H. Exner and Frederick Exner filed a tort action against Sherman Power Construction Co. in federal trial court.
- The plaintiffs' complaint alleged liability on four counts, including negligence and violation of a Vermont statute prohibiting the storage of more than 50 pounds of dynamite within 50 rods of an inhabited building.
- The trial court submitted the case to the jury solely on the statutory violation theory, instructing that a violation resulted in absolute liability.
- The jury returned a verdict for the plaintiffs, and a judgment was entered against the defendant.
- Sherman Power Construction Co. (appellant) appealed the judgment to the U.S. Circuit Court of Appeals for the Second Circuit; the Exners were the appellees.
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Issue:
Does a party who stores large quantities of dynamite in a location that creates a likelihood of risk to others become strictly liable for damages caused by an explosion, even in the absence of negligence?
Opinions:
Majority - Augustus N. Hand
Yes. A party who stores a dangerous substance like dynamite does so at their peril and is absolutely liable for any harm that results. The court reasoned that storing large quantities of explosives is an ultrahazardous activity. It rejected the historical distinction between liability for direct trespass (e.g., flying debris) and for consequential damages (e.g., concussion), finding the distinction to be without logical basis. The court held that the party who introduces such a grave peril into a community for its own profit, rather than an innocent victim, should bear the risk of loss. While the trial court improperly based liability on a Vermont statute that did not apply to the Exners (as they were outside the statute's protected zone), the defendant is liable under the common law principle of strict liability, making the trial court's error harmless.
Concurring - Swan
Yes. While concurring in the judgment to affirm, the author stated that he would have been willing to rest the affirmance on the Vermont statute, disagreeing with the majority's conclusion that the statute did not provide the plaintiffs a remedy.
Analysis:
This decision is a foundational case in modern tort law for affirming the doctrine of strict liability for ultrahazardous activities. By extending the principles from blasting cases to the storage of explosives, the court broadened the scope of activities for which a defendant is liable without proof of fault. Its explicit rejection of the distinction between damage from physical trespass (debris) and concussion was highly influential, treating both as direct consequences of the dangerous activity. The case establishes a clear precedent that those who profit from inherently dangerous enterprises must internalize the costs of potential accidents, rather than imposing them on innocent members of the public.
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