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Case Citations (Fall 2025) Restatement, Third, Torts: Liability for Economic Harm [i] (Fall 2025)

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                            THE AMERICAN


                              LAW INSTITUTE



                                     Fall 2025 Citations



 TORTS 3D: LIABILITY FOR ECONOMIC HARM



            CHAPTER 1.   UNINTENTIONAL INFLICTION OF ECONOMIC LOSS

§ 3. Preclusion of Tort Liability Arising from Contract (Economic-Loss Rule)

C.A.9, 2024. Com. (b) quot. in sup. and quot. in case quot. in sup. Customer sued cellular telephone-
service provider for negligence, alleging that it failed to adequately protect his account information, after
hackers gained control over his phone number through a fraudulent SIM swap, received password-
reset messages for his online accounts, and stole $24 million in cryptocurrency from his digital
wallets. The district court granted summary judgment for provider. This court affirmed in part,
holding that the economic-loss rule barred customer's negligence claim, because he failed to identify a
duty independent of the parties' wireless customer agreement. The court cited Restatement Third of
Torts: Liability for Economic Harm § 3 in noting that the economic-loss rule served many purposes,
including allowing the parties to allocate risk before entering contracts, reducing confusion stemming
from lawsuits due to redundant contract and tort theories, and preventing the erosion of contract
doctrines by the use of tort law to work around them. Terpin v. AT And T Mobility LLC, 118 F.4th
1102, 1114, 1116.

C.D.Cal.2024. Com. (f) (quot. in case quot. in sup. Vehicle purchaser filed a putative class action
against vehicle manufacturer, alleging that manufacturer knew about a defect in the electric defroster of
the vehicle's rear hatch window which could cause the rear hatch window to spontaneously break or
shatter with no external impact and that manufacturer violated state consumer protection law. This court
granted in part defendant's motion to dismiss, holding that, while plaintiff failed to allege a claim under
Texas consumer protection laws, her claim would not be barred by the economic loss doctrine, because
she alleged that defendant procured her purchase of the vehicle by fraud. The court cited Restatement
Third of Torts: Liability for Economic Harm § 3, Commentf in observing that the economic loss rule
reflected the courts' preference that economic losses be allocated by contract where feasible. McIntyre
v. American Honda Motor Co., Inc., 739 F.Supp.3d 776, 800-801.

§ 4. Professional Negligence Resulting in Economic Loss



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