Lilpan Food Corp. v. Consolidated Edison Co.
1985 N.Y. Misc. LEXIS 2661, 129 Misc. 2d 629, 493 N.Y.S.2d 740 (1985)
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Rule of Law:
A utility company does not owe a duty of care to a commercial customer to prevent losses from third-party criminal acts that occur during a city-wide blackout, as the utility's duty is limited to the direct contractual relationship for providing power to the customer's premises and does not extend to harms arising from the failure of general public services like street lighting.
Facts:
- On July 13, 1977, Consolidated Edison's (Con Ed) gross negligence caused a widespread electrical blackout in New York City.
- During the blackout, the plaintiff's supermarket, a Con Ed customer located in the South Bronx, was looted and vandalized by third parties.
- The plaintiff argued that the looting was a direct result of the general darkness and disorder in the community caused by the failure of street lights, traffic lights, and other public lighting.
- The plaintiff's supermarket sustained damages from the theft of merchandise and vandalism of fixtures.
Procedural Posture:
- The plaintiff, a supermarket owner, filed a lawsuit against Consolidated Edison in a New York City trial court.
- The plaintiff sought damages for the value of merchandise and fixtures stolen or vandalized during the 1977 blackout.
- The case proceeded to trial, where the plaintiff presented expert testimony on the societal effects of a city-wide blackout.
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Issue:
Does a utility company owe a duty of care to its commercial customer to prevent damages from looting and vandalism by third parties that occurred during a city-wide blackout caused by the utility's gross negligence?
Opinions:
Majority - Herbert Shapiro, J.
No. A utility company does not owe a duty of care to its customer to prevent damages from looting caused by a city-wide blackout where the harm stems from the general failure of public lighting rather than the direct failure of power to the customer's premises. The court reasoned that, under the precedent of Strauss v. Belle Realty Co., a duty of care requires a direct contractual relationship for the specific service whose failure caused the harm. Although the plaintiff had a contract with Con Ed for power to its market, it had no contract for the provision of street lights or other public area lighting. The court concluded the looting was not caused by the failure of electricity to the market itself (which would cause direct damages like food spoilage), but by the general blackout conditions affecting the entire community. Therefore, like the plaintiff in Strauss who could not recover for a fall in a darkened common area, this plaintiff cannot recover because its damages are too remote from the specific contractual duty owed. The court also emphasized the public policy need to place 'controllable limits on liability' to avoid the 'societal consequences of rampant liability' for utilities.
Analysis:
This decision narrowly defines a utility's duty of care by applying the 'orbit of duty' framework from Strauss v. Belle Realty Co. to commercial losses from third-party criminal acts. It establishes a critical distinction between direct damages (e.g., food spoilage), for which a utility may be liable, and indirect, consequential damages (e.g., looting enabled by public darkness), which are not recoverable by an individual customer. This precedent significantly limits the potential liability of utility companies in mass-outage events by tying the duty of care strictly to the specific service provided under a direct contract, thereby protecting them from claims arising from broader societal disorder.
