18 Class 18 18 Class 18

Emotional and Economic Harms

          Negligence law singles out some types of injury, particularly those involving emotional and economic harm, the subject of this section. We have already studied intentionally inflicted emotional injuries, but the law also recognizes negligent infliction of emotional distress (NIED). Courts have at times limited this tort, as we shall see, by requiring that the plaintiff suffer physical consequences from emotional distress, by requiring that the plaintiff be in the so-called zone of danger, or by requiring bystanders to be in a tightly knit relationship with an injured party. Does it make sense for courts to be especially concerned about fraudulent or frivolous claims in this setting? Generally, the rules of NIED vindicate claims when courts expect emotional distress to be especially acute and foreseeable. Does tort law have this right? When and how can we predict that something will cause emotional injury?

          Courts have often limited recovery for purely economic loss. Here, too, the theory is that economic injuries may be too hard to trace to the defendant’s conduct—or too difficult for defendants to foresee.

          As you read the following cases, consider whether the special treatment of economic and emotional harms is justified and what it says about the hierarchy of injury implicit in tort law.

18.1 Negligent Infliction of Emotional Distress 18.1 Negligent Infliction of Emotional Distress

          Assault covers fear of imminent harm, but negligent infliction of emotional distress may apply to plaintiffs who experience crippling fear of other kinds. Some of these cases are near misses, involving plaintiffs who were nearly harmed themselves. Other cases involve likely or even inevitable future injury. Under what circumstances should these harms should be recognized? Consider this question as you read the next two cases.

18.1.1 Falzone v. Busch 18.1.1 Falzone v. Busch

45 N.J. 559
214 A.2d 12

Charles FALZONE and Mabel Falzone, Plaintiffs-Appellants,

v.

Leonard R. BUSCH, Defendant-Respondent.

No. A--8.
Supreme Court of New Jersey.
Argued Sept. 14, 1965.
Decided Oct. 25, 1965.

[45 N.J. 561] Herbert C. Kaplan, Carteret, for plaintiffs-appellants (Kaplan, Feingold & Kaplan, Carteret, Attorneys; Herbert C. Kaplan, Carteret, on the brief).

John A. Lynch, Jr., New Brunswick, for defendant-respondent (Lynch, Murphy, Mannion & Lynch, New Brunswick, Attorneys; John A. Lynch, Jr., New Brunswick, on the brief).

[214 A.2d 13] The opinion of the court was delivered by

PROCTOR, J.

The question before us on this appeal is whether the plaintiff may recover for bodily injury or sickness resulting from fear for her safety caused by a negligent defendant, where the plaintiff was placed in danger by such negligence, although there was no physical impact.

The complaint alleges in the first count that the plaintiff, Charles Falzone, was standing in a field adjacent to the roadway when he was struck and injured by defendant's negligently driven automobile. The second count alleges that the plaintiff, Mabel Falzone, wife of Charles, was seated in his lawfully parked automobile close to the place where her husband was struck and that the defendant's negligently driven automobile 'veered across the highway and headed in the direction of this plaintiff,' coming 'so close to plaintiff as to put her in fear for her safety.' As a direct result she became ill and required medical attention. There is no allegation that her fear arose from apprehension of harm to her husband. In the third count plaintiff, Charles Falzone, seeks damages Per quod.

The Law Division granted the defendant's motion for summary judgment on the second and third counts, holding that it was constrained to follow the existing New Jersey rule that where there is no physical impact upon the plaintiff, there can be no recovery for the bodily injury or sickness resulting from negligently induced fright. We certified the plaintiffs' appeal before it was considered by the Appellate Division.

[45 N.J. 562] Neither this Court nor the former Court of Errors and Appeals has considered a case directly presenting this question. However, since a decision of our former Supreme Court in 1900, Ward v. West Jersey & Seashore R.R. Co., 65 N.J.L. 383, 47 A. 561, it has been considered settled that a physical impact upon the plaintiff is necessary to sustain a negligence action. See e.g., Greenburg v. Stanley, 51 N.J.Super. 90, 106, 143 A.2d 588 (App.Div.1958), modified on other grounds 30 N.J. 485, 153 A.2d 833 (1959).

In Ward, the complaint alleged that the plaintiff, while driving on a highway, was permitted without warning from the defendant railroad to drive upon a public crossing of its tracks in the face of an approaching train; that the defendant, by improperly lowering the gates before the plaintiff was off the tracks, subjected him to 'great danger of being run down and killed by said train' and caused him to be 'shocked, paralyzed, and otherwise injured.' 65 N.J.L. at p. 383, 47 A. at p. 561. On the defendant's demurrer, the court stated the issue: '(W)hether, in an action for negligence, the mere apprehension of personal injuries, which are not in fact received, will support an action, when physical suffering follows as a consequence of the mental disturbance.' id., at p. 384, 47 A. at p. 561. The court recognized a division of authority in other jurisdictions but chose to follow those decisions which denied liability in the absence of impact.[1] Three reasons for denying recovery were set forth in the opinion. The first was that physical injury was not the natural and proximate result of the negligent act:

'The doctrine of non-liability affirmed in the several opinions already referred to, rests upon the principle that a person is legally responsible only for the Natural and proximate results of his negligent [45 N.J. 563] act. Physical suffering is not the probable or natural consequences of fright, in the case of a person of ordinary physical and mental vigor; and in the general conduct of business, and [214 A.2d 14] the ordinary affairs of life, although we are bound to anticipate and guard against consequences, which may be injurious to persons who are liable to be effected (sic) thereby, we have a right, in doing so, to assume, in the absence of knowledge to the contrary, that such persons are of average strength both of body and of mind.' id., at 385, 47 A. at 562.

Second, the court concluded that since this was the first action of its kind in New Jersey, the consensus of the bar must have been that no liability exists in the absence of impact. id., at pp. 385--386, 47 A. at 561. The third reason was 'public policy' which the court explained by quoting with approval from Mitchell v. Rochester Ry. Co., 151 N.Y. 107, 45 N.E. 354 (Ct.App.1896):

'If the right of recovery in this class of cases should be once established, it would naturally result in a flood of litigations in cases where the injury complained of may be easily feigned without detection, and where the damages must rest upon mere conjecture and speculation. The difficulty which often exists in cases of alleged physical injuries, in determining whether they exist, and, if so, whether they were caused by the negligent act of the defendant, would not only be greatly increased, but a wide field would be opened for unrighteous[2] or speculative claims.' Ward, supra, 65 N.J.L. at p. 386, 47 A. at 562.

We think that the reasons assigned in Ward for denying liability are no longer tenable, and it is questionable if they ever were. The court there first stated that it is not 'probable or natural' for persons of normal health to suffer physical injuries, when subjected to fright, and that since a person whose acts cause fright alone could not reasonably anticipate that physical harm would follow, such acts cannot constitute negligence as to the frightened party. It appears that the court decided as a matter of law an issue which we believe is properly determinable by medical evidence. An Irish court as early as 1890 recognized the possibility of a casual connection [45 N.J. 564] between fright and physical injury in a normal person, Baron Palles expressing his view in these words:

'* * * I am of opinion that, as the relation between fright and injury to the nerve and brain structures of the body is a matter which depends entirely upon scientific and medical testimony, it is impossible for any Court to lay down, as a matter of law, that if negligence cause fright, and such fright, in its turn, so affects such structures as to cause injury to health, such injury cannot be 'a consequence which, in the ordinary course of things would flow from the' negligence, unless such injury 'accompany such negligence in point of time. " Bell v. Great Northern Railway Co., L.R. 26 Ir. 428, 442.

And even in Spade v. Lynn & B.R. Co., 168 Mass. 285, 288, 47 N.E. 88, 89 (Sup.Jud.Ct.1897) (relied upon in Ward), where recovery was denied for the physical consequences of fright, the court recognized that:

'Great emotion, may, and sometimes does, produce physical effects * * * A physical injury may be directly traceable to fright, and so may be caused by it. We cannot say, therefore, that such consequences may not flow proximately from unintentional negligence; * * *'

Moreover, medical knowledge on the relationship between emotional disturbance and physical injury has steadily expanded, and such relationship seems no longer open to serious challenge. See e.g., Smith, 'Relation of Emotions to Injury and Disease: Legal Liability for Psychic Stimuli,' 30 Va.L.Rev. 193 (1944); Smith and Solomon, 'Traumatic Neuroses in Court,' 30 Va.L.Rev. [214 A.2d 15] 87 (1943); Goodrich, 'Emotional Disturbance as Legal Damage,' 20 Mich.L.Rev. 497 (1922).

New Jersey courts have not generally adhered to the notion that fright cannot be the proximate cause of substantial physical injury, and three rules of law inconsistent with the Ward doctrine have developed. It has been held that where a person is injured attempting to avoid a hazard negligently created by another, he may recover for the physical consequences of fright even though the immediate injury suffered was slight and was not a link in the causal chain. Thus, in Buchanan v. West Jersey R.R. Co., 52 N.J.L. 265, 19 A. 254 (Sup. [45 N.J. 565] Ct.1890), cited with approval in Ward, a woman standing in a railroad station threw herself to the platform to avoid being struck by a protruding timber on a passing train. 'By reason of the shock to her nervous system occasioned by this peril, her health was seriously impaired.' 52 N.J.L., at p. 266, 19 A. at 254. The court allowed recovery even though her fright, and not the injury, if any, sustained in the fall, caused her physical suffering. See also Tuttle v. Atlantic City R.R. Co., 66 N.J.L. 327, 49 A. 450 (E. & A. 1901). Our courts have also been willing to allow recovery for physical injury traceable directly to fright when there is any impact, however inconsequential or slight. Porter v. Delaware Lackawanna & W.R.R. Co., 73 N.J.L. 405, 63 A. 860 (Sup.Ct.1906); and Kennell v. Gershonovitz Bros., 84 N.J.L. 577, 87 A. 130 (Sup.Ct.1913). See also Smith v. Montclair Brown and White Cab Co., 6 N.J.Misc. 57, 139 A. 904 (Sup.Ct.1928), and Greenburg v. Stanley, supra. The application of this rule was illustrated in Porter v. Delaware, Lackawanna & W.R.R. Co., supra, where a woman became ill as the result of her shock at seeing a railroad bridge fall near the place where she was standing. She testified that something fell on her neck and that dust entered her eyes. In allowing recovery for the physical consequences of her fright, the court said either the small injury to her neck or the dust in her eyes was a sufficient 'impact' to distinguish the case from Ward. And third, recovery has been permitted where physical suffering resulted from a wilfully caused emotional disturbance. Kuzma v. Millinery Workers Union Local No. 24, 27 N.J.Super. 579, 591--592, 99 A.2d 833 (App.Div.1953). See also Spiegel v. Evergreen Cemetery Co., 117 N.J.L. 90, 186 A. 585 (Sup.Ct.1936); and Harris v. Delaware, Lackawanna and W.R.R. Co., 77 N.J.L. 278, 72 A. 50 (Sup.Ct.1909).

The second reason given in Ward for denying recovery was that the absence of suits of this nature in New Jersey demonstrated the concurrence of the bar with the rule of no liability. We do not believe the court meant to imply that it would deny recovery because of opinions held by lawyers on the legal question presented. And if the court intended to bar the [45 N.J. 566] cause of action because of a lack of precedent in this State, a sufficient answer is that the common law would have atrophied hundreds of years ago if it had continued to deny relief in cases of first impression. See State v. Culver, 23 N.J. 495, 505--507, 129 A.2d 715, (1957).

Public policy was the final reason given in Ward for denying liability. The court was of the opinion that proof or disproof of fear-induced physical suffering would be so difficult that recovery would often be based on mere conjecture and speculation, and that the door would be opened to extensive litigation in a class of cases where injury is easily feigned. We realize that there may be difficulties in determining the existence of a causal connection between fright and subsequent physical injury and in measuring the extent of such injury. However, the problem of tracing a causal connection from negligence to injury is not peculiar to cases without impact and occurs in all types of personal injury litigation. See e.g., Smith v. Brennan, 31 N.J. 353, 365, 157 A.2d 497 (1960); Van Rensselaer v. Viorst, 136 N.J.L. 628, 631, 57 A.2d 49 (E. & A. 1947); and Millman v. United States Mortgage & Title Guaranty Co., 121 N.J.L. 28, 36--37, 1 A.2d 265 (Sup.Ct.1938). See [214 A.2d 16] also Goodrich, supra, at pp. 503--507. As Judge Burke said for the New York Court of Appeals in dealing with the same problem:

'In many instances, just as in impact cases, there will be no doubt as to the presence and extent of the damage and the fact that it was proximately caused by defendant's negligence. In the difficult cases, we must look to the quality and genuineness of proof, and rely to an extent on the contemporary sophistication of the medical profession and the ability of the court and jury to weed out the dishonest claims.' Battalla v. State, 10 N.Y.2d 237, 242, 219 N.Y.S.2d 34, 38, 176 N.E.2d 729, 731--732 (1961).

In any event, difficulty of proof should not bar the plaintiff from the opportunity of attempting to convince the trier of fact of the truth of her claim.

As to the possibility of actions based on fictitious injuries, a court should not deny recovery for a type of wrong [45 N.J. 567] which may result in serious harm because some people may institute fraudulent actions. Our trial courts retain sufficient control, through the rules of evidence and the requirements as to the sufficiency of evidence, to safeguard against the danger that juries will find facts without legally adequate proof. Smith v. Brennan, supra, 31 N.J. at pp. 365--366, 157 A.2d 497. Moreover, the allowance of recovery in cases where there has been an impact, however slight, negates the effectiveness of the no impact rule as a method of preventing fraudulent claims. As stated by Dean McNiece in his comprehensive article dealing with tort liability for psychic injuries:

'To hold that all honest claims should be barred merely because otherwise some dishonest ones would prevail is stretching the public policy concept very close to the breaking point, especially since it is quite as simple to feign emotional disturbance plus slight impact and get in 'under the wire' of one of the exceptions as it is to feign emotional disturbance sans impact. The arbitrary denial of recovery in all cases not falling within the realm of one or another of the exceptions discourages the bringing of meritorious actions and at the same time allows the prosecution of fabricated claims, for surely those capable of perjuring evidence will not hesitate to manufacture one additional feature of the occurrence--a slight impact--to insure recovery.' McNiece, 'Pyschic Injury and Liability in New York,' 24 St.John's L.Rev. 1, 31 (1949).

Ward also asserts that public policy demands denial of recovery in no impact cases to prevent a 'flood of litigations.' However, there is no indication of an excessive number of actions of this type in other states which do not require an impact as a basis for recovery. And, of more importance, the fear of an expansion of litigation should not deter courts from granting relief in meritorious cases; the proper remedy is an expansion of the judicial machinery, not a decrease in the availability of justice.

The many eminent legal scholars who have considered the rule denying recovery in the absence of impact are virtually unanimous in condemning it as unjust and contrary to experience [45 N.J. 568] and logic.[3] The 1888 English case of Victorian Parkways Commissioners v. Coultas, 13 App.Cas. 222, which initiated the doctrine in England and which was followed in Ward, was repudiated in Dulieu v. White & Sons, 2 K.B. 669 [214 A.2d 17] (1901),[4] only one year after Ward was decided. And Mitchell v. Rochester Ry. Co., supra, upon which the court in Ward relied so heavily, was expressly overruled in 1961 by the New York Court of Appeals. Battalla v. State, supra. A great majority of jurisdictions now hold that where physical injury results from wrongfully caused emotional stress, the injured person may recover for such consequences notwithstanding the absence of any physical impact upon him at the time of the mental shock. See e.g., Robb v. Pennsylvania Railroad Company, Del., 210 A.2d 709 (Sup.Ct.1965); Battalla v. State, supra; Colla v. Mandella, 1 Wis.2d 594, 85 N.W.2d 345, 64 A.L.R.2d 95 (Sup.Ct.1957); Orlo v. Connecticut [45 N.J. 569] Co., 128 Conn. 231, 21 A.2d 402 (Sup.Ct.Err.1941); Chiuchiolo v. New England Wholesale Tailors, 84 N.H. 329, 150 A. 540 (Sup.Ct.1930); Restatement of the Law of Torts § 436(a)(2). Contra, Bosley v. Andrews, 393 Pa. 161, 142 A.2d 263 (1958). See also Annotation, 'Right to recover for emotional disturbance or its physical consequences, in the absence of impact or other actionable wrong,' 64 A.L.R.2d 100 (1959). Indeed, Dean Prosser has recently written that the impact requirement 'is almost certainly destined for ultimate extinction.' Prosser, Torts § 55, p. 351 (3d ed. 1964). Our conclusion is that Ward should no longer be followed in New Jersey. We are not dealing with property law, contract law or other fields where stability and predictability may be crucial. We are dealing with torts where there can be little, if any, justifiable reliance and where the rule of Stare decisis is admittedly limited. Collopy v. Newark Eye and Ear Infirmary, 27 N.J. 29, 42, 141 A.2d 276; Smith v. Brennan, supra, 31 N.J. at p. 361, 157 A.2d 497. We hold, therefore, that where negligence causes fright from a reasonable fear of immediate personal injury, which fright is adequately demonstrated to have resulted in substantial bodily injury or sickness, the injured person may recover if such bodily injury or sickness would be regarded as proper elements of damage had they occurred as a consequence of direct physical injury rather than fright. Of course, where fright does not cause Substantial bodily injury or sickness, it is to be regarded as too lacking in seriousness and too speculative to warrant the imposition of liability.

We recognize that where there is no impact a defendant may be unaware of the alleged incident and thus not forewarned to preserve evidence upon which he might base his defense. However, this consideration should not be sufficient to bar a meritorious claim. Rather, it is appropriate that the trial judge charge the jury that an undue delay in notifying the defendant of the incident and the resulting injury may weigh heavily in determining the truth of the plaintiff's [45 N.J. 570] claim. It is unnecessary to decide here whether an undue delay short of the statute of limitations would justify a dismissal by the trial court.

[214 A.2d 18] The plaintiffs should be given the opportunity of submitting proof that Mrs. Falzone suffered substantial bodily injury or sickness and that such bodily injury or sickness was the proximate result of the defendant's negligence.

Reversed.

For reversal: Chief Justice WEINTRAUB and Justices JACOBS, FRANCIS, PROCTOR, HALL, SCHETTINO and HANEMAN--7.

For affirmance: None.

[1] Wyman v. Leavitt, 71 Me. 227, 36 Am.Rep. 303 (Sup.Jud.Ct.1880); Ewing v. Pittsburg, C., C. & St. L. Ry. Co., 147 Pa. 40, 23 A. 340 (Sup.Ct.1892); Mitchell v. Rochester Ry. Co., 151 N.Y. 107, 45 N.E. 354 (Ct.App.1896); Spade v. Lynn & Boston R. Co., 168 Mass. 285, 47 N.E. 88 (Sup.Jud.Ct.1897); and Victorian Railways Commissioners v. Coultas, 13 App.Cas. 222 (1888).

[2] The word 'unrighteous' is an apparent misquotation; the New York Report shows that the New York Court of Appeals used the term 'fictitious.'

[3] See Prosser, Torts § 55, pp. 349--352 (3d ed. 1964); 2 Harper and James, The Law of Torts § 18.4, pp. 1031--1039 (1956); McNiece, 'Psychic Injury and Tort Liability in New York,' 24 St. John's L.Rev. 1 (1949); Smith, 'Relation of Emotions to Injury and Disease: Legal Liability for Psychic Stimuli,' 30 Va.L.Rev. 193 (1944); Smith and Solomon, 'Traumatic Neuroses in Court,' 30 Va.L.Rev. 87 (1943); Magruder, 'Mental and Emotional Disturbance in the Law of Torts,' 49 Harv.L.Rev. 1033 (1936); 1936 Report of N.Y.Law Rev.Comm., 375; Green, "Fright' Cases,' 27 Ill.L.Rev. 761 (1933); Hallen, 'Damages for Physical Injuries Resulting from Fright or Shock,' 19 Va.L.Rev. 253 (1933); Wilson, 'The New York Rule as to Nervous Shock,' 11 Cornell L.Q. 512 (1926); Goodrich, 'Emotional Disturbance as Legal Damage,' 20 Mich.L.Rev. 497 (1922); Throckmorton, 'Damages for Fright,' 34 Harv.L.Rev. 260 (1921); Burdick, 'Tort Liability for Mental Disturbance and Nervous Shock,' 5 Colum.L.Rev. 179 (1905); Bohlen, 'Right to Recover for Injury Resulting from Negligence Without Impact,' 41 Am.L.Reg. 141 (1902).

[4] 'Later cases in the Admiralty Division of the High Court of Justice and in the House of Lords treat Dulieu v. White as settling the law in England; and it may, therefore, be said that the Coultas case has been overruled and the doctrine established in England that there may be recovery for physical injuries resulting from nervous shock without proof of actual impact.' Throckmorton, supra, note 2, at p. 262.

18.1.2 Dillon v. Legg, 441 P.2d 728 (Cal. 1968) 18.1.2 Dillon v. Legg, 441 P.2d 728 (Cal. 1968)

TOBRINER, J.

          That the courts should allow recovery to a mother who suffers emotional trauma and physical injury from witnessing the infliction of death or injury to her child for which the tortfeasor is liable in negligence would appear to be a compelling proposition. As Prosser points out, "All ordinary human feelings are in favor of her [the mother's] action against the negligent defendant. If a duty to her requires that she herself be in some recognizable danger, then it has properly been said that when a child is endangered, it is not beyond contemplation that its mother will be somewhere in the vicinity, and will suffer serious shock." (Prosser, Law of Torts (3d ed. 1964) p. 353.)

          Nevertheless, past American decisions have barred the mother's recovery. Refusing the mother the right to take her case to the jury, these courts ground their position on an alleged absence of a required "duty" of due care of the tortfeasor to the mother. Duty, in turn, they state, must express public policy; the imposition of duty here would work disaster because it would invite fraudulent claims and it would involve the courts in the hopeless task of defining the extent of the tortfeasor's liability. In substance, they say, definition of liability being impossible, denial of liability is the only realistic alternative.

          We have concluded that neither of the feared dangers 731*731 excuses the frustration of the natural justice upon which the mother's claim rests. We shall point out that in the past we have rejected the argument that we should deny recovery upon a legitimate claim because other fraudulent ones may be urged. We shall further explain that the alleged inability to fix definitions for recovery on the different facts of future cases does not justify the denial of recovery on the specific facts of the instant case; in any event, proper guidelines can indicate the extent of liability for such future cases.

          In the instant case plaintiff's [fn. 1] first cause of action alleged that on or about September 27, 1964, defendant drove his automobile in a southerly direction on Bluegrass Road near its intersection with Clover Lane in the County of Sacramento, and at that time plaintiff's infant daughter, Erin Lee Dillon, lawfully crossed Bluegrass Road. The complaint further alleged that defendant's negligent operation of his vehicle caused it to "collide with the deceased Erin Lee Dillon resulting in injuries to decedent which proximately resulted in her death." (Complaint, p. 3.)plaintiff, as the mother of the decedent, brought an action for compensation for the loss.

          Plaintiff's second cause of action alleged that she, Margery M. Dillon, "was in close proximity to the ... collision and personally witnessed said collision." She further alleged that "because of the negligence of defendants ... and as a proximate cause [sic] thereof plaintiff ... sustained great emotional disturbance and shock and injury to her nervous system" which caused her great physical and mental pain and suffering.

          Plaintiff's third cause of action alleged that Cheryl Dillon, another infant daughter, was "in close proximity to the ... collision and personally witnessed said collision." Because of the negligence, Cheryl Dillon "sustained great emotional disturbance and shock and injury to her nervous system" which caused her great physical and mental pain and suffering.

          On December 22, 1965, defendant, after he had filed his answer, moved for judgment on the pleadings, contending that "No cause of action is stated in that allegation that plaintiff sustained emotional distress, fright or shock induced by apprehension of negligently caused danger or injury or the witnessing of negligently caused injury to a third person. 732*732 Amaya v. Home Ice, Fuel & Supply Co., 59 Cal.2d 295 [29 Cal.Rptr. 33, 379 P.2d 513] (1963). Even where a child, sister or spouse is the object of the plaintiff's apprehension no cause of action is stated, supra, p. 303, unless the complaint alleges that the plaintiff suffered emotional distress, fright or shock as a result of fear for his own safety. Reed v. Moore, 156 Cal.App.2d 43 (1957) at page 45 [319 P.2d 80]." (Italics added.) The court granted a judgment on the pleadings against the mother's count, the second cause of action, and denied it as to the sister's count, the third cause of action. The court, further, dismissed the second cause of action. Margery M. Dillon, the mother, appealed from that judgment.

          Thereafter, on January 26, further proceedings took place as to the third cause of action, Cheryl Dillon's claim for emotional trauma from witnessing her sister's death while "watching her sister lawfully cross Bluegrass Road."

          Defendant moved for summary judgment on this count. In opposition plaintiff contended that the declaration of one McKinley disclosed that Mrs. Dillon testified at her deposition that when she saw the car rolling over Erin she noted that Cheryl was on the curb, but that the deposition of Cheryl Dillon contradicts such statements.plaintiff therefore submitted that "Since the declarations filed by defendant are contradictory and the testimony contained in the testimony of Mrs. Dillon does not establish as a matter of law that Cheryl Dillon was not in the zone of danger or had fear for her own safety, plaintiff respectfully submits that the motion must be denied."

          The court denied the motion for summary judgment on the third cause as to Cheryl on the ground that the pretrial order precluded it. The trial court apparently sustained the motion for judgment on the pleadings on the second cause as to the mother because she was not within the zone of danger and denied that motion as to the third cause involving Cheryl because of the possibility that she was within such zone of danger or feared for her own safety. Thus we have before us a case that dramatically illustrates the difference in result flowing from the alleged requirement that a plaintiff cannot recover for emotional trauma in witnessing the death of a child or sister unless she also feared for her own safety because she was actually within the zone of physical impact.

          The posture of this case differs from that of Amaya v. Home Ice, Fuel & Supply Co. (1963) 59 Cal.2d 295, 298 [29 Cal.Rptr. 33, 379 P.2d 513], which involved "fright or nervous 733*733 shock (with consequent bodily illness) induced solely by ... apprehension of negligently caused danger or injury to a third person" because the complaint here presents the claim of the emotionally traumatized mother, who admittedly was not within the zone of danger, as contrasted with that of the sister, who may have been within it. The case thus illustrates the fallacy of the rule that would deny recovery in the one situation and grant it in the other. In the first place, we can hardly justify relief to the sister for trauma which she suffered upon apprehension of the child's death and yet deny it to the mother merely because of a happenstance that the sister was some few yards closer to the accident. The instant case exposes the hopeless artificiality of the zone- of-danger rule. In the second place, to rest upon the zone-of-danger rule when we have rejected the impact rule becomes even less defensible. We have, indeed, held that impact is not necessary for recovery (Cook v. Maier (1939) 33 Cal.App.2d 581, 584 [92 P.2d 434]). The zone-of-danger concept must, then, inevitably collapse because the only reason for the requirement of presence in that zone lies in the fact that one within it will fear the danger of impact. At the threshold, then, we point to the incongruity of the rules upon which any rejection of plaintiff's recovery must rest.

          [1] We further note, at the outset, that defendant has interposed the defense that the contributory negligence of the mother, the sister, and the child contributed to the accident. If any such defense is sustained and defendant found not liable for the death of the child because of the contributory negligence of the mother, sister or child, we do not believe that the mother or sister should recover for the emotional trauma which they allegedly suffered. In the absence of the primary liability of the tortfeasor for the death of the child, we see no ground for an independent and secondary liability for claims for injuries by third parties. [2a] The basis for such claims must be the adjudicated liability and fault of defendant; that liability and fault must be the foundation for the tortfeasor's duty of due care to third parties who, as a consequence of such negligence, sustain emotional trauma.

          We turn then to an analysis of the concept of duty, which, as we have stated, has furnished the ground for the rejection of such claims as the instant one. Normally the simple facts of plaintiff's complaint would establish a cause of action: the complaint alleges that defendant drove his car (1) negligently, as a (2) proximate result of which plaintiff suffered 734*734 (3) physical injury.proof of these facts to a jury leads to recovery in damages; indeed, such a showing represents a classic example of the type of accident with which the law of negligence has been designed to deal.

          The assertion that liability must nevertheless be denied because defendant bears no "duty" to plaintiff "begs the essential question--whether the plaintiff's interests are entitled to legal protection against the defendant's conduct. ... It [duty] is a shorthand statement of a conclusion, rather than an aid to analysis in itself. ... But it should be recognized that 'duty' is not sacrosanct in itself, but only an expression of the sum total of those considerations of policy which lead the law to say that the particular plaintiff is entitled to protection." (Prosser, Law of Torts, supra, at pp. 332-333.)

          The history of the concept of duty in itself discloses that it is not an old and deep-rooted doctrine but a legal device of the latter half of the nineteenth century designed to curtail the feared propensities of juries toward liberal awards. "It must not be forgotten that 'duty' got into our law for the very purpose of combatting what was then feared to be a dangerous delusion (perhaps especially prevalent among juries imbued with popular notions of fairness untempered by paramount judicial policy), viz., that the law might countenance legal redress for all foreseeable harm." (Fleming, An Introduction to the Law of Torts (1967) p. 47.)

          Indeed, the idea of court-imposed restrictions on recovery by means of the concept of "duty" contrasted dramatically with the preceding legal system of feudal society. [fn. 2] In the enclosed feudal society, the actor bore responsibility for any damage he inflicted without regard to whether he was at fault or owed a "duty" to the injured person. Thus, at that time, the defendant owed a duty to all the world to conduct himself 735*735 without causing injury to his fellows. It may well be that the physical contraction of the feudal society imposed an imperative for maximum procurable safety and a corresponding absolute responsibility upon its members.

          The Industrial Revolution, which cracked the solidity of the feudal society and opened up wide and new areas of expansion, changed the legal concepts. Just as the new competitiveness in the economic sphere figuratively broke out of the walls of the feudal community, so it broke through the rule of strict liability. In the place of strict liability it introduced the theory that an action for negligence would lie only if the defendant breached a duty which he owed to plaintiff. As Lord Esher said in Le Lievre v. Gould (1893) 1 Q.B. 491, 497: "A man is entitled to be as negligent as he pleases towards the whole world if he owes no duty to them."

          We have pointed out that this late 19th century concept of duty, as applied to the instant situation, has led the courts to deny liability. We have noted that this negation of duty emanates from the twin fears that courts will be flooded with an onslaught of (1) fraudulent and (2) indefinable claims. We shall point out why we think neither fear justified.

          1. This court in the past has rejected the argument that we must deny recovery upon a legitimate claim because other fraudulent ones may be urged.

          The denial of "duty" in the instant situation rests upon the prime hypothesis that allowance of such an action would lead to successful assertion of fraudulent claims. (See, e.g., Waube v. Warrington (1935) 216 Wis. 603, 613 [258 N.W. 497].) The rationale apparently assumes that juries, confronted by irreconcilable expert medical testimony, will be unable to distinguish the deceitful from the bona fide. The argument concludes that only a per se rule denying the entire class of claims that potentially raises this administrative problem [fn. 3] can avoid this danger.

          In the first instance, the argument proceeds from a doubtful factual assumption. Whatever the possibilities of fraudulent claims of physical injury by disinterested spectators of an accident, a question not in issue in this case, we certainly 736*736 cannot doubt that a mother who sees her child killed will suffer physical injury from shock. "It seems sufficiently obvious that the shock of a mother at danger or harm to her child may be both a real and a serious injury." (Prosser, Law of Torts, supra, at p. 353.)

          Over a half-century ago this court recognized the likelihood that such fright and fear would cause physical injury. In Sloane v. Southern California Ry. Co. (1896) 111 Cal. 668, 680 [44 P. 320, 32 L.R.A. 193], we affirmed a judgment for damages for a plaintiff who alleged physical injury resulting from mental suffering, saying: "It is a matter of general knowledge that an attack of sudden fright or an exposure to imminent peril has produced in individuals a complete change in their nervous system, and rendered one who was physically strong and vigorous weak and timid." Since no one can seriously question that fear or grief for one's child is as likely to cause physical injury as concern over one's own well-being, rejection of the fraudulent claims contention in Sloane clearly applies here.

          [3a] In the second instance, and more fundamentally, the possibility that fraudulent assertions may prompt recovery in isolated cases does not justify a wholesale rejection of the entire class of claims in which that potentiality arises. The "contention that the rule permitting the maintenance of the action would be impractical to administer ... is but an argument that the courts are incapable of performing their appointed tasks, a premise which has frequently been rejected." (Emden v. Vitz (1948) 88 Cal.App.2d 313, 319 [198 P.2d 696].) "[F]ear that unfounded claims may be put forward, and may result in erroneous conclusions of fact, ought not to influence us to impose legal limitations as to the nature of the facts that it is permissible to prove." (Owens v. Liverpool Corp. (1939) 1 K.B. 394, 400.) "Certainly it is a very questionable position for a court to take, that because of the possibility of encouraging fictitious claims compensation should be denied those who have actually suffered serious injury through the negligence of another." (Orlo v. Connecticut Co. (1941) 128 Conn. 231, 239 [21 A.2d 402]. See also Goodhart, The Shock Cases and Area of Risk (1953) 16 Modern L.Rev. 14, 23; Throckmorton, Damages for Fright (1921) 34 Harv.L.Rev. 260, 276.)

          On the analogous issue of whether the possibility of collusive fraud in intrafamily tort actions justified a per se rule denying recovery in all such cases, this court held that the 737*737 interests of meritorious plaintiffs should prevail over alleged administrative difficulties. Upholding the claim of a minor child in that situation we said: "The interest of the child in freedom from personal injury caused by the tortious conduct of others is sufficient to outweigh any danger of fraud or collusion. ... [T]he fact that there may be greater opportunity for fraud or collusion in one class of cases than another does not warrant courts of law in closing the door to all cases of that class. Courts must depend upon the efficacy of the judicial processes to ferret out the meritorious from the fraudulent in particular cases." (Emery v. Emery (1955) 45 Cal.2d 421, 431 [289 P.2d 218]; see also Klein v. Klein, (1962) 58 Cal.2d 692, 695-696 [26 Cal.Rptr. 102, 376 P.2d 70].)

          The possibility that some fraud will escape detection does not justify an abdication of the judicial responsibility to award damages for sound claims: if it is "to be conceded that our procedural system for the ascertainment of truth is inadequate to defeat fraudulent claims ..., the result is a virtual acknowledgment that the courts are unable to render justice in respect to them." (Chiuchiolo v. New England Wholesale Tailors (1930) 84 N.H. 329, 335 [150 A. 540].)

          Indubitably juries and trial courts, constantly called upon to distinguish the frivolous from the substantial and the fraudulent from the meritorious, reach some erroneous results. But such fallibility, inherent in the judicial process, offers no reason for substituting for the case-by-case resolution of causes an artificial and indefensible barrier. Courts not only compromise their basic responsibility to decide the merits of each case individually but destroy the public's confidence in them by using the broad broom of "administrative convenience" to sweep away a class of claims a number of which are admittedly meritorious. The mere assertion that fraud is possible, "a possibility [that] exists to some degree in all cases" (Klein v. Klein, supra, 58 Cal.2d 692, 695), does not prove a present necessity to abandon the neutral principles of foreseeability, proximate cause and consequential injury that generally govern tort law.

          Indeed, we doubt that the problem of the fraudulent claim is substantially more pronounced in the case of a mother claiming physical injury resulting from seeing her child killed than in other areas of tort law in which the right to recover damages is well established in California. For example, 738*738 a plaintiff claiming that fear for his own safety resulted in physical injury makes out a well recognized case for recovery. [fn. 4] (Lindley v. Knowlton (1918) 179 Cal. 298 [176 P. 440]Webb v. Francis J. Lewald Coal Co. (1931) 214 Cal. 182 [4 P.2d 532, 77 A.L.R. 675]Vanoni v. Western Airlines (1967) 247 Cal.App.2d 793 [56 Cal.Rptr. 115].) Moreover, damages are allowed for "mental suffering," a type of injury, on the whole, less amenable to objective proof than the physical injury involved here; the mental injury can be in aggravation of, or "parasitic to," an established tort. (Sloane v. Southern California Ry. Co., supra, 111 Cal. 668Acadia, California, Ltd. v. Herbert (1960) 54 Cal.2d 328 [5 Cal.Rptr. 686, 353 P.2d 294]Easton v. United Trade School Contracting Co. (1916) 173 Cal. 199 [159 P. 597, L.R.A. 1916A 394].) In fact, fear for another, even in the absence of resulting physical injury, can be part of these parasitic damages. (Acadia, California, Ltd. v. Herbert, supra, 54 Cal.2d 328, 337Easton v. United Trade School Contracting Co., supra, 173 Cal. 199, 202.) And emotional distress, if inflicted intentionally, constitutes an independent tort. (State Rubbish Collectors Assn. v. Siliznoff (1952) 38 Cal.2d 330, 338 [240 P.2d 282].) The danger of plaintiffs' fraudulent collection of damages for nonexistent injury is at least as great in these examples as in the instant case.

          In sum, the application of tort law can never be a matter of mathematical precision. In terms of characterizing conduct as tortious and matching a money award to the injury suffered as well as in fixing the extent of injury, the process cannot be perfect. Undoubtedly, ever since the ancient case of the tavern-keeper's wife who successfully avoided the hatchet cast by an 739*739 irate customer (I de S et ux v. W de S, Y.B. 22 Edw. iii, f. 99, pl. 60 (1348)), defendants have argued that plaintiffs' claims of injury from emotional trauma might well be fraudulent. Yet we cannot let the difficulties of adjudication frustrate the principle that there be a remedy for every substantial wrong.

          2. The alleged inability to fix definitions for recovery on the different facts of future cases does not justify the denial of recovery on the specific facts of the instant case; in any event, proper guidelines can indicate the extent of liability for such future cases.

          [4] In order to limit the otherwise potentially infinite liability which would follow every negligent act, the law of torts holds defendant amenable only for injuries to others which to defendant at the time were reasonably foreseeable.

          [5] In the absence of "overriding policy considerations ... foreseeability of risk [is] of ... primary importance in establishing the element of duty." (Grafton v. Mollica (1965) 231 Cal.App.2d 860, 865 [42 Cal.Rptr. 306]. See also McEvoy v. American Pool Corp. (1948) 32 Cal.2d 295 [195 P.2d 783]Hergenrether v. East (1964) 61 Cal.2d 440 [39 Cal.Rptr. 4, 393 P.2d 164].) As a classic opinion states: "The risk reasonably to be perceived defines the duty to be obeyed." (Palsgraf v. Long Island R.R. Co. (1928) 248 N.Y. 339, 344 [162 N.E. 99, 59 A.L.R. 253].) Defendant owes a duty, in the sense of a potential liability for damages, only with respect to those risks or hazards whose likelihood made the conduct unreasonably dangerous, and hence negligent, in the first instance. (See Keeton, Legal Cause in the Law of Torts (1963) 18-20; Seavey, Mr. Justice Cardozo and the Law of Torts (1939) 52 Harv.L.Rev. 372; Seavey, Principles of Torts (1942) 56 Harv.L.Rev. 72.)

          Harper and James state the prevailing view. The obligation turns on whether "the offending conduct foreseeably involved unreasonably great risk of harm to the interests of someone other than the actor. ... [T]he obligation to refrain from ... particular conduct is owed only to those who are foreseeably endangered by the conduct and only with respect to those risks or hazards whose likelihood made the conduct unreasonably dangerous. Duty, in other words, is measured by the scope of the risk which negligent conduct foreseeably entails." (2 Harper & James, The Law of Torts, supra, at p. 1018; fns. omitted.)

          [6a] This foreseeable risk may be of two types. The first class involves actual physical impact. A second type of risk 740*740 applies to the instant situation. "In other cases, however, plaintiff is outside the zone of physical risk (or there is no risk of physical impact at all), but bodily injury or sickness is brought on by emotional disturbance which in turn is caused by defendant's conduct. Under general principles recovery should be had in such a case if defendant should foresee fright or shock severe enough to cause substantial injury in a person normally constituted. Plaintiff would then be within the zone of risk in very much the same way as are plaintiffs to whom danger is extended by acts of third persons, or forces of nature, or their own responses (where these things are foreseeable)." (2 Harper & James, The Law of Torts, supra, at pp. 1035-1036; fns. omitted.) [fn. 5]

          Since the chief element in determining whether defendant owes a duty or an obligation to plaintiff is the foreseeability of the risk, that factor will be of prime concern in every case. Because it is inherently intertwined with foreseeability such duty or obligation must necessarily be adjudicated only upon a case-by-case basis. We cannot now predetermine defendant's obligation in every situation by a fixed category; no immutable rule can establish the extent of that obligation for every circumstance of the future. We can, however, define guidelines which will aid in the resolution of such an issue as the instant one.

          [7] We note, first, that we deal here with a case in which plaintiff suffered a shock which resulted in physical injury and we confine our ruling to that case. In determining, in such a case, whether defendant should reasonably foresee the injury to plaintiff, or, in other terminology, whether defendant owes plaintiff a duty of due care, the courts will take into account such factors as the following: (1) Whether plaintiff was located near the scene of the accident as contrasted with one who was a distance away from it. (2) Whether the shock resulted from a direct emotional impact upon plaintiff from the sensory and contemporaneous observance of the accident, 741*741 as contrasted with learning of the accident from others after its occurrence. (3) Whether plaintiff and the victim were closely related, as contrasted with an absence of any relationship or the presence of only a distant relationship.

          The evaluation of these factors will indicate the degree of the defendant's foreseeability: obviously defendant is more likely to foresee that a mother who observes an accident affecting her child will suffer harm than to foretell that a stranger witness will do so. Similarly, the degree of foreseeability of the third person's injury is far greater in the case of his contemporaneous observance of the accident than that in which he subsequently learns of it. The defendant is more likely to foresee that shock to the nearby, witnessing mother will cause physical harm than to anticipate that someone distant from the accident will suffer more than a temporary emotional reaction. All these elements, of course, shade into each other; the fixing of obligation, intimately tied into the facts, depends upon each case.

          In light of these factors the court will determine whether the accident and harm was reasonably foreseeable. [6b] Such reasonable foreseeability does not turn on whether the particular plaintiff as an individual would have in actuality foreseen the exact accident and loss; it contemplates that courts, on a case-to-case basis, analyzing all the circumstances, will decide what the ordinary man under such circumstances should reasonably have foreseen. The courts thus mark out the areas of liability, excluding the remote and unexpected.

          [8] In the instant case, the presence of all the above factors indicates that plaintiff has alleged a sufficient prima facie case. Surely the negligent driver who causes the death of a young child may reasonably expect that the mother will not be far distant and will upon witnessing the accident suffer emotional trauma. As Dean Prosser has stated: "when a child is endangered, it is not beyond contemplation that its mother will be somewhere in the vicinity, and will suffer serious shock." (Prosser, The Law of Torts, supra, at p. 353. See also 2 Harper & James, The Law of Torts, supra, at p. 1039.)

          We are not now called upon to decide whether, in the absence or reduced weight of some of the above factors, we would conclude that the accident and injury were not reasonably foreseeable and that therefore defendant owed no duty of due care to plaintiff. In future cases the courts will draw lines of demarcation upon facts more subtle than the compelling ones alleged in the complaint before us. 742*742

          The courts have in the past, in analogous situations, drawn the limits of liability, applying general guidelines such as those above set forth to the specific facts of the cases. As examples of that process of definition we set forth the history of the "open car" cases, the rulings on recovery by persons not in privity of contract for defendant's negligence in drafting instruments, the decisions on the intentional infliction of emotional injury, the modern English cases, and some illustrative opinions that adjudicate the specific issue before us.

          The ability of courts to limit liability predicated on tests largely based upon foreseeability is well illustrated by the "open car" cases. The prototype case is the suit against the owner of a vehicle for damage caused plaintiff by a third party who can commandeer the vehicle because of the owner's carelessness in leaving the keys inside. In Richardson v. Ham (1955) 44 Cal.2d 772 [285 P.2d 269], we posited liability on the owner of a bulldozer because of a "foreseeable risk of intermeddling" (p. 776), noting especially the great danger the bulldozer created and the special temptation it presented to third parties. Similarly, in Hergenrether v. East, supra, 61 Cal.2d 440, we upheld such liability of a truck owner on the basis of "greater potentiality of foreseeable risk" (p. 444) because of the possible danger of the vehicle, the time for which it was unattended, and the type of persons who frequent the neighborhood in which it was left.

          These decisions have not led to untrammeled liability. Rather, applying the foreseeability test, the courts have held that the mere act of leaving a key in an automobile, although it may possibly raise a foreseeable risk that the car will be stolen, does not increase the risk of injury to other property and hence does not warrant liability: "[e]ven if she could have foreseen the theft, she had no reason to believe that the thief would be an incompetent driver." (Richards v. Stanley (1954) 43 Cal.2d 60, 66 [271 P.2d 23].) In short, "each case must be considered on its own facts to determine whether the [situation] in toto justifies the conclusion that the foreseeable risk of harm imposed is unreasonable, and that the defendant owner or one in charge of a vehicle has a duty to third persons in the class of the plaintiffs to refrain from subjecting them to such risk." (Hergenrether v. East, supra, 61 Cal.2d 440, 445; see also England v. Mapes Produce Co. (1965) 238 Cal.App.2d 120 [47 Cal.Rptr. 506]Murray v. Wright (1958) 166 Cal.App.2d 589 [333 P.2d 111].)

          In another category of cases, those involving the liability of a tortfeasor to a third person with whom he was not in privity 743*743 of contract for negligent draftmanship of a legal document, we have recognized the right of the injured party to compensation and set out guidelines for the determination of future cases. In Lucas v. Hamm (1961) 56 Cal.2d 583, 588 [15 Cal.Rptr. 821, 364 P.2d 685], we applied this rule to an attorney who drew a defective will, thereby causing damage to the intended third-party beneficiary. (See also Biakanja v. Irving (1958) 49 Cal.2d 647, 650 [320 P.2d 16, 65 A.L.R.2d 1358].)

          In sanctioning recovery for injury caused by intentional infliction of mental distress, this court did not defer to the argument that liability should not be imposed because of the possible future difficulty in delimiting the area of liability. Defendants urged that if recovery were to be allowed for intentional infliction of emotional distress, actions would soon be forthcoming based upon every minor personal insult or indignity. We said: "That administrative difficulties do not justify the denial of relief for serious invasions of mental and emotional tranquility is demonstrated by the cases recognizing the right of privacy." (State Rubbish Collectors Assn. v. Siliznoff, supra, 38 Cal.2d 330, 338.) We rejected the contention "that to allow recovery in the absence of physical injury will open the door to unfounded claims and a flood of litigation, and that the requirement that there be physical injury is necessary to insure that serious mental suffering actually occurred" (State Rubbish Collectors Assn. v. Siliznoff, supra, 38 Cal.2d 330, 338).

          Indeed, the argument that "there is no point at which such actions would stop" is no more plausible today than when it was advanced in Winterbottom v. Wright (1842) 10 M. & W. 109, 111. History has exposed the fallacy of the claim that abolition of privity in enterprise liability cases would lead to "the most absurd and outrageous consequences, to which I can see no limit" (p. 114). In taking another giant step forward, in imposing product liability in tort, we were not halted by the spectre of an inability to pre-judge every future case. The setting of boundaries upon that doctrine makes the problem of fixing lines of limitation here appear, by comparison, almost miniscule. The widening of the area of liability and the possibility of the encouragement of unfounded and undefinable claims in the products liability field was sweeping; here we deal with a comparatively isolated and unusual situation. We do not believe that the fear that we cannot successfully adjudicate future cases of this sort, pursuant to the 744*744 suggested guidelines, should bar recovery in an otherwise meritorious cause.

          The fear of an inability to fix boundaries has not impelled the courts of England to deny recovery for emotional trauma caused by witnessing the death or injury of another due to defendant's negligence. We set forth the holdings of some English cases merely to demonstrate that courts can formulate and apply such limitations of liability.

          The first and classic case, Hambrook v. Stokes Bros., supra, 1 K.B. 141, rejected the argument that recovery should be denied because of possible administrative difficulty. In Hambrook the defendant's servant left a truck parked at the top of a steep and narrow street with the engine running. The deceased, a pregnant woman, had walked with her children on their way to school to the point where they turned onto the street where the truck was parked. Because the driver did not take proper precautions, the truck started itself down the hill and struck one of the children. Although she herself was never in danger, the mother saw the runaway truck and feared greatly for the safety of her children. Upon inquiry she found that one of the children had been seriously injured; several months later both the mother and the foetus were dead. The trial court directed the jury that the father's suit for loss of services could succeed only if the death were caused by the mother's fear for her own safety, but the appellate court held that the plaintiff could recover even if the fear for the children brought about her demise.

          Faced with the contention that their holding would increase the number of suits and foment possible fraudulent claims, Lord Justice Atkin quoted this passage: " 'I should be sorry to adopt a rule which would bar all such claims on grounds of policy alone, and in order to prevent the possible success of unrighteous or groundless actions. Such a course involves the denial of redress in meritorious cases, and it necessarily implies a certain degree of distrust, which I do not share, in the capacity of legal tribunals to get at the truth in this class of claim.' " (Hambrook v. Stokes Bros., supra, quoting from Dulieu v. White and Sons [1901] 2 K.B. 669, 681, opinion by Kennedy, J.)

          In a recent application of the Hambrook rule, an English court permitted recovery by a widow of a man who developed severe psychoneurotic symptoms as a result of harrowing experiences, not involving his personal safety, while serving as a rescuer at a gruesome train wreck. The court stated that 745*745 the " 'test of liability for shock is foreseeability of injury by shock.' " (Chadwick v. British Railways Board [1967] 1 W.L.R. 912, 920, quoting from King v. Phillips [1953] 1 Q.B. 429, 441, opinion by Denning, L.J.)

          Professor John Fleming of the School of Law, Boalt Hall, University of California, in a careful analysis of the development of English law on this subject, first explains, "It is evident, of course, that, to the extent of denying redress for certain kinds of negligently inflicted harm, the law is in effect withholding its protective mantle from corresponding human interests that may accordingly be infringed with impunity. To refuse a remedy for nervous shock is the equivalent of refusing to accede to an individual's claim for safeguarding his emotional security. It is also the same as saying that there is no 'duty' owed to exercise reasonable care to avoid inflicting this type of loss or injury. Although no longer quite as fashionable in this particular context, the same idea can also, finally, be expressed by asserting that such damage is 'too remote' or, what amounts to the same thing, that the defendant's negligence was not its 'proximate cause'." (Fleming, An Introduction to the Law of Torts (1967) p. 46.)

          After explaining that certain English cases manipulated doctrinal approaches "to subserve ulterior purposes" in granting recovery in some situations and denying it in others, Fleming states that "a long-delayed change in attitude may perhaps be discerned in the latest decision by the Court of Appeal [Boardman v. Sanderson (1964) 1 W.L.R. 1317 (C.A.)], which sustained a father's claim for a mental shock he suffered upon hearing the screams of his boy when the latter's foot was negligently caught under the wheel of the defendant's car from which father and son had just alighted inside a service garage. Neither did the father fear for his own safety nor did he so much as even see the accident. Indeed, the claimant was not even a female--the prototype plaintiff in these cases being almost exclusively concerned with pregnancy injuries. Yet the court considered it sufficient to say that a duty was owed not only to the boy but also to his near relatives, who, to the defendant's knowledge, were on the premises within earshot and likely to come upon the scene if any injury befell him. It remains to be seen whether this relaxation, slight as it may be, might not eventually be extended to relatives whose presence, though not actually known, was yet foreseeable in accordance with the prevailing 746*746 test customarily applied to claims for physical injuries." (Italics in original; fn. omitted.) (Fleming, An Introduction to the Law of Torts, supra, at p. 54.)

          The English courts have likewise marked out areas of liability, excluding those injuries that are remote and unexpected. Thus a distinguished English court has held that the physical injury of a casual bystander resulting from shock or fright upon witnessing an accident would present so unusual and hence unforeseeable an event as to warrant a directed verdict for defendant. "The driver of a car or vehicle, even though careless, is entitled to assume that the ordinary frequenter of the streets has sufficient fortitude to endure such incidents as may from time to time be expected to occur in them, including the noise of a collision and the sight of injuries to others, and is not to be considered negligent towards one who does not possess the customary phlegm." (Italics added.) (Bourhill v. Young (1943) A.C. 92, 117 (Lord Porter); see, id at pp. 98 (Lord Thankerton), 101 (Lord Russell), 104 (Lord MacMillan), and 107 (Lord Wright); King v. Phillips, supra, 1 Q.B. 429, 442.)

          [2b] Thus we see no good reason why the general rules of tort law, including the concepts of negligence, proximate cause, and foreseeability, long applied to all other types of injury, should not govern the case now before us. Any questions that the cause raises "will be solved most justly by applying general principles of duty and negligence, and ... mechanical rules of thumb which are at variance with these principles do more harm than good." (2 Harper & James, The Law of Torts, supra, p. 1039; fn. omitted.) "The refusal to apply these general rules to actions for this particular kind of physical injury is nothing short of a denial of justice." (Throckmorton, Damages for Fright, supra, 34 Harv.L.Rev. 260, 277; fn. omitted.)

          In short, the history of the cases does not show the development of a logical rule but rather a series of changes and abandonments. Upon the argument in each situation that the courts draw a Maginot Line to withstand an onslaught of false claims, the cases have assumed a variety of postures. At first they insisted that there be no recovery for emotional trauma at all. (Amaya v. Home Ice, Fuel & Supply Co., supra, 59 Cal.2d 295, dissenting opinion by Peters, J., p. 328 fn. 9.) Retreating from this position, they gave relief for such trauma only if physical impact occurred. (id at p. 325 fn. 4.) They then abandoned the requirement for physical impact but 747*747 insisted that the victim fear for her own safety (Amaya v. Home Ice, Fuel & Supply Co., supra, 59 Cal.2d 295), holding that a mother could recover for fear for her children's safety if she simultaneously entertained a personal fear for herself. (Lindley v. Knowlton, supra, 179 Cal. 298.) [fn. 6] They stated that the mother need only be in the "zone of danger" (Reed v. Moore (1957) 156 Cal.App.2d 43, 47 [319 P.2d 80]). The final anomaly would be the instant case in which the sister, who observed the accident, would be granted recovery because she was in the "zone of danger," but the mother, not far distant, would be barred from recovery.

          The successive abandonment of these positions exposes the weakness of artificial abstractions which bar recovery contrary to the general rules. As the commentators have suggested, the problem should be solved by the application of the principles of tort, not by the creation of exceptions to them. Legal history shows that artificial islands of exceptions, created from the fear that the legal process will not work, usually do not withstand the waves of reality and, in time, descend into oblivion.

          [3b] We have explained that recovery here will not expose the courts to false claims or a flood of litigation. The test that we have set forth will aid in the proper resolution of future cases. Indeed, the general principles of tort law are acknowledged to work successfully in all other cases of emotional trauma.

          [2c] Yet for some artificial reason this delimitation of liability is alleged to be unworkable in the most egregious case of them all: the mother's emotional trauma at the witnessed death of her child. If we stop at this point, however, we must necessarily question and reject not merely recovery here, but the viability of the judicial process for ascertaining liability 748*748 for tortious conduct itself. To the extent that it is inconsistent with our ruling here, we therefore overrule Amaya v. Home Ice Fuel & Supply Co., supra, 59 Cal.2d 295.

          To deny recovery would be to chain this state to an outmoded rule of the 19th century which can claim no current credence. No good reason compels our captivity to an indefensible orthodoxy.

The judgment is reversed.

Peters, J., Mosk, J., and Sullivan, J., concurred.

 

 

TRAYNOR, C. J.

          I dissent for the reasons set forth in Amaya v. Home Ice, Fuel & Supply Co. (1963) 59 Cal.2d 295, 297-315 [29 Cal.Rptr. 33, 379 P.2d 513]. In my opinion that case was correctly decided and should not be overruled.

 

 

BURKE, J.

          As recently as 1963 this court, in Amaya v. Home Ice, Fuel & Supply Co., 59 Cal.2d 295 [29 Cal.Rptr. 33, 379 P.2d 513], thoroughly studied and expressly rejected the proposition (pp. 298-299) that tort liability may be predicated on fright or nervous shock (with consequent bodily illness) induced solely by the plaintiff's apprehension of negligently caused danger or injury to a third person. As related in our Amaya opinion, plaintiff there was the mother of a 17-month-old boy who saw him struck by a truck; accordingly our ruling necessarily included all mothers of small children who observe them being injured. Yet today this court's Amaya decision is overruled by an opinion which disdains any discussion whatever of the history and policy of pertinent law painstakingly set forth in Amaya.

          Every one of the arguments advanced in today's opinion was considered by this court and rejected, expressly or by fair implication, in Amaya. [fn. 1] Further, as Amaya points out (p. 304 of 59 Cal.2d), in every jurisdiction in this country that had ruled on the point at issue the decisions up to that time (1963) were unanimous in upholding the rule of nonliability.

          So far as has been discovered, in not a single such jurisdiction has an appellate court ruled to the contrary since 749*749 Amaya. [fn. 2] But the majority make no attempt in today's opinion--as apparently they could not--to buttress their result with citations of cases based on American law, to say nothing of that of California. Instead, we are offered two English cases applying the 1925 Hambrook case (Hambrook v. Stokes Bros. [1925] 1 K.B. 141), whose ruling we expressly rejected in Amaya (pp. 303-304 [fn. 4], and 313, of 59 Cal.2d), and which, as already stated has not been followed or approved by any jurisdiction in this country.

          The majority, obviously recognizing that they are now embarking upon a first excursion into the "fantastic realm of infinite liability" (Amaya, at p. 315 of 59 Cal.2d), undertake to provide so-called "guidelines" for the future. But notwithstanding the limitations which these "guidelines" purport to impose, it is only reasonable to expect pressure upon our trial courts to make their future rulings conform to the spirit of the new elasticity proclaimed by the majority.

          Moreover, the majority's "guidelines" (ante, pp. 740-741) are simply a restatement of those suggested earlier by Professor Prosser (Prosser, Torts (2d ed., 1955) p. 182) they have already been discussed and expressly rejected by this court in Amaya (pp. 312-313). Upon analysis, their seeming certainty evaporates into arbitrariness, and inexplicable distinctions appear. [fn. 3] As we asked in Amaya: What if the plaintiff was honestly mistaken in believing the third person to be in danger or to be seriously injured? What if the third person had assumed the risk involved? How "close" must the relationship be between the plaintiff and the third person? I.e., what if the third person was the plaintiff's beloved niece or nephew, grandparent, fiance, or lifelong friend, more dear to the plaintiff than her immediate family? Next, how "near" 750*750 must the plaintiff have been to the scene of the accident, and how "soon" must shock have been felt? Indeed, what is the magic in the plaintiff's being actually present? Is the shock any less real if the mother does not know of the accident until her injured child is brought into her home? On the other hand, is it any less real if the mother is physically present at the scene but is nevertheless unaware of the danger or injury to her child until after the accident has occurred? No answers to these questions are to be found in today's majority opinion. Our trial courts, however, will not so easily escape the burden of distinguishing between litigants on the basis of such artificial and unpredictable distinctions.

          Further, and again contrary to the assertions of the majority (ante, pp. 732-733), no fallacy or incongruity appears in the rule permitting recovery to one within the physical zone of danger for trauma suffered from fear of impact, but denying it to a person outside that zone. The impact feared must be to oneself, and it must be an objective fear--not merely that of an excessively imaginative or timid plaintiff. As pointed out in the leading case of Waube v. Warrington (1935) 216 Wis. 603, 612-613 [258 N.W. 497], "It is one thing to say that as to those who are put in peril of physical impact, impact is immaterial if physical injury is caused by shock arising from the peril. It is the foundation of cases holding to this liberal ruling, that the person affrighted or sustaining shock was actually put in peril of physical impact, and under these conditions it was considered immaterial that the physical impact did not materialize. It is quite another thing to say that those who are out of the field of physical danger through impact shall have a legally protected right to be free from emotional distress occasioned by the peril of others, when that distress results in physical impairment." (Italics added.) Thus, California's rule that a plaintiff's reasonable fear for his own safety is compensable presents neither an argument for the same rule as to fear for others, nor a danger of recovery based on the plaintiff's false claims of fear for himself. [fn. 4] 751*751

          The assertion of the majority (ante, p. 735) that "The denial of 'duty' in the instant situation [i.e., physical impairment resulting from emotional distress occasioned by apprehension of the peril of others] rests upon the prime hypothesis that allowance of such an action would lead to successful assertion of fraudulent claims," (italics added) is controverted by the very case cited in support. (Waube v. Warrington, supra, 216 Wis. 603, 613.) Instead of reliance on any such "prime hypothesis," the Wisconsin court had this to say in Waube: "The answer to this question cannot be reached solely by logic, nor is it clear that it can be entirely disposed of by a consideration of what the defendant ought reasonably to have anticipated as a consequence of his wrong. The answer must be reached by balancing the social interests involved in order to ascertain how far defendant's duty and plaintiff's right may justly and expediently be extended. It is our conclusion that they can neither justly nor expediently be extended to any recovery for physical injuries sustained by one out of the range of ordinary physical peril as a result of the shock of witnessing another's danger. Such consequences are so unusual and extraordinary, viewed after the event, that a user of the highway may be said not to subject others to an unreasonable risk of them by the careless management of his vehicle. Furthermore, the liability imposed by such a doctrine is wholly out of proportion to the culpability of the negligent tort-feasor, would put an unreasonable burden upon users of the highway, open the way to fraudulent claims, and enter a field that has no sensible or just stopping point."

          As this court declared in Amaya (p. 315 of 59 Cal.2d), there is good sense in the conclusion of the court in Waube that "the liability imposed by such a doctrine is wholly out of proportion to the culpability of the negligent tort-feasor"; further, to permit recovery by every person who might adversely feel some lingering effect of the defendant's conduct would throw us into "the fantastic realm of infinite liability." Yet the majority opinion in the present case simply omits to either mention or discuss the injustice to California defendants flowing from such a disproportionate extension of their liability--an injustice which plainly constituted a "prime hypothesis" for rejection of the liability sought to 752*752 be imposed by the plaintiffs in Waube and in Amaya. (See also Jelley v. LaFlame (N.H. 1968) supra, 238 A.2d 728, 730, citing with approval and following this ground of decision expressed in Waube and in Amaya.)

          Additionally, the majority fail to explain their bare assertion (ante, p. 733) that contributory negligence of Erin will defeat any recovery by plaintiff mother and sister. [fn. 5] The familiar and heretofore unquestioned principle is that the relationships of parent and child or of husband and wife in themselves furnish no basis for imputation of contributory negligence. (Witkin, Summary of Cal. Law (1960) Torts, 341, p. 1542; Rest.2d Torts, 488.) Is this principle now abrogated in California? If so, it is a ruling extending far beyond the confines of the particular issue now before us, and reaches potentially every negligence action in which the plaintiffs are members of the same family.

          It appears to me that in the light of today's majority opinion the matter at issue should be commended to the attention of the Legislature of this state. Five years have elapsed since our Amaya decision, during which that body has not undertaken to change the law we there declared. We may presume, therefore, that the limitations upon liability there affirmed comport with legislative views. But if all alleged California tortfeasors, including motorists, home and other property owners, and governmental entities, are now to be faced with the concept of potentially infinite liability beyond any rational relationship to their culpability, then surely the point has been reached at which the Legislature should reconsider the entire subject and allow all interests affected to be heard.

          I would affirm the judgment.

McComb, J., concurred.

          [fn. 1] 1. For convenience, plaintiff will be used in the singular to denote the mother, although a minor sister is joined as plaintiff.

          [fn. 2] 2. "The gradual development of the law in the matter of civil liability is discussed and traced by the late Sir William Holdsworth with ample learning and lucidity in his History of English Law, vol. 8, pp. 446 et seq., and need not here be rehearsed. Suffice it to say that the process of evolution has been from the principle that every man acts at his peril and is liable for all the consequences of his acts to the principle that a man's freedom of action is subject only to the obligation not to infringe any duty of care which he owes to others. The emphasis formerly was on the injury sustained and the question was whether the case fell within one of the accepted classes of common law actions; the emphasis now is on the conduct of the person whose act has occasioned the injury and the question is whether it can be characterized as negligent." (Read v. J. Lyons & Co., Ltd. (1947) A.C. 156, 171.)

          [fn. 3] 3. To the extent that this argument shades into the contention that such claims should be denied because otherwise courts would experience a "flood of litigation," we point out that courts are responsible for dealing with cases on their merits, whether there be few suits or many; the existence of a multitude of claims merely shows society's pressing need for legal redress.

          [fn. 4] 4. California's rule that plaintiff's fear for his own safety is compensable also presents a strong argument for the same rule as to fear for others; otherwise, some plaintiffs will falsely claim to have feared for themselves, and the honest parties unwilling to do so will be penalized. (Cf. 2 Harper & James, The Law of Torts (1956) 16.15, p. 961.) Moreover, it is incongruous and somewhat revolting to sanction recovery for the mother if she suffers shock from fear for her own safety and to deny it for shock from the witnessed death of her own daughter. To the layman such a ruling must appear incomprehensible; for the courts to rely upon self- contradictory legalistic abstractions to justify it is indefensible. We concur with Judge Magruder's observation in 49 Harvard Law Review 1033, at page 1039: "Once accepting the view that a plaintiff threatened with an injurious impact may recover for bodily harm resulting from shock without impact, it is easy to agree with Atkin, L.J. ([Hambrook v. Stokes Bros., [1925] 1 K.B. 141, 158-159]), that to hinge recovery on the speculative issue whether the parent was shocked through fear for herself or for her children 'would be discreditable to any system of jurisprudence.' "

          [fn. 5] 5. The concept of the zone of danger cannot properly be restricted to the area of those exposed to physical injury; it must encompass the area of those exposed to emotional injury. The courts, today, hold that no distinction can be drawn between physical injury and emotional injury flowing from the physical injury; indeed, in the light of modern medical knowledge, any such distinction would be indefensible. As a result, in awarding recovery for emotional shock upon witnessing another's injury or death, we cannot draw a line between the plaintiff who is in the zone of danger of physical impact and the plaintiff who is in the zone of danger of emotional impact. The recovery of the one, within the guidelines set forth infra, is as much compelled as that of the other.

          [fn. 6] 6. In Lindley a 165- pound chimpanzee had entered plaintiff's house and attacked her children, whom she rescued from it. The court recognized that the concern of the mother for the safety of the children as well as concern for her own safety could have contributed to her fright. It states: "While, of course, Mrs. Lindley was greatly and perhaps chiefly concerned for her children ... there is nothing in the testimony to indicate that she was not concerned for her own safety." (P. 302.) As a basis for reversal of plaintiff's verdict defendant urged that the court should have instructed the jury that "no recovery may be had on account of fright produced by apprehended danger or peril to a third person." The court affirmed, saying that the circumstances made "it impossible that she should have been devoid of fear for herself" and that the instruction was therefor properly refused. Hence the court in substance sustained recovery for fright based upon a combination of fears, those arising from fear of the mother for the children as well as for herself.

          [fn. 1] 1. In Amaya the trial court sustained a general demurrer to the complaint and dismissed the action. The Court of Appeal reversed, and in its opinion pronounced the doctrine that is revived in the majority opinion here. (See (Cal.App.) 23 Cal.Rptr. 131.) Upon petition this court granted a hearing, thereby nullifying the Court of Appeal opinion. Our opinion affirmed the trial court.

          [fn. 2] 2. The courts of two states have expressly denied recovery: see Barber v. Pollock (1963) 104 N.H. 379 [187 A.2d 788] (wife witnessed from inside the house an accident in which her husband was killed); Jelley v. LaFlame (1968) 108 N.H. 471 [238 A.2d 728] (mother standing on side of highway witnessed an accident in which her 6-year-old daughter, who had alighted from a school bus, was crushed to death by a truck); Knaub v. Gotwalt (Pa. 1966) 422 Pa. 267 [220 A.2d 646], in which the court expressly rejected even the "impact" rule and noted that, as shown in 18 A.L.R.2d 220, virtually no jurisdiction permits recovery to a mere witness not in the zone of danger.

          [fn. 3] 3. Thus the Supreme Court of New Hampshire has recently recognized that to approve recovery by mothers of small children, as do the majority here, would create "the need ... to impose arbitrary and illogical limitations to prevent the undue extension of the liability of an alleged negligent operator such as the defendant in this case." (Jelley v. LaFlame (1968) supra, 238 A.2d 728, 730.)

          [fn. 4] 4. Contrary to the assertion of the majority (ante, pp. 746-747), no California case has held that "a mother could recover for fear for her children's safety if she simultaneously entertained a personal fear for herself." As correctly stated in Amaya (p. 300 of 59 Cal.2d), Lindley v. Knowlton (1918) 179 Cal. 298 [176 P. 440], held only that liability may be predicated upon fright and consequent illness induced by the plaintiff's reasonable fear for her own safety, even when the plaintiff may also have feared for the safety of her children. And as likewise correctly stated in Amaya (p. 302), the holding in Reed v. Moore (1957) 156 Cal.App.2d 43, 47 [319 P.2d 80], was that a wife who was outside the zone of danger but witnessed a collision in which her husband was injured could not recover. Neither Lindley nor Reed holds, or even suggests, that a plaintiff may recover for fear for the safety of another if she can establish that she herself was in the zone of danger.

          [fn. 5] 5. Neither does the majority opinion enlighten us as to how the contributory negligence of either (a) plaintiff mother or (b) plaintiff sister will assertedly defeat any recovery by the other.

18.1.3 Portee v. Jaffee 18.1.3 Portee v. Jaffee

84 N.J. 88
417 A.2d 521

Renee PORTEE, Individually and as General Administratrix and Administratrix ad Prosequendum of the Estate of Guy Portee, Deceased, Plaintiff-Appellant,

v.

Edith JAFFEE, Nathan Jaffee, Watson Elevator Company and Atlantic Elevator Company, Defendants-Respondents.

Supreme Court of New Jersey.
Argued May 5, 1980.
Decided July 29, 1980.

[84 N.J. 90] [417 A.2d 522] Joseph Maran, Newark, for plaintiff-appellant (Ira J. Zarin, Newark, attorney).

Isaac Henkoff, Clifton, for defendants-respondents Edith Jaffee and Nathan Jaffee (Klein, Chester, Greenburg & Henkoff, Clifton, attorneys).

Gerald Kaplan, Morristown, for defendants-respondents Watson Elevator Co. and Atlantic Elevator Co. (Lieb, Berlin & Kaplan, Morristown, attorneys).

The opinion of the Court was delivered by

PASHMAN, J.

We are asked to determine whether a parent can recover damages for the emotional anguish of watching her young child suffer and die in an accident caused by defendant's negligence. In Falzone v. Busch, 45 N.J. 559, 214 A.2d 12 (1965), this Court imposed liability for such infliction of mental or emotional distress when negligence created the potential, but not the occurrence, for physical harm to the traumatized individual. The question presented here is whether liability should exist where there was no potential for personal injury, but distress resulted from perceiving the negligently inflicted injuries of another.

Relying on Falzone, the trial court rejected liability and granted partial summary judgment for defendants on this issue, R. 4:46-3. After the Appellate Division granted plaintiff's motion for leave to appeal, we directly certified the case, R. 2:12-1. 82 N.J. 295, 412 A.2d 801 (1980). We now reversed the trial court and remand the matter for further proceedings.

The factual premises of this appeal are the uncontroverted assertions of plaintiff Renee Portee. In reviewing the dismissal of her claims as legally insufficient, we must accept as true all the allegations of the complaint, the affidavits and products of discovery submitted on her behalf. We must also draw those reasonable inferences that are most favorable to her cause. E. g., Berman v. Allen, 80 N.J. 421, 426, 404 A.2d 8 (1979); Heavner v. Uniroyal, Inc., 63 N.J. 130, 133, 305 A.2d 412 (1973); Judson v. Peoples Bank [84 N.J. 91] & Trust Co. of Westfield, 17 N.J. 67, 73-75, 110 A.2d 24 (1954); R. 4:46-2. The facts which follow are the result of this necessarily indulgent examination of the record.

Plaintiff's seven-year-old son, Guy Portee, resided with his mother in a Newark apartment building. Defendants Edith Jaffee and Nathan Jaffee owned and operated the building. On the afternoon of May 22, 1976, the youngster became trapped in the building's elevator between its outer door and the wall of the elevator shaft. The elevator was activated and the boy was dragged up to the third floor.[1] Another child who was racing up a nearby stairway to beat the elevator opened it, saw the victim wedged within it, and ran to seek help. Soon afterwards, plaintiff and officers of the Newark Police Department arrived. The officers worked for four and one-half hours to free the child. While their efforts continued, the plaintiff watched as her son moaned, cried out and flailed his arms. Much of the time she was restrained from touching him, apparently to [417 A.2d 523] prevent interference with the attempted rescue. The child suffered multiple bone fractures and massive internal hemorrhaging. He died while still trapped, his mother a helpless observer.

During the unsuccessful efforts to save Guy Portee's life, the police contacted the office of defendant Atlantic Elevator Company in nearby Belleville, New Jersey. Along with defendant Watson Elevator Company, which designed and built the elevator, Atlantic was responsible for the installation and maintenance of the elevator. The police requested that Atlantic send a mechanic to the building to assist in the attempt to free plaintiff's son. Apparently no one came.

After her son's death plaintiff became severely depressed and seriously self-destructive. On March 24, 1979, she attempted to take her own life. She was admitted to East Orange General Hospital with a laceration of her left wrist more than two inches deep. She survived and the wound was repaired by surgery, but she has since required considerable physical therapy and presently [84 N.J. 92] has no sensation in a portion of her left hand. She has received extensive counseling and psychotherapy to help overcome the mental and emotional problems caused by her son's death.

On December 2, 1976, plaintiff brought suit against the Jaffees and the two elevator companies. The complaint was premised on defendants' negligence in failing to provide a safe elevator.[2] As both general administratrix and administratrix ad prosequendum of the estate of Guy Portee, plaintiff asserted survival and wrongful death claims. N.J.S.A. 2A:15-3, :31-1. She also sued individually seeking damages for her mental and emotional distress caused by observing her son's anguish and death.[3]

Defendants Edith and Nathan Jaffee moved for summary judgment as to plaintiff's claims for mental and emotional distress on June 27, 1979. After a hearing the trial court granted the motion. In an oral opinion the court stated that Falzone v. Busch, supra, set the outer limits of liability for the negligent infliction of mental and emotional distress. The court noted that the Appellate Division had confirmed this view of Falzone in Burd v. Vercruyssen, 142 N.J.Super. 344, 361 A.2d 571 (1976), certif. den., 72 N.J. 459, 371 A.2d 64 (1976). Since plaintiff had concededly not been subjected to any risk of physical harm caused by defendants' alleged negligence, the trial court found that plaintiff's claims for psychological injury did not meet the requirements of Falzone.

Because the trial court considered this Court's decision in Falzone dispositive, we begin our discussion with that case. The plaintiff in Falzone had been placed in fear for her bodily safety [84 N.J. 93] by negligent conduct. See 45 N.J. at 561, 214 A.2d 12. Although she sustained no physical impact, this Court ruled plaintiff could recover damages for substantial bodily injury or sickness induced by fright. Id. at 569, 214 A.2d 12. In so holding, the Court overruled a long-established line of cases which had required some physical impact, however slight, to recover for emotional injuries. See, e. g., Tuttle v. Atlantic City R. R. Co., 66 N.J.L. 327, 49 A. 450 (E. & A.1901); Consolidated Traction Co. v. Lambertson, 60 N.J.L. 457, 458, 38 A. 683 (E. & A.1897); Greenberg v. Stanley, 51 N.J.Super. 90, 106, 143 A.2d 588 (App.Div.1958), mod. on other grounds, 30 N.J. 485, 153 A.2d 833 (1959); Justesen v. Pennsylvania R. R. Co., 92 N.J.L. 257, 106 A. 137 (Sup.Ct.1919); Ward v. West Jersey & S. R. R. Co., 65 N.J.L. 383, 47 A. 561 (Sup.Ct.1900); see also Graf v. Taggart, 43 N.J. 303, 312-313, 204 A.2d 140 (1964). It examined the three reasons given for the old rule, see Ward, supra, 65 N.J.L. at 385-386, 47 A. 561 [417 A.2d 524] and found them "no longer tenable." Falzone, supra, 45 N.J. at 563, 214 A.2d 12. The first reason that physical injury was presumed not to be a probable or natural consequence of fright was perceived by the Court as an issue to be resolved by medical evidence, not judicial presumption. Id. at 563-565, 214 A.2d 12. The Falzone Court rejected the second reason that there was a lack of precedent or consensus in favor of recovery as specious. Id. at 565-566, 214 A.2d 12; see State v. Culver, 23 N.J. 495, 505-507, 129 A.2d 715 (1957). The final reason traditionally advanced against liability was the prospect of recovery based on conjecture and speculation and a consequent flooding of the courts with groundless litigation. Falzone, supra, 45 N.J. at 566-567, 214 A.2d 12; see Ward, supra, 65 N.J.L. at 386, 47 A. 561. The Falzone Court responded by observing that the civil litigation process would safeguard against spurious and even fraudulent claims. 45 N.J. at 562, 214 A.2d 12. Finding the conventional rationales to be insufficient, the Court overruled Ward and held that "where negligence causes fright from a reasonable fear of immediate personal injury," the frightened person could recover damages for any resulting "substantial bodily injury or sickness." Id. at 569, 214 A.2d 12, 17.

Falzone expressly required that any resulting bodily harm be substantial. Id. It did not, however, explicitly limit liability to cases in which the distressed plaintiff had been subjected to an [84 N.J. 94] unreasonable risk of physical harm. See id. at 569-570, 214 A.2d 12. Nevertheless, since the new cause of action was in derogation of the prior inflexible requirement of physical impact,[4] some decisions interpreted Falzone narrowly. Liability has been denied where the plaintiff suffered distress without having been subjected to a risk of physical harm. Burd v. Vercruyssen, supra; Kern v. Kogan, 93 N.J.Super. 459, 226 A.2d 186 (Law Div.1967). Other cases have recognized the absence of such an express limitation in Falzone. When independently assessing foreseeable risks of emotional distress, courts have found possible liability for the negligent mishandling of a corpse, Muniz v. United Hospitals Med. Cen. Presbyterian Hosp., 153 N.J.Super. 79, 379 A.2d 57 (App.Div.1977), and for the unreasonably aggravating handling of a consumer's complaint about a defective product, Lemaldi v. De Tomaso of America, Inc., 156 N.J.Super. 441, 383 A.2d 1220 (Law Div.1978); see also Fiore v. Sears, Roebuck & Co., Inc., 144 N.J.Super. 74, 77, 364 A.2d 572 (Law Div.1976).

This Court has recognized that Falzone did not place express limits on negligence liability for mental or emotional distress. In Caputzal v. The Lindsay Co., 48 N.J. 69, 222 A.2d 513 (1966), we observed that questions of liability for non-intentional conduct were generally governed by the concepts of "duty, and the breach thereof, and proximate, or legal, cause of the injury * * *." Id. at 74, 222 A.2d at 516. Applying this general analysis to cases involving the infliction of psychological but not physical injury, the Court approved the following formula:

(L)iability should depend on the defendant's foreseeing fright or shock severe enough to cause substantial injury in a person normally constituted, thus then bringing the plaintiff within the "zone of risk." (Id. at 76, 222 A.2d at 517 (quoting 2 F. Harper & F. James, The Law of Torts, § 18.4 at 1036 (1956))

[84 N.J. 95] The Court recognized that Falzone had imposed liability occasioned by a risk of physical injury. 48 N.J. at 73, 222 A.2d 513. However, there was no requirement in the Caputzal formula that the "zone of risk" of [417 A.2d 525] mental or emotional distress coincide with a zone of risk of physical harm. More recently, in Berman v. Allen, supra, we held that where a doctor negligently failed to inform prospective parents that their child would likely suffer from severe genetic defects, the parents could recover damages for the emotional trauma of discovering their child's condition at birth. Id. 80 N.J. at 433, 404 A.2d 8.

Since Falzone, this Court's decisions have shown no hostility to the imposition of liability for negligently caused mental or emotional distress even without an attendant risk of physical harm. Our decision in Berman could support liability in this case. The trauma of witnessing the agonizing death of one's child may be no less substantial than the shocking realization that one's newborn child is profoundly crippled and will remain so for life. Both types of emotional injury also seem equally likely "in a person normally constituted," Caputzal, 48 N.J. at 76, 222 A.2d 513. The sole distinction between Berman and the present case may be described in terms of the degree of foreseeability. While in Berman, the mother was necessarily present at the birth of her child, and the father's presence was an all but certain eventuality, here the plaintiff was present at the scene of her son's death only because of the physical proximity of the accident to the mother's residence. Thus, one formulation of the issue before us is whether it was foreseeable that the mother would be observing the death of her young child.

The possibility that a parent may be near her young child is always substantial. Yet the recognition of a substantial possibility of harm does not resolve the question of liability. The standard is one of reasonable foreseeability, see Caputzal, 48 N.J. at 74-75, 222 A.2d 513; more directly stated, we must determine whether defendants owed a duty to the plaintiff that was violated when her child became trapped in the elevator. It might be argued that plaintiff had been continuously subjected to a risk of physical injury by the presence of a defective elevator in her [84 N.J. 96] building. Although this reasoning would place the present case within the rule of Falzone, it would transform the requirement of a risk of physical injury into the same arbitrary formality as the former rule of physical impact, see supra at 524, n.4. Rather than adopt this artful yet artificial approach, we address directly whether defendants owed the mother a duty of reasonable care.

Few notions anywhere in the law are more vague than the fundamental concept of the law of negligence: the duty of reasonable care. This is because few are more closely linked with prevailing community standards of conduct. The issue of negligence is frequently a matter left to the judgment of the community as expressed by a panel of jurors. Although our courts have avoided attaching to this issue the confusing label of "a mixed question of law and fact," the phrase aptly connotes that juries in negligence cases as much make the law as apply it.

On many occasions, the law of negligence needs no other formulation besides the duty of reasonable care. Other cases, however, present circumstances rendering application of that general standard difficult, if not impossible. Without adequate guidance, juries may impose liability that is not commensurate with the culpability of defendant's conduct.

This difficulty has been recognized when courts considered liability for mental and emotional distress. We have noted the traditional argument, rejected by this Court in Falzone, that the imposition of such liability unoccasioned by any physical impact would lead to "mere conjecture and speculation." Falzone, supra, 45 N.J. at 566, 214 A.2d 12. Even where the causal relationship between conduct and emotional harm was clear, courts would deny liability unless the fault of defendant's conduct could be demonstrated by the occurrence of physical harm to the plaintiff. See id. at 564-565, 214 A.2d 12. Under Falzone, it became clear that the creation of a risk of physical harm would be a sufficient indication that defendant's conduct was unreasonable. Without such an indication, it might be argued [417 A.2d 526] that a jury could not form a reliable judgment regarding negligence. The question now before us is whether we are left to "mere conjecture and [84 N.J. 97] speculation" in assessing the culpability of conduct that creates neither the risk nor the occurrence of physical harm.

The task in the present case involves the refinement of principles of liability to remedy violations of reasonable care while avoiding speculative results or punitive liability. The solution is close scrutiny of the specific personal interests assertedly injured. By this approach, we can determine whether a defendant's freedom of action should be burdened by the imposition of liability. In the present case, the interest assertedly injured is more than a general interest in emotional tranquility. It is the profound and abiding sentiment of parental love. The knowledge that loved ones are safe and whole is the deepest wellspring of emotional welfare. Against that reassuring background, the flashes of anxiety and disappointment that mar our lives take on softer hues. No loss is greater than the loss of a loved one, and no tragedy is more wrenching than the helpless apprehension of the death or serious injury of one whose very existence is a precious treasure. The law should find more than pity for one who is stricken by seeing that a loved one has been critically injured or killed.

Courts in other jurisdictions which have found liability in the circumstances before us have placed limits on this type of negligence liability consistent with their view of the individual interest being injured. In Dillon v. Legg, 68 Cal.2d 728, 441 P.2d 912, 69 Cal.Rptr. 72 (1968) (in bank), the California Supreme Court identified three factors which would determine whether an emotional injury would be compensable because "foreseeable":

(1) Whether plaintiff was located near the scene of the accident as contrasted with one who was a distance away from it. (2) Whether the shock resulted from a direct emotional impact upon plaintiff from the sensory and contemporaneous observance of the accident, as contrasted with learning of the accident from others after its occurrence. (3) Whether plaintiff and the victim were closely related, as contrasted with an absence of any relationship or the presence of only a distant relationship. (Id. at 740, 441 P.2d at 920, 69 Cal.Rptr. at 80)

Those courts which have permitted actions for negligent infliction of emotional injuries unaccompanied by the risk of physical harm have adopted or followed these guidelines. See D'Amicol v. Alvarez Shipping Co., Inc., 31 Conn.Sup. 164, 326 A.2d 129 [84 N.J. 98] (1973); Kelley v. Kokua Sales & Supply, Ltd., 56 Hawaii 204, 532 P.2d 673 (Sup.Ct.1975); Dziokonski v. Babineau, --- Mass. ----, 380 N.E.2d 1295 (Sup.Jud.Ct.1978); Toms v. McConnell, 45 Mich.App. 647, 207 N.W.2d 140 (1973); Sinn v. Burd, 486 Pa. 146, 404 A.2d 672 (1979); D'Ambra v. United States, 114 R.I. 643, 338 A.2d 524 (1975); Landreth v. Reed, 570 S.W.2d 486 (Tex.Civ.App.1978).

We agree that the three factors described in Dillon together create a strong case for negligence liability. In any given case, as physical proximity between plaintiff and the scene of the accident becomes closer, the foreseeable likelihood that plaintiff will suffer emotional distress from apprehending the physical harm of another increases. The second requirement of "direct * * * sensory and contemporaneous observance" appears to reflect a limitation of the liability rule to traumatic distress occasioned by immediate perception. The final criterion, that the plaintiff be "closely related" to the injured person, also embodies the judgment that only the most profound emotional interests should receive vindication for their negligent injury.

Our analysis of the specific emotional interest injured in this case a fundamental interest in emotional tranquility founded on parental love reveals where the limits of liability would lie. Addressing the Dillon criteria in reverse order, we find the last the existence of a close relationship to be the most crucial. It is the presence of deep, intimate, familial ties between the plaintiff and the physically injured person that makes the harm to emotional tranquility [417 A.2d 527] so serious and compelling. The genuine suffering which flows from such harm stands in stark contrast to the setbacks and sorrows of everyday life, or even to the apprehension of harm to another, less intimate person.[5] The existence of a marital[6] or intimate familial relationship [84 N.J. 99] is therefore an essential element of a cause of action for negligent infliction of emotional distress. In the present case, the instinctive affection of a mother for her seven-year-old son would be a sufficiently intimate bond on which to predicate liability.

The second requirement that the plaintiff witness the incident which resulted in death or serious injury is equally essential. We recognize that to deny recovery solely because the plaintiff was not subjected to a risk of physical harm would impose an arbitrary barrier that bears no relation to the injury to his basic emotional stability. See Dillon v. Legg, supra, 68 Cal.2d at 733, 441 P.2d at 915, 69 Cal.Rptr. at 75; Toms v. McConnell, supra, 45 Mich.App. at 653, 207 N.W.2d at 144. Yet avoiding arbitrary distinctions does not entail that a cause of action should exist for all emotional injuries to all the close relatives of the victim. This expansive view would extend judicial redress far beyond the bounds of the emotional interest entitled to protection. To avoid imposing liability in excess of culpability, the scope of recovery must be circumscribed to negligent conduct which strikes at the plaintiff's basic emotional security.

Discovering the death or serious injury of an intimate family member will always be expected to threaten one's emotional welfare. Ordinarily, however, only a witness at the scene of the accident causing death or serious injury will suffer a traumatic sense of loss that may destroy his sense of security and cause severe emotional distress. As Justice Cardozo stated in his classic formulation, "The risk reasonably to be perceived defines the duty to be obeyed." Palsgraf v. Long Island R.R. Co., 248 N.Y. 339, 344, 162 N.E. 99, 100 (1928); see 2 F. Harper & F. James, supra, § 18.2 at 1018. Such a risk of severe emotional distress is present when the plaintiff observes the accident at the scene. Without such perception, the threat of emotional injury is lessened and the justification for liability is fatally weakened. The law of negligence, while it redresses suffering wrongfully caused by others, must not itself inflict undue harm by imposing an unreasonably excessive measure of liability. [84 N.J. 100] Accordingly, we hold that observing the death or serious injury of another while it occurs is an essential element of a cause of action for the negligent infliction of emotional distress.

The first factor discussed in Dillon that the plaintiff be near the injured person embodies the same observations made concerning the other requirements of direct perception and close familial relationship. Physical proximity may be of some relevance in demonstrating the closeness of the emotional bond between plaintiff and the injured family member. For example, one would generally suppose that the risk of emotional distress to a brother who is halfway across the country is not as great as to a mother who is at the scene of the accident. The proximity of the plaintiff to the accident scene increases the likelihood that he will witness the event causing the death or serious injury of a loved one. Yet it appears that if the plaintiff must observe the accident that causes death or serious injury, a requirement of proximity is necessarily satisfied. The risk of emotional injury exists by virtue of the plaintiff's perception of the accident, not his proximity to it.

An additional factor yet undiscussed is the severity of the physical injury causing emotional distress. The harm we have determined to be worthy of judicial redress is [417 A.2d 528] the trauma accompanying the observation of the death or serious physical injury of a loved one. While any harm to a spouse or a family member causes sorrow, we are here concerned with a more narrowly confined interest in mental and emotional stability. When confronted with accidental death, "the reaction to be expected of normal persons," Caputzal, supra, 48 N.J. at 76, 222 A.2d at 517 (quoting 2 F. Harper & F. James, The Law of Torts, § 18.4 at 1035), is shock and fright. We hold that the observation of either death or this type of serious injury is necessary to permit recovery. Since the sense of loss attendant to death or serious injury is typically not present following lesser accidental harm, perception of less serious harm would not ordinarily result in severe emotional distress. Thus, the risk of an extraordinary reaction to less serious injury is not sufficient to result in liability. To impose liability for any emotional consequence of [84 N.J. 101] negligent conduct would be unreasonable; it would also be unnecessary to protect a plaintiff's basic emotional stability. Therefore, a cause of action for emotional distress would require the perception of death or serious physical injury.

The cause of action we approve today for the negligent infliction of emotional distress requires proof of the following elements: (1) the death or serious physical injury of another caused by defendant's negligence; (2) a marital or intimate, familial relationship between plaintiff and the injured person; (3) observation of the death or injury at the scene of the accident; and (4) resulting severe emotional distress. We find that a defendant's duty of reasonable care to avoid physical harm to others extends to the avoidance of this type of mental and emotional harm. As Chief Justice Weintraub stated:

Whether a duty exists is ultimately a question of fairness. The inquiry involves a weighing of the relationship of the parties, the nature of the risk, and the public interest in the proposed solution. (Goldberg v. Housing Auth. of Newark, 38 N.J. 578, 583, 186 A.2d 291, 293 (1962) (emphasis in original))

Our inquiry has led us to conclude that the interest in personal emotional stability is worthy of legal protection against unreasonable conduct. The emotional harm following the perception of the death or serious injury to a loved one is just as foreseeable as the injury itself, for few persons travel through life alone. Ultimately we must decide whether protecting these emotional interests outweighs an interest against burdening freedom of conduct by imposing a new species of negligence liability. We believe that the interest in emotional stability we have described is sufficiently important to warrant this protection. At the same time we are confident that limiting judicial redress to those inflicted on intimate emotional bonds by the death or serious injury of a loved one serves to prevent liability from exceeding the culpability of defendant's conduct.

A final matter remaining for consideration is the effect of the injured party's own negligence on plaintiff's right to recover. Under our Comparative Negligence Act, L. 1973, c. 146, N.J.S.A. 2A:15-5.1 to -5.3, the injured person's own recovery would be reduced by the proportion of his negligence so long as it was "not greater than the negligence of the person against [84 N.J. 102] whom recovery is sought(.)" N.J.S.A. 2A:15-5.1. To allow a plaintiff seeking damages for emotional injuries to recover a greater proportion than the injured party would surely create liability in excess of the defendant's fault. We therefore hold that any recovery for emotional harm resulting from perceiving the death or serious injury to another shall be reduced by the proportion of the injured party's negligence, as well as, of course, any contributing negligence of the plaintiff himself.

For the foregoing reasons, the judgment of the Superior Court, Law Division, is reversed.

For reversal Chief Justice WILENTZ, and Justices SULLIVAN, PASHMAN, CLIFFORD, SCHREIBER, HANDLER and POLLOCK 7.

For affirmance none.

[1] The record does not indicate the floor on which the elevator started.

[2] We therefore find no occasion to consider whether liability would exist against defendant landlords for breach of their implied warranty of habitability. See Trentacost v. Brussel, 82 N.J. 214, 412 A.2d 436 (1980).

[3] The victim's father, who was estranged from plaintiff at the time of the fatal incident, filed a separate suit against defendants. Although the actions of both parents were consolidated for trial, the father's claims are not before us.

[4] While inflexible, the traditional requirement of physical contact was often a mere formality. Contact unrelated to the source of plaintiff's fright was sufficient to permit recovery of damages for mental or emotional distress. See, e. g., Greenberg v. Stanley, 51 N.J.Super. at 105-106, 143 A.2d 588; Porter v. Delaware, L. & W. R. R. Co., 73 N.J.L. 405, 406, 63 A. 860 (Sup.Ct.1906); Buchanan v. West Jersey R. R. Co., 52 N.J.L. 265, 19 A. 254 (Sup.Ct.1890); see also Friel v. Vineland Obstetrical and Gynecological Prof. Ass'n, 166 N.J.Super. 579, 400 A.2d 147 (Law Div.1979) (physical impact of birth found to permit liability based on negligent medical care).

[5] A failure to recognize the contrast may have been responsible for the refusal of the New York Court of Appeals to permit this cause of action based on physical harm to another. See Tobin v. Grossman, 24 N.Y.2d 609, 615-617, 249 N.E.2d 419, 422-423, 301 N.Y.S.2d 554, 558-560 (1969).

[6] The common law action for loss of consortium may be perceived as a claim for negligently inflicted emotional injury. See Ekalo v. Constructive Serv. Corp. of Amer., 46 N.J. 82, 86-91, 215 A.2d 1 (1965).

18.1.4 Graves v. Estabrook, 818 A.2d 1255 (N.H. 2003) 18.1.4 Graves v. Estabrook, 818 A.2d 1255 (N.H. 2003)

DUGGAN, J.

          The plaintiff, Catrina Graves, appeals a ruling by the Superior Court (Hampsey, J.) granting the defendant, Franklin L. Estabrook's, motion to dismiss her complaint for negligent infliction of emotional distress. Estabook argued that because Graves was not related by blood or marriage to the decedent, but was only the decedent's fiancée, she cannot recover for negligent infliction of emotional distress. We reverse and remand.

          We rely upon the facts pled by Graves. In reviewing a motion to dismiss for failure to state a claim upon which relief may be granted, we assume the truth of all facts alleged by the plaintiff and construe all reasonable inferences in the light most favorable to her. Minuteman, LLC v. Microsoft Corp., 147 N.H. 634, 636 (2002). If the facts do not constitute a basis for legal relief, we will uphold the granting of the motion to dismiss. Id.

          Graves was engaged to Brett A. Ennis and had lived with him for approximately seven years. On September 23, 2000, Ennis was riding his motorcycle while Graves followed immediately behind him in a car. At an intersection, Estabrook's vehicle failed to yield at a stop sign and collided with Ennis. As Graves looked on, Ennis flipped over the hood of Estabrook's car and landed on the pavement. Graves immediately stopped her car and ran to the aid of her fiancé. She saw blood coming from his mouth and significant trauma to his head. She followed the ambulance that transported her fiancé to the hospital, stayed by his side while he was being treated, and attempted to comfort his parents and son. Ennis died the next day. Graves alleges that as a result of witnessing the collision and death of her fiancé, she suffered shock, severe mental pain and emotional distress.

          The issue before us is whether a plaintiff who lived with and was engaged to marry the decedent may recover for negligent infliction of emotional distress. We hold that she may recover damages for emotional distress as a result of witnessing the collision.

          Many of the first States to recognize bystander liability for negligent infliction of emotional distress limited its scope by applying the "physical impact test," without considering foreseeability. See Consolidated Rail Corp. v. Gottshall, 512 U.S. 532, 546-47 (1994). Under the physical impact test, the plaintiff must have sustained a physical impact, no matter how slight, in order to recover. Id. New Hampshire never adopted the physical impact test but instead followed the zone of danger rule. Corso v. Merrill, 119 N.H. 647, 650 (1979)Jelly v. LaFlamme, 108 N.H. 471 (1968)Cote v. Litawa, 96 N.H. 174 (1950). We followed this rule because we were concerned that "we would expose a defendant to liability that extended far 204*204 beyond his culpability." Corso, 119 N.H. at 653. That rule permitted recovery only when the bystander was within a physical zone of danger created by the defendant's negligence. See Jelly, 108 N.H. 471.

          In Corso, however, we rejected the zone of danger rule. Corso, 119 N.H. at 658. Instead, we applied the traditional negligence analysis of foreseeability and concluded that "[a]lthough fear of unlimited liability is a valid concern, we now think that this concern must be weighed against a plaintiffs serious emotional injury that is directly caused by defendant's negligence." Id. at 653.

          We held that "freedom from mental distress is an interest that is today worthy of legal protection" and that in deciding whether a defendant could be held liable, "[t]he key to applying a traditional negligence approach is the doctrine of foreseeability." Id. at 651-52; see Barnhill v. Davis, 300 N.W.2d 104, 107 (Iowa 1981)State v. Eaton, 710 P.2d 1370, 1375 (Nev. 1985)Clohessy v. Bachelor, 675 A.2d 852, 862 n. 11 (Conn. 1996) (all citing Corso's traditional approach with approval).

          We adopted the test first enunciated in Dillon v. Legg, 441 P.2d 912 (Cal. 1968), in which the California Supreme Court set forth three factors for determining whether a defendant should reasonably foresee injury to a bystander:

(1) Whether plaintiff was located near the scene of the accident as contrasted with one who was a distance away from it. (2) Whether the shock resulted from a direct emotional impact upon plaintiff from the sensory and contemporaneous observance of the accident, as contrasted with learning of the accident from others after its occurrence. (3) Whether plaintiff and the victim were closely related, as contrasted with an absence of any relationship or the presence of only a distant relationship.

          Dillon v. Legg, 441 P.2d at 920. Dillon noted that these three factors are not a rigid framework but "contemplate[] that courts, on a case-to-case basis, analyzing all the circumstances, will decide what the ordinary man under such circumstances should reasonably have foreseen." Id. at 921.

          This case requires us to examine the scope of Dillon's third factor. The defendant argues that we should continue to follow the California Supreme Court and adopt its subsequent holding in Elden v. Sheldon, 758 P.2d 582 (Cal. 1988). There, the court held that unmarried cohabitants are not "closely related" and cannot recover for negligent infliction of emotional distress. Id. at 588. Other courts have adopted the same rule. See Ferretti v. Weber, 513 So. 2d 1333 (Fla. Dist. Ct. App. 1987)Sollars v. City of Albuquerque, 794 F. Supp. 360, 363 (D.N.M. 1992)Hastie v. Rodriguez, 205*205 716 S.W.2d 675, 676 (Tex. App. 1986). See generally Annotation, Relationship Between Victim And Plaintiff-Witness As Affecting Right To Recover Under State Law For Negligent Infliction Of Emotional Distress Due To Witnessing Injury To Another Where Bystander Plaintiff Is Not Member Of Victim's Immediate Family, 98 A.L.R.5TH 609 (2002); Note, It's All Relative: A Graphical Reasoning Model For Liberalizing Recovery For Negligent Infliction Of Emotional Distress Beyond The Immediate Family, 30 VAL. U. L. REV. 913, 917 (1996) [hereinafter cited as Note].

          As noted by the New Jersey Supreme Court in Dunphy v. Gregor, 642 A.2d 372, 375 (N.J. 1994), "the [California Supreme Court] in Elden was reacting to the experience of the California courts with bystander liability under the Dillon standard." After Dillon, California courts had significantly expanded the scope of bystander liability. For instance, the supreme court had held that a plaintiff need not visually perceive the injury to the third party. See Krouse v. Graham, 562 P.2d 1022, 1031 (Cal. 1977). Other California courts had held that arriving soon after the accident was sufficient to satisfy the first two prongs of Dillon. See, e.g., Nazaroff v. Super. Ct. In And For Cty. Of Santa Cruz, 145 Cal. Rptr. 657, 664 (Ct. App. 1978)Archibald v. Braverman, 79 Cal. Rptr. 723 (Ct. App. 1969). The courts had also broadly interpreted the "closely related" factor. See Mobaldi v. Board of Regents of University of Cal., 127 Cal. Rptr. 720, 726-27 (Ct. App. 1976); see also Ledger v. Tippitt, 210 Cal. Rptr. 814, 824-28 (Ct. App. 1985). Thus, one reason for the holding in Elden was a need to rein in the expansion of bystander liability in California.

          There has been no comparable expansion of the scope of bystander liability in New Hampshire. Indeed, in Corso, we emphasized the limits of bystander liability.

Plaintiff's burden of proving causation in fact should not be minimized. The emotional injury must be directly attributable to the emotional impact of the plaintiff's observation or contemporaneous sensory perception of the accident and immediate viewing of the accident victim. Therefore, recovery will not be permitted for emotional distress when the plaintiff is merely informed of the matter after the accident or for the grief that may follow from the death of the related accident victim.

Corso, 119 N.H. at 656.

          We subsequently have adhered to the limitations created in Corso. For example, in Nutter v. Frisbee Memorial Hospital, 124 N.H. 791 (1984), we refused to expand liability to plaintiffs who reached the hospital shortly after their child died. We cautioned that a "rule that permitted 206*206 recovery ... would create a potential cause of action in every parent who learned, by any reasonable means, of his or her child's negligently inflicted death or injury, and as a result suffered emotional injury manifested by physical symptoms." Id. at 796. In Wilder v. City of Keene, 131 N.H. 599 (1989), we refused to expand liability to parents who did not witness the accident but observed their child in extremis at the hospital. We reaffirmed the requirement that plaintiffs be "sufficiently close to the accident scene to experience a sensory perception of the event." Id. at 604. And, in Jarvis v. Prudential Insurance, 122 N.H. 648 (1982), where the plaintiff alleged emotional distress caused by the denial of health insurance benefits to her husband, we held the plaintiff's reliance on Corso was "misplaced." Id. at 653. Our cases, thus, have continued to narrowly construe Corso and, unlike the California Supreme Court, we are not faced with a need to curb bystander liability.

          Notwithstanding this difference, the defendant urges us to construe the third factor of Corso literally. He argues that we should limit the meaning of "closely related" to a dictionary definition: people "connected by consanguinity," WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 1916 (unabridged ed. 1961), or "persons connected by kinship, common origin or marriage." AMERICAN HERITAGE DICTIONARY 1473 (4th ed. 2000).

          Corso, however, did not modify the phrase "closely related" with "by blood or marriage." Corso, 119 N.H. at 654. Rather, "closely related" was "contrasted with an absence [of a] relationship or the presence of only a distant relationship." Id. Corso established only that mental distress suffered by a plaintiff who is closely related is foreseeable and a plaintiff with no relationship is not foreseeable. Id. The defendant's argument, limiting the analysis to a dictionary definition, amounts to a "dry classification [that] puts the emphasis at the wrong place[]." Ouellette v. Blanchard, 116 N.H. 552, 556 (1976) (abandoning distinctions between invitee, licensee and trespasser by adopting traditional negligence principles). The appropriate analysis is not to resort to a dictionary definition but rather to use our traditional analysis of foreseeability.

          In Elden, the California Supreme Court rejected a traditional analysis of foreseeability for three policy reasons: first, the State's strong interest in marriage; second, the potential invasion into an unmarried plaintiff's privacy required to prove a close relationship; and third, the need to limit the class of plaintiffs by a bright line rule. Elden, 758 P.2d at 586-88. We examine each reason in turn.

          First is the State's strong interest in marriage. In Elden, the court stated that "to the extent unmarried cohabitants are granted the same rights as married persons, the state's interest in promoting marriage is 207*207 inhibited." Id. at 586. The court noted the abolition of common law marriage as evidence of the public policy in favor of formal marriage. Id. at 587. Elden found no convincing reason to permit recovery to couples who bear no legal obligations to each other to the same extent as those who undertake such obligations. Id.

          The court in Elden apparently relied upon the dubious assumption that the possibility of recovery in tort litigation is an incentive to marry. Rejecting this assumption, the New Jersey Supreme Court observed that "a person who would not otherwise choose to marry would not be persuaded to do so in order to assure his or her legal standing in a future personal injury action should that person have the misfortune of witnessing the serious injury of his or her spouse." Dunphy, 642 A.2d at 379. The court noted that "[m]arriage will still maintain its preferential status under the law" and that allowing recovery "will not discourage marriage as a worthwhile and desirable relationship or erode society's commitment to the institution of marriage." Id. We agree.

          The second reason relied upon in Elden was the "difficult burden on the courts." Elden, 758 P.2d at 587. Elden reasoned that "[a] determination whether a partner in an unmarried cohabitation relationship may recover damages for emotional distress based on such matters as the sexual fidelity of the parties and their emotional and economic ties would require a court to undertake a massive intrusion into the private life of the partners." Id.

          Again, we agree with the New Jersey Supreme Court, which noted that "[o]ur courts have shown that the sound assessment of the quality of interpersonal relationships is not beyond a jury's ken and that courts are capable of dealing with the realities, not simply the legalities, of relationships to assure that resulting emotional injury is genuine and deserving of compensation." Dunphy, 642 A.2d at 378. Moreover, inquiry into the quality and intimacy of a relationship is often necessary in loss of consortium cases. See, e.g., id. at 378; Labonte v. National Gypsum Co., 113 N.H. 678, 682-83 (1973). Engaging in a similar inquiry in the instant case breaks no new ground.

          Furthermore, the real burden is not on the court but on the plaintiff who chooses to seek recovery for negligent infliction of emotional distress. At the outset, the plaintiff will know that the details of the relationship with the decedent will be examined and that this may involve an intrusion into the plaintiff's private life. The decision to submit to this searching inquiry is the plaintiff's choice and should not be the basis for limiting liability.

          Third, the court in Elden relied upon "the need to limit the number of persons to whom a negligent defendant owes a duty of care." Elden, 758 P.2d at 588. The court noted that "[i]t would be an entirely unreasonable 208*208 burden on all human activity if the defendant who has endangered one man were to be compelled to pay for the lacerated feelings of every other person disturbed by reason of it, including every bystander shocked at an accident, and every distant relative of the person injured, as well as his friends." Id. (quotation omitted). The court stated that the absence of a bright line rule "would result in the unreasonable extension of the scope of liability of a negligent actor." Id. While admitting that the "close emotional ties between unrelated or distantly related persons is often strong" and "the result of injury ... may be as devastating as that suffered by a member of the immediate family," the court concluded that "[t]he problems of multiplication of actions and damages that would result from such an extension of liability would place an intolerable burden on society." Id. (citations and quotations omitted.)

          Rejecting the bright line rule in Elden, however, does not place an intolerable burden upon society or unfair burden upon a negligent defendant. Rather, it allows recovery for an eminently foreseeable class of plaintiffs. This class of plaintiffs is further narrowed by "the other elements of the bystander cause of action, such as contemporaneous observation, death or serious injury to the victim, and severe emotional injury to the plaintiff, [that] structure the kind of `particularized foreseeability' that ensures that the class of plaintiffs is reduced even further and that limitless liability is avoided." Note, supra at 947.

          Elden argued that "[t]he need to draw a bright line in this area of the law is essential" because there is no "principled distinction between an unmarried cohabitant who claims to have a de facto marriage relationship with his partner and de facto siblings, parents, grandparents or children." Elden, 758 P.2d at 588. While this observation is accurate, it fails to consider that there is also no logical distinction between denying recovery to a fiancée who has lived with her betrothed for seven years and allowing recovery to a wife who met and married her husband a week before the accident. See State, Dep't. of Transp. v. Hill, 963 P.2d 480, 483 (Nev. 1998) (characterizing recovery after the wedding, but not beforehand, as "fallacious"). A bright line rule that includes only individuals related by blood or marriage is

overinclusive because it permits recovery when the suffering accompanies a legal or biological link between bystander and victim, regardless of whether the relationship between the two is estranged, alienated, or in some other way removed. Conversely, the [rule] is underinclusive because it arbitrarily denies court 209*209 access to persons with valid claims that they could prove if permitted to do so.

Note, supra at 917.

          More fundamentally, we decline to adopt a bright line rule when a "flexible approach, designed to account for factual nuances" is available. See Quirk v. Town of New Boston, 140 N.H. 124, 131 (1995); see also State v. Reid, 135 N.H. 376 (1992). Foreseeability accounts for factual nuances, while a bright line rule is at odds with foreseeability. This is the rationale of Corso.

          Corso rejected the bright line "zone of danger" rule as a "mechanical rule that does more harm than good." Corso, 119 N.H. at 656 (quotation omitted). Instead, we relied upon the traditional test of foreseeability, observing "that the adoption of well-defined foreseeability factors will not lead to unlimited liability, and that the threat of remote and unexpected liability is not a substantial fear." Id. In this regard, we agree with the New Jersey Supreme Court that the expedience of a bright line rule "does not outweigh the need to recognize claims that are legitimate and just." Dunphy, 642 A.2d at 378. We therefore find unpersuasive the argument in Elden that a bright line rule is necessary.

          We conclude that "to foreclose [an unmarried cohabitant] from making a claim based upon emotional harm because her relationship with the injured person does not carry a particular label is to work a potential injustice ... where the emotional injury is genuine and substantial and is based upon a relationship of significant duration that ... is deep, lasting and genuinely intimate." Id. A number of courts have reached a similar conclusion. See Thurman v. Sellers, 62 S.W.3d 145, 164 (Tenn. Ct. App. 2001)Heldreth v. Marrs, 425 S.E.2d 157, 162-63 (W. Va. 1992)James v. Lieb, 375 N.W.2d 109, 115 (Neb. 1985)Paugh v. Hanks, 451 N.E.2d 759, 766-67 (Ohio 1983)Sinn v. Burd, 404 A.2d 672, 685 (Pa. 1979)Leong v. Takasaki, 520 P.2d 758, 766 (Haw. 1974). See generally, Annotation, 98 A.L.R.5TH 609.

          We thus recognize that unmarried cohabitants may have a close relationship, i.e., a "relationship that is stable, enduring, substantial, and mutually supportive ... cemented by strong emotional bonds and provid[ing] a deep and pervasive emotional security." Dunphy, 642 A.2d at 380. In determining whether a relationship meets this standard, a court should

take into account the duration of the relationship, the degree of mutual dependence, the extent of common contributions to a life together, the extent and quality of shared experience, and ... 210*210 whether the plaintiff and the injured person were members of the same household, their emotional reliance on each other, the particulars of their day to day relationship, and the manner in which they related to each other in attending to life's mundane requirements.

          Id. at 378 (quotation omitted).

          In this case, the plaintiff alleged in her complaint that she was engaged to the decedent and that they had lived together for seven years immediately preceding the accident. Construing all reasonable inferences in the light most favorable to the plaintiff, Minuteman, LLC v. Microsoft Corp., 147 N.H. at 636, we conclude that it is reasonable to infer that in the course of their lengthy cohabitation the plaintiff and her fiancé enjoyed mutual dependence, common contributions to a life together, emotional reliance on each other and attended to life's mundane requirements together. We conclude that the pleadings are reasonably susceptible of a construction that would withstand a motion to dismiss.

          Reversed and remanded.

          BRODERICK and NADEAU, JJ., concurred; DALIANIS, J., with whom BROCK, C.J., joined, dissented.

          DALIANIS, J. dissenting. Because I believe that the class of bystanders who may recover for negligent infliction of emotional distress should be limited to those closely related to the victim by marriage or blood, I respectfully dissent.

          In Corso v. Merrill, 119 N.H. 647 (1979), we abandoned the "zone of danger" standard which barred recovery unless the plaintiff had been exposed to a risk of physical harm, and instead permitted bystander recovery for negligent infliction of emotional distress premised upon a traditional test of foreseeability. Id. at 657. In expanding this cause of action, we recognized the need to permit recovery for a "plaintiff's serious emotional injury that is directly caused by [the] defendant's negligence." Id. at 653. At the same time, however, "we recognized the need for a clearly-defined boundary to liability in this area...." Nutter v. Frisbie Mem. Hosp., 124 N.H. 791, 795 (1984). This necessity arises because the liability of a negligent defendant to a bystander is largely derivative. Id. at 794. "The risks of indirect harm from the loss or injury of loved ones [are] pervasive and inevitably realized at one time or another." Id. (quotation omitted). To recognize liability for all such harms, however, would impose "remote and unexpected liability" upon defendants in bystander cases. See Corso, 119 N.H. at 656. While it is difficult to determine the point at which 211*211 the harm is no longer reasonably foreseeable to a defendant, "[t]he fact that such a boundary is difficult to draw does not obviate the reasons for drawing it." Nutter, 124 N.H. at 795.

          In establishing a clearly-defined boundary to liability, we must balance the need to compensate those plaintiffs whose injuries derive from the defendant's negligence with the need to avoid both infinite liability and uncertainty in the law. See Wilder v. City of Keene, 131 N.H. 599, 603 (1989). Thus, we have narrowly construed the foreseeability factors that we adopted in Corso to achieve this balance by "clearly limiting bystander recovery to those plaintiffs whose injuries were most directly and foreseeably caused by a defendant's negligence." Nutter, 124 N.H. at 795.

          The policy goals of limited liability and certainty of the law cannot be achieved if the class of plaintiffs who may recover is based upon the subjective emotional connection of the parties. Rather, we should narrowly construe the "closely related" factor by limiting recovery with objective standards that clearly define the defendant's liability. See Grotts v. Zahner, 989 P.2d 415, 417 n.6 (Nev. 1999). Accordingly, I would restrict the class of plaintiffs who may recover under this cause of action to those closely related to the victim by the objective criteria of blood or marriage.

          The majority's interpretation of the "closely related" factor is "so ambiguous as to limit the class of plaintiffs who could assert a claim for [negligent infliction of emotional distress] only by the imagination of counsel drafting the pleadings." Lindsey v. Visitec, Inc., 804 F. Supp. 1340, 1344 (W.D. Wash. 1992) (quotation omitted). If the emotional connection between the bystander and the victim determines whether they are "closely related," there is no principled distinction, for example, between an unmarried cohabitant who claims to have a sufficiently "intimate" relationship with the victim and close friends who claim the same intimacy. See Elden v. Sheldon, 758 P.2d 582, 588 (Cal. 1988). I disagree with the New Jersey Supreme Court's holding in Dunphy v. Gregor, 642 A.2d 372, 378 (N.J. 1994), that a standard that "take[s] into account the duration of the relationship, the degree of mutual dependence, the extent of common contributions to a life together, [and] the extent and quality of shared experience" properly confines this cause of action within a well-defined boundary. To the contrary, the "application of these factors would not provide a sufficiently definite and predictable test to allow for consistent application from case to case." Elden, 758 P.2d at 587; see also Nutter, 124 N.H. at 795 (recognizing the need to avoid uncertainty in the law).

          If the class of potential plaintiffs who may recover is extended beyond those closely related to the victim by blood or marriage, courts will face difficult problems of proof in determining whether the relationship is sufficiently close to permit recovery. See Elden, 758 P.2d at 587. Under the 212*212 majority's holding, courts will be compelled to define and make findings about the subjective emotional connection between the parties in an attempt to determine whether the plaintiffs emotional trauma was reasonably foreseeable to the defendant. Adopting such a standard will extend this cause of action beyond that contemplated by Corso.

          Thus, I would not expand the class of potential plaintiffs beyond those closely related to the victim by the objective criteria of marriage or blood. While I recognize that "[s]uch limitations are indisputably arbitrary since it is foreseeable that in some cases unrelated persons have a relationship to the victim or are so affected by the traumatic event that they suffer equivalent emotional distress," Thing v. La Chusa, 771 P.2d 814, 828 (Cal. 1989), defining the class of "closely related" bystanders by the depth of their emotional connection to the victim would unreasonably expand the defendant's liability. See Elden, 758 P.2d at 588.

          The majority declines to adopt a bright line rule in favor of a "flexible approach" to account for "factual nuances." I fail to see how adopting a bright line rule here is any different from the bright line rule that we have followed with regard to the contemporaneous observation factor. We have denied recovery to parents who viewed their deceased child in the hospital after the accident, see Nutter, 124 N.H. at 795-96, and to parents who observed their child in extremis within one hour of the accident, see Wilder, 131 N.H. at 603-04. We did so, not because we deemed the parents' emotional trauma unforeseeable to the defendant, but rather as a means of reasonably limiting the defendant's liability. See Wilder, 131 N.H. at 604Nutter, 124 N.H. at 795-96.

          We have heretofore avoided expanding the scope of bystander liability. We have done so by narrowly construing the Corso factors and by establishing clearly defined boundaries to the cause of action. I see no reason to depart from this practice, and, therefore, I would affirm.

BROCK, C.J., joins in the dissent.

18.2 Economic Injury 18.2 Economic Injury

          Why does the law treat purely economic harms differently from other types of injury? First, a definition is in order. Purely economic harms usually include financial losses unrelated to damage to the plaintiff's physical property or person. Are these injuries harder to prove or easier to fabricate? More likely to lead to limitless liability? Less foreseeable?

18.2.1 People Express Airlines, Inc. v. Consolidated Rail Corp. 18.2.1 People Express Airlines, Inc. v. Consolidated Rail Corp.

100 N.J. 246
495 A.2d 107, 65 A.L.R.4th 1105, 54
USLW 2079

PEOPLE EXPRESS AIRLINES, INC., Plaintiff-Respondent,

v.

CONSOLIDATED RAIL CORPORATION, A New Jersey Corporation; BASF Wyandotte Company, A New Jersey Corporation; and Union Tank Car Company, A Delaware Corporation, Defendants-Appellants.

Supreme Court of New Jersey.
Argued April 22, 1985.
Decided July 26, 1985.

[100 N.J. 248] [495 A.2d 108] Louis A. Ruprecht, Millburn, for appellant Consol. Rail Corp. (McDermott, McGee & Ruprecht, Millburn, attorneys).

John C. Heavey, Newark, for appellant Union Tank Car Co. (Carpenter, Bennett & Morrissey, Newark, attorneys; Thomas M. Moore, Newark, on the brief).

Dennis M. Cavanaugh, Newark, for appellant BASF Wyandotte Co. (Tompkins, McGuire & Wachenfeld, Newark, attorneys).

Raymond P. D'Uva, Roseland, for respondent (Rodino, Forman & D'Uva, Roseland, attorneys; Raymond P. D'Uva and Mary Ann Dubiel, Roseland, on the brief).

The opinion of the Court was delivered by

HANDLER, J.

This appeal presents a question that has not previously been directly considered: whether a defendant's negligent conduct that interferes with a plaintiff's business resulting in purely economic losses, unaccompanied by property damage or personal injury, is compensable in tort. The appeal poses this issue in the context of the defendants' alleged negligence that caused a dangerous chemical to escape from a railway tank car, resulting in the evacuation from the surrounding area of persons whose safety and health were threatened. The plaintiff, a commercial airline, was forced to evacuate its premises and [100 N.J. 249] suffered an interruption of its business operations with resultant economic losses.

I.

Because of the posture of the case--an appeal taken from the grant of summary judgment for the defendant railroad, subsequently reversed by the Appellate Division, 194 N.J.Super. 349, 476 A.2d 1256 (App.Div.1984)--we must accept plaintiff's version of the facts as alleged. The facts are straight-forward.

On July 22, 1981, a fire began in the Port Newark freight yard of defendant Consolidated Rail Corporation (Conrail) when ethylene oxide manufactured by defendant BASF Wyandotte Company (BASF) escaped from a tank car, punctured during a "coupling" operation with another rail car, and ignited. The tank car was owned by defendant Union Tank Car Company (Union Car) and was leased to defendant BASF.

The plaintiff asserted at oral argument that at least some of the defendants were aware from prior experiences that ethylene oxide is a highly volatile substance; further, that emergency response plans in case of an accident had been prepared. When the fire occurred that gave rise to this lawsuit, some of the defendants' consultants helped determine how much of the surrounding area to evacuate. The municipal authorities then evacuated the area within a one-mile radius surrounding the fire to lessen the risk to persons within the area should the burning tank car explode. The evacuation area included the adjacent North Terminal building of Newark International Airport, where plaintiff People Express Airlines' (People Express) business operations are based. Although the feared explosion never occurred, People Express employees were prohibited from using the North Terminal for twelve hours.

The plaintiff contends that it suffered business-interruption losses as a result of the evacuation. These losses consist of cancelled scheduled flights and lost reservations because employees were unable to answer the telephones to accept bookings; [100 N.J. 250] also, certain fixed operating expenses allocable to the evacuation time period were [495 A.2d 109] incurred and paid despite the fact that plaintiff's offices were closed. No physical damage to airline property and no personal injury occurred as a result of the fire.

According to People Express' original complaint, each defendant acted negligently and these acts of negligence proximately caused the plaintiff's harm. An amended complaint alleged additional counts of nuisance and strict liability based on the defendants' undertaking an abnormally dangerous activity, as well as defective manufacture or design of the tank car, causes of action with which we are not concerned here. Defendants filed answers and cross-claims for contribution pursuant to the Joint Tortfeasors Contribution Law, N.J.S.A. 2A:53A-1 to -6.

Conrail moved for summary judgment, seeking dismissal of the complaint and cross-claims against it; the motion was opposed by plaintiff, People Express, and defendants BASF and Union Car. The trial court granted Conrail's summary judgment motion on the ground that absent property damage or personal injury economic loss was not recoverable in tort. Defendants BASF and Union Car subsequently sought summary judgment dismissing the complaint; the trial court also granted these motions based on the same reasoning.

The Appellate Division granted plaintiff's interlocutory request for leave to appeal and reversed the trial court's order granting summary judgment. The Appellate Division held that recovery of negligently caused economic losses was not automatically barred by the absence of property damage and that summary judgment was inappropriate. 194 N.J.Super. at 355-56, 476 A.2d 1256. The cause was remanded to the trial court with instructions to determine whether the evidence could support the finding of a foreseeable risk of harm to the plaintiff. This Court granted defendant Union Car's petition for certification, in which Conrail and BASF joined, and denied People Express' [100 N.J. 251] motion to dismiss the petition for certification. 99 N.J. 169, 170, 491 A.2d 678 (1984).

II.

The single characteristic that distinguishes parties in negligence suits whose claims for economic losses have been regularly denied by American and English courts from those who have recovered economic losses is, with respect to the successful claimants, the fortuitous occurrence of physical harm or property damage, however slight. It is well-accepted that a defendant who negligently injures a plaintiff or his property may be liable for all proximately caused harm, including economic losses. See Palsgraf v. Long Island R.R., 248 N.Y. 339, 162 N.E. 99 (1928); W. Prosser & W. Keeton, The Law of Torts § 129, at 997 (5th ed. 1984) (Prosser & Keeton). Nevertheless, a virtually per se rule barring recovery for economic loss unless the negligent conduct also caused physical harm has evolved throughout this century, based, in part, on Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed.2d 290 (1927) and Cattle v. Stockton Waterworks Co., 10 Q.B. 453 (1875). This has occurred although neither case created a rule absolutely disallowing recovery in such circumstances.[1] See, e.g., Stevenson v. East Ohio Gas Co., 73 N.E.2d 200 (Ohio Ct.App.1946) (employee who was prohibited from working at his plant, which was closed due to conflagration begun by negligent rupture of stored liquified natural gas at nearby utility, could not recover lost wages); Byrd v. English, 117 Ga. 191, 43 S.E. 419 (1903) (plaintiff who owned printing plant could not recover lost profits when defendant negligently damaged utility's electrical conduits that supplied [100 N.J. 252] power to the plant); see also Restatement (Second) of Torts § 766C (1979) (positing rule of nonrecovery for purely economic losses [495 A.2d 110] absent physical harm). But see In re Kinsman Transit Co., 388 F.2d 821, 824 (2d Cir.1968) (after rejecting an inflexible rule of nonrecovery, court applied traditional proximate cause analysis to claim for purely economic losses).

The reasons that have been advanced to explain the divergent results for litigants seeking economic losses are varied. Some courts have viewed the general rule against recovery as necessary to limit damages to reasonably foreseeable consequences of negligent conduct. This concern in a given case is often manifested as an issue of causation and has led to the requirement of physical harm as an element of proximate cause. In this context, the physical harm requirement functions as part of the definition of the causal relationship between the defendant's negligent act and the plaintiff's economic damages; it acts as a convenient clamp on otherwise boundless liability. See Union Oil Co. v. Oppen, 501 F.2d 558, 563 (9th Cir.1974); The Federal No. 2, 21 F.2d 313 (2d Cir.1927); Byrd v. English, supra, 117 Ga. 191, 43 S.E. 419 (1903). The physical harm rule also reflects certain deep-seated concerns that underlie courts' denial of recovery for purely economic losses occasioned by a defendant's negligence. These concerns include the fear of fraudulent claims, mass litigation, and limitless liability, or liability out of proportion to the defendant's fault. See In re Kinsman Transit Co., supra, 388 F.2d at 823; Weller & Co. v. Foot & Mouth Disease Research Inst. [1966], 1 Q.B. 569, 577; Stevenson v. East Ohio Gas Co., supra, 73 N.E.2d at 203.

The assertion of unbounded liability is not unique to cases involving negligently caused economic loss without physical harm. Even in negligence suits in which plaintiffs have sustained physical harm, the courts have recognized that a tortfeasor is not necessarily liable for all consequences of his conduct. While a lone act can cause a finite amount of physical harm, that harm may be great and very remote in its final [100 N.J. 253] consequences. A single overturned lantern may burn Chicago. Some limitation is required; that limitation is the rule that a tortfeasor is liable only for that harm that he proximately caused. Proximate or legal cause has traditionally functioned to limit liability for negligent conduct. Duty has also been narrowly defined to limit liability. Compare the majority and dissenting opinions in Palsgraf v. Long Island R.R., supra, 248 N.Y. 339, 162 N.E. 99. Thus, we proceed from the premise that principles of duty and proximate cause are instrumental in limiting the amount of litigation and extent of liability in cases in which no physical harm occurs just as they are in cases involving physical injury.

Countervailing considerations of fairness and public policy have led courts to discard the requirement of physical harm as an element in defining proximate cause to overcome the problem of fraudulent or indefinite claims. See Portee v. Jaffee, 84 N.J. 88, 417 A.2d 521 (1980); Dillon v. Legg, 68 Cal.2d 728, 69 Cal.Rptr. 72, 441 P.2d 912 (1968) (abandoning zone of danger rule in favor of a foreseeability test to determine whether the plaintiff may recover for mental distress arising from physical harm to another). In this context, see, e.g., Portee v. Jaffee, supra, as well as in variant settings, see Merenoff v. Merenoff, 76 N.J. 535, 388 A.2d 951 (1978), we have subordinated the threat of potential baseless claims to the right of an aggrieved individual to pursue a just and fair claim for redress attributable to the wrongdoing of another. The asserted inability to define damages in cases arising under the cause of action for negligent infliction of emotional distress absent impact or near-impact has not hindered adjudication of those claims. Nor is there any indication that unfair awards have resulted.

The troublesome concern reflected in cases denying recovery for negligently-caused economic loss is the alleged potential for infinite liability, or liability out of all proportion to the defendant's fault. This objection is also not confined to negligently-caused economic injury. See infra [495 A.2d 111] at 110. The same objection has been asserted and, ultimately, rejected by this [100 N.J. 254] Court and others in allowing recovery for other forms of negligent torts, see H. Rosenblum, Inc. v. Adler, 93 N.J. 324, 461 A.2d 138 (1983), and in the creation of the doctrine of strict liability for defective products, see Feldman v. Lederle Laboratories, 97 N.J. 429, 479 A.2d 374 (1984); Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69 (1960), and ultrahazardous activities, see State, Dep't of Envtl. Protection v. Ventron Corp., 94 N.J. 473, 468 A.2d 150 (1983). See also Carpenter, "Interference With Contract Relations," 41 Harv.L.Rev. 728, 742 (1928) (noting that most advances in tort law have been attended by reluctance to take the step forward). The answer to the allegation of unchecked liability is not the judicial obstruction of a fairly grounded claim for redress. Rather, it must be a more sedulous application of traditional concepts of duty and proximate causation to the facts of each case. See Soler v. Castmaster, Div. of H.P.M. Corp., 98 N.J. 137, 484 A.2d 1225 (1984).

It is understandable that courts, fearing that if even one deserving plaintiff suffering purely economic loss were allowed to recover, all such plaintiffs could recover, have anchored their rulings to the physical harm requirement. While the rationale is understandable, it supports only a limitation on, not a denial of, liability. The physical harm requirement capriciously showers compensation along the path of physical destruction, regardless of the status or circumstances of individual claimants. Purely economic losses are borne by innocent victims, who may not be able to absorb their losses. See Comment, 88 Harv.L.Rev. 444, 449-50 (1974). In the end, the challenge is to fashion a rule that limits liability but permits adjudication of meritorious claims. The asserted inability to fix chrystalline formulae for recovery on the differing facts of future cases simply does not justify the wholesale rejection of recovery in all cases.

Further, judicial reluctance to allow recovery for purely economic losses is discordant with contemporary tort doctrine. The torts process, like the law itself, is a human institution designed to accomplish certain social objectives. One objective is to ensure that innocent victims have avenues of legal redress, [100 N.J. 255] absent a contrary, overriding public policy. See Kelly v. Gwinnell, 96 N.J. 538, 476 A.2d 1219 (1984); Evers v. Dollinger, 95 N.J. 399, 471 A.2d 405 (1984); Costa v. Josey, 83 N.J. 49, 415 A.2d 337 (1980); Berman v. Allan, 80 N.J. 421, 404 A.2d 8 (1979); Immer v. Risko, 56 N.J. 482, 267 A.2d 481 (1970); Henningsen v. Bloomfield Motors, Inc., supra, 32 N.J. 358, 161 A.2d 69. This reflects the overarching purpose of tort law: that wronged persons should be compensated for their injuries and that those responsible for the wrong should bear the cost of their tortious conduct.

Other policies underlie this fundamental purpose. Imposing liability on defendants for their negligent conduct discourages others from similar tortious behavior, fosters safer products to aid our daily tasks, vindicates reasonable conduct that has regard for the safety of others, and, ultimately, shifts the risk of loss and associated costs of dangerous activities to those who should be and are best able to bear them. Although these policies may be unevenly reflected or imperfectly articulated in any particular case, we strive to ensure that the application of negligence doctrine advances the fundamental purpose of tort law and does not unnecessarily or arbitrarily foreclose redress based on formalisms or technicalisms. Whatever the original common law justifications for the physical harm rule, contemporary tort and negligence doctrine allow--indeed, impel--a more thorough consideration and searching analysis of underlying policies to determine whether a particular defendant may be liable for a plaintiff's economic losses despite the absence of any attendant physical harm. See State v. Culver, 23 N.J. 495, 505, 129 A.2d 715, cert. den., 354 U.S. 925, 77 S.Ct. 1387, 1 L.Ed.2d 1441 (1957); see also Renz v. [495 A.2d 112] Penn Central Corp., 87 N.J. 437, 435 A.2d 540 (1981) (railroad immunity act's imputation of contributory negligence to minor injured while playing on railroad did not constitute absolute bar to recovery but was to be construed as a common law issue bearing on comparative fault).

III.

We may appropriately consider two relevant avenues of analysis in defining a cause of action for negligently-caused economic [100 N.J. 256] loss. The first examines the evolution of various exceptions to the rule of nonrecovery for purely economic losses, and suggests that the exceptions have cast considerable doubt on the validity of the current rule and, indeed, have laid the foundation for a rule that would allow recovery. The second explores the elements of a suitable rule and adopts the traditional approach of foreseeability as it relates to duty and proximate cause molded to circumstances involving a claim only for negligently-caused economic injury.

A.

Judicial discomfiture with the rule of nonrecovery for purely economic loss throughout the last several decades has led to numerous exceptions in the general rule. Although the rationalizations for these exceptions differ among courts and cases, two common threads run throughout the exceptions. The first is that the element of foreseeability emerges as a more appropriate analytical standard to determine the question of liability than a per se prohibitory rule. The second is that the extent to which the defendant knew or should have known the particular consequences of his negligence, including the economic loss of a particularly foreseeable plaintiff, is dispositive of the issues of duty and fault.

One group of exceptions is based on the "special relationship" between the tortfeasor and the individual or business deprived of economic expectations. Many of these cases are recognized as involving the tort of negligent misrepresentation, resulting in liability for specially foreseeable economic losses. Importantly, the cases do not involve a breach of contract claim between parties in privity; rather, they involve tort claims by innocent third parties who suffered purely economic losses at the hands of negligent defendants with whom no direct relationship existed. Courts have justified their finding of liability in these negligence cases based on notions of a special relationship between the negligent tortfeasors and the foreseeable plaintiffs [100 N.J. 257] who relied on the quality of defendants' work or services, to their detriment. The special relationship, in reality, is an expression of the courts' satisfaction that a duty of care existed because the plaintiffs were particularly foreseeable and the injury was proximately caused by the defendant's negligence.

The special relationship exception has been extended to auditors, see H. Rosenblum, Inc. v. Adler, supra, 93 N.J. 324, 461 A.2d 138 (independent auditor whose negligence resulted in inaccurate public financial statement held liable to plaintiff who bought stock in company for purposes of sale of business to company; stock subsequently proved to be worthless); surveyors, see Rozny v. Marnul, 43 Ill.2d 54, 250 N.E.2d 656 (1969) (surveyor whose negligence resulted in error in depicting boundary of lot held liable to remote purchaser); termite inspectors, see Hardy v. Carmichael, 207 Cal.App.2d 218, 24 Cal.Rptr. 475 (Cal.Ct.App.1962) (termite inspectors whose negligence resulted in purchase of infested home liable to out-of-privity buyers); engineers, see M. Miller Co. v. Central Contra Costa Sanitary Dist., 198 Cal.App.2d 305, 18 Cal.Rptr. 13 (Cal.Ct.App.1961) (engineers whose negligence resulted in successful bidder's losses in performing construction contract held liable); attorneys, see Lucas v. Hamm, 56 Cal.2d 583, 15 Cal.Rptr. 821, 364 P.2d 685 (1961), cert. den., 368 U.S. 987, 82 S.Ct. 603, 7 L.Ed.2d 525 (1962) (attorney whose negligence caused intended beneficiary to be deprived of proceeds of the will was liable to beneficiary); [495 A.2d 113] notaries public, see Immerman v. Ostertag, 83 N.J.Super. 364, 199 A.2d 869 (Law Div.1964); Biakanja v. Irving, 49 Cal.2d 647, 320 P.2d 16 (1958) (notaries public whose negligence caused out-of-privity mortgagee and intended beneficiary of will, respectively, to be deprived of expected proceeds held liable); architects, see United States v. Rogers & Rogers, 161 F.Supp. 132 (S.D.Cal.1958) (architects whose negligence resulted in use of defective concrete liable to out-of-privity prime contractor); weighers, see Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275 (1922) (public weigher whose negligence caused remote buyer's losses was liable for loss); and telegraph companies, [100 N.J. 258] see Western Union Tel. Co. v. Mathis, 215 Ala. 282, 110 So. 399 (1926) (telegraph company whose negligent transmission caused plaintiff not to obtain contract was liable); see also W. Prosser, The Law of Torts § 107, at 705 (4th ed. 1971); Restatement (Second) of Torts § 552 (1977) (positing recovery for negligent misrepresentation). Cf. Strauss v. Belle Realty Co., 65 N.Y.2d 399, 492 N.Y.S.2d 555, 482 N.E.2d 34 (1985); Food Pageant, Inc. v. Consolidated Edison Co., 54 N.Y.2d 167, 445 N.Y.S.2d 60, 429 N.E.2d 738 (1981); Newlin v. New England Tel. & Tel. Co., 316 Mass. 234, 54 N.E.2d 929 (1944) (although some physical harm occurred in each case due to utility blackout, plaintiffs recovered economic losses either in negligence or as third party beneficiaries of contract for electricity).

A related exception in which courts have allowed recovery for purely economic losses has been extended to plaintiffs belonging to a particularly foreseeable group, such as sailors and seamen, for whom the law has traditionally shown great solicitude. See Carbone v. Ursich, 209 F.2d 178 (9th Cir.1953) (plaintiff seaman recovered lost wages resulting from lack of work while the ship on which they were employed, damaged through defendant's negligence, was being repaired); accord Main v. Leask, Sess.Cas. 772 (Scot.2d Div.1910) (by implication).

Courts have found it fair and just in all of these exceptional cases to impose liability on defendants who, by virtue of their special activities, professional training or other unique preparation for their work, had particular knowledge or reason to know that others, such as the intended beneficiaries of wills (e.g., Lucas v. Hamm, supra) or the purchasers of stock who were expected to rely on the company's financial statement in the prospectus (e.g., H. Rosenblum, Inc. v. Adler, supra), would be economically harmed by negligent conduct. In this group of cases, even though the particular plaintiff was not always foreseeable, the particular class of plaintiffs was foreseeable as was the particular type of injury.

[100 N.J. 259] A very solid exception allowing recovery for economic losses has also been created in cases akin to private actions for public nuisance. Where a plaintiff's business is based in part upon the exercise of a public right, the plaintiff has been able to recover purely economic losses caused by a defendant's negligence. See, e.g., Louisiana ex rel. Guste v. M/V Testbank, 752 F.2d 1019 (5th Cir.1985) (en banc) (defendants responsible for ship collision held liable to all commercial fishermen, shrimpers, crabbers and oystermen for resulting pollution of Mississippi River); Union Oil Co. v. Oppen, 501 F.2d 558 (9th Cir.1974) (fishermen making known commercial use of public waters may recover economic losses due to defendant's oil spill); Masonite Corp. v. Steede, 198 Miss. 530, 23 So.2d 756 (1945) (en banc) (operator of fishing resort may recover lost profits due to pollution); Hampton v. North Carolina Pulp Co., 223 N.C. 535, 27 S.E.2d 538 (1943) (polluter liable for economic losses of downstream riparian landowners); Columbia River Fishermen's Protective Union v. City of St. Helens, 160 Or. 654, 87 P.2d 195 (1939) (same as Union Oil Co., supra); see also Burgess v. M/V Tamano, 370 F.Supp. 247 (D.Me.1973) (on nuisance theory, commercial fisherman may recover lost profits due [495 A.2d 114] to oil spill).[2] Cf. Birchwood Lakes Colony Club v. Borough [100 N.J. 260] of Medford Lakes, 90 N.J. 582, 449 A.2d 472 (1982) (residents whose use of lakeside properties was diminished by pollution from defendant's sewage treatment plant could sue for compensatory damages on nuisance theory). The theory running throughout these cases, in which the plaintiffs depend on the exercise of the public or riparian right to clean water as a natural resource, is that the pecuniary losses suffered by those who make direct use of the resource are particularly foreseeable because they are so closely linked, through the resource, to the defendants' behavior.[3]

Particular knowledge of the economic consequences has sufficed to establish duty and proximate cause in contexts other than those already considered. In Henry Clay v. Jersey City, 74 N.J.Super. 490, 181 A.2d 545 (Ch.Div.1962), aff'd, 84 N.J.Super. 9, 200 A.2d 787 (App.Div.1964), for example, a lessee-manufacturer had to vacate the building in which its business was located because of the defendant city's negligent failure to maintain its sewer line while the line was repaired. While there was some property [100 N.J. 261] damage, the court treated the tenant's and owner's claims separately; the tenant's claims were purely economic, stemming from the loss of use of its property right, as in the instant case. Further, the city had had notice of the leak since 1957 and should have known about it even earlier. Duty, breach and proximate cause were found to exist; the plaintiff-tenant recovered lost profits and expenses incurred during the shut-down. See also J'Aire Corp. v. Gregory, 24 Cal.3d 799, 157 Cal.Rptr. 407, 598 P.2d 60 (1979) (contractor who undertook construction work for owner of building had duty to tenants to complete construction on time to avoid resultant economic losses).

These exceptions expose the hopeless artificiality of the per se rule against recovery for purely economic losses. When the plaintiffs are reasonably foreseeable, the injury is directly and proximately caused by defendant's negligence, and liability can be limited fairly, courts have endeavored to [495 A.2d 115] create exceptions to allow recovery. The scope and number of exceptions, while independently justified on various grounds, have nonetheless created lasting doubt as to the wisdom of the per se rule of nonrecovery for purely economic losses.[4] Indeed, it has been [100 N.J. 262] fashionable for commentators to state that the rule has been giving way for nearly fifty years, although the cases have not always kept pace with the hypothesis. See Harvey, "Economic Losses and Negligence, the Search for a Just Solution," 50 Can.Bar.Rev. 580 (1972); Harper, "Interference with Contractual Relations," 47 Nw.U.L.Rev. 873 (1953), in 1 F. Harper & F. James, Torts, § 6.5, at 490 (1956); Carpenter, supra, "Interference with Contractual Relations," 41 Harv.L.Rev. 728; Note, "Negligent Interference with Contract: Knowledge As a Standard for Recovery," 63 Va.L.Rev. 813 (1977); Note, "Negligent Interference with Economic Expectancy: The Case for Recovery," 16 Stan.L.Rev. 664 (1964); Comment, "Foreseeability of Third Party Economic Injuries--A Problem in Analysis," 20 U.Chi.L.Rev. 283 (1953).

One thematic motif that may be extrapolated from these decisions to differentiate between those cases in which recovery for economic losses was allowed and denied is that of foreseeability as it relates to both the duty owed and proximate cause. The traditional test of negligence is what a reasonably prudent person would foresee and do in the circumstances; duty is clearly defined by knowledge of the risk of harm or the reasonable apprehension of that risk. In the above-cited cases, the defendants knew or reasonably should have foreseen both that particular plaintiffs or an identifiable class of plaintiffs were at risk and that ascertainable economic damages would ensue from the conduct. Thus, knowledge or special reason to know of the consequences of the tortious conduct in terms of the persons likely to be victimized and the nature of the damages likely to be suffered will suffice to impose a duty upon the tortfeasor not to interfere with economic well-being of third parties. See W. Prosser, supra, The Law of Torts § 129, at 941 ("The limitation of specifically foreseeable plaintiffs ... suggest[s] [100 N.J. 263] an ultimate solution to the problem" [of whether negligent interference with economic expectation absent physical harm should be compensable].).

The further theme that may be extracted from these decisions rests on the specificity and strictness that are infused into the definitional standard of foreseeability. The foreseeability standard that may be synthesized from these cases is one that posits liability in terms of where, along a spectrum ranging from the general to the particular, foreseeability is ultimately found. See W. Prosser, supra, The Law of Torts § 129, at 941; Note, supra, 63 Va.L.Rev. at 818; Comment, supra, 20 U.Chi.L.Rev. at 293. A broad view of these cases reasonably permits the conclusion that the extent of liability and degree of foreseeability [495 A.2d 116] stand in direct proportion to one another. The more particular is the foreseeability that economic loss will be suffered by the plaintiff as a result of defendant's negligence, the more just is it that liability be imposed and recovery allowed.

We hold therefore that a defendant owes a duty of care to take reasonable measures to avoid the risk of causing economic damages, aside from physical injury, to particular plaintiffs or plaintiffs comprising an identifiable class with respect to whom defendant knows or has reason to know are likely to suffer such damages from its conduct. A defendant failing to adhere to this duty of care may be found liable for such economic damages proximately caused by its breach of duty.

We stress that an identifiable class of plaintiffs is not simply a foreseeable class of plaintiffs. For example, members of the general public, or invitees such as sales and service persons at a particular plaintiff's business premises, or persons travelling on a highway near the scene of a negligently-caused accident, such as the one at bar, who are delayed in the conduct of their affairs and suffer varied economic losses, are certainly a foreseeable class of plaintiffs. Yet their presence within the area would be fortuitous, and the particular type of economic [100 N.J. 264] injury that could be suffered by such persons would be hopelessly unpredictable and not realistically foreseeable. Thus, the class itself would not be sufficiently ascertainable. An identifiable class of plaintiffs must be particularly foreseeable in terms of the type of persons or entities comprising the class, the certainty or predictability of their presence, the approximate numbers of those in the class, as well as the type of economic expectations disrupted. See Henry Clay v. Jersey City, supra, 74 N.J.Super. at 497-501, 181 A.2d 545. See also Strauss v. Belle Realty Co., supra, 65 N.Y.2d 399, 492 N.Y.S.2d 555, 482 N.E.2d 34 (tenants of building harmed by utility blackout comprise defined, limited, known class).

We recognize that some cases will present circumstances that defy the categorization here devised to circumscribe a defendant's orbit of duty, limit otherwise boundless liability and define an identifiable class of plaintiffs that may recover. In these cases, the courts will be required to draw upon notions of fairness, common sense and morality to fix the line limiting liability as a matter of public policy, rather than an uncritical application of the principle of particular foreseeability. See Rickards v. Sun Oil Co., 23 N.J.Misc. 89, 41 A.2d 267 (Sup.Ct.1945); Byrd v. English, supra, 117 Ga. 191, 43 S.E. 419.

B.

Liability depends not only on the breach of a standard of care but also on a proximate causal relationship between the breach of the duty of care and resultant losses. Proximate or legal causation is that combination of " 'logic, common sense, justice, policy and precedent' " that fixes a point in a chain of events, some foreseeable and some unforeseeable, beyond which the law will bar recovery. Caputzal v. Lindsay Co., 48 N.J. 69, 77-78, 222 A.2d 513 (1966), (quoting Powers v. Standard Oil Co., 98 N.J.L. 730, 734, 119 A. 273 (Sup.Ct.1923), aff'd o.b., 98 N.J.L. 893, 121 A. 926 (E. & A. 1923); see also Palsgraf v. Long Island R.R., supra, 248 N.Y. at 350, 162 N.E. at 103 (Andrews, J., dissenting). The standard of [100 N.J. 265] particular foreseeability may be successfully employed to determine whether the economic injury was proximately caused, i.e., whether the particular harm that occurred is compensable, just as it informs the question whether a duty exists. See Hill v. Yaskin, 75 N.J. 139, 143, 380 A.2d 1107 (1977) (citing L. Green, Rationale of Proximate Cause 82-83 (1927)).

Although not expressly eschewing the general rule against recovery for purely economic losses, our courts have employed a traditional proximate cause analysis in order to decide whether particular claimants may survive motions for summary [495 A.2d 117] judgment. These cases embody a distinction between those economic losses that are only generally foreseeable, and thus non-compensable, and those losses the defendant is in a position particularly to foresee. In Henry Clay v. Jersey City, supra, 74 N.J.Super. 490, 181 A.2d 545, the court determined that the plaintiff-tenant's economic losses arising from the defendant city's failure to maintain its sewer line were directly and proximately caused by the defendant's negligence. There were no intervening causes, unlike Kinsman Transit Co., supra, 388 F.2d at 822.[5] The economic injury was close in time and space; the defendant had ample opportunity to ascertain the identity and nature of the plaintiff's interests. Further, the amount of litigation and extent of liability was finite, rather than expansive. These are the kinds of considerations that converge in the determination whether economic losses are particularly foreseeable and proximate.

[100 N.J. 266] In two other cases, Rickards v. Sun Oil Co., supra, 23 N.J.Misc. 89, 41 A.2d 267, and Dale v. Grant, 34 N.J.L. 142 (Sup.Ct.1870), our courts again applied proximate cause principles to determine whether the plaintiffs could recover purely economic losses, and found that liability was unjustified. In Rickards, supra, the defendant's barge negligently destroyed a bridge that was the only means of access to six plaintiffs' retail businesses. In denying relief to these plaintiffs for recovery of "losses from expectant gains," 23 N.J.Misc. at 91, 41 A.2d 267, the court noted that principles of proximate cause applied to cases sounding in negligence and nuisance and that each case stood on its own facts. See Rickards, supra, 23 N.J.Misc. at 93, 41 A.2d 267. Recovery was denied because "[n]o ordinary prudent person could reasonably have been expected to have foreseen the resultant injurious consequences * * *." Id. at 95, 41 A.2d 267. This result may be explained in terms of the disproportionate extent of liability, which could not have been anticipated, and that the economic losses, while generally foreseeable, did not suffice to establish the requisite knowledge or particular foreseeability for recovery. In Dale v. Grant, supra, the court also applied traditional proximate cause principles to deny recovery to a plaintiff claiming lost profits. In that case, however, the interference with contractual relations was intentional, but that tort was not yet widely recognized as compensable. See Dale, supra, 34 N.J.L. at 149.

The particular-general foreseeability axis is also accordant with the policies underlying tort law. For good reason, tortfeasors are liable only for the results falling within the foreseeable risks of their negligent conduct. Assigning liability for harm that fortuitously extends beyond the foreseeable risk of negligent conduct unfairly punishes the tortfeasor for harm that he could not have anticipated and taken precautions to avoid. This comports with an underlying policy of the negligence doctrine: the imposition of liability should deter negligent conduct by creating incentives to minimize the risks and costs of accidents. See Note, supra, 63 Va.L.Rev. at 815. The [100 N.J. 267] imposition of liability for unforeseeable risks cannot serve to deter the conduct that has eventuated in attenuated results, but instead arbitrarily assigns liability unrelated or out of proportion to the defendant's fault. If negligence is the failure to take precautions that cost less than the damage wrought by the ensuing accident, see United States v. Carroll Towing Co., 159 F.2d [495 A.2d 118] 169, 173, reh. den., 160 F.2d 482 (2d Cir.1947), it would be unfair and socially inefficient to assign liability for harm that no reasonably-undertaken precaution could have avoided. Cf. Soler v. Castmaster, Div. of H.P.M. Corp., supra, 98 N.J. 137, 484 A.2d 1225; Brown v. United States Stove Co., 98 N.J. 155, 484 A.2d 1234 (1984); Campos v. Firestone Tire & Rubber Co., 98 N.J. 198, 485 A.2d 305 (1984) (employing objective-subjective foreseeability in product liability context).

We conclude therefore that a defendant who has breached his duty of care to avoid the risk of economic injury to particularly foreseeable plaintiffs may be held liable for actual economic losses that are proximately caused by its breach of duty. In this context, those economic losses are recoverable as damages when they are the natural and probable consequence of a defendant's negligence in the sense that they are reasonably to be anticipated in view of defendant's capacity to have foreseen that the particular plaintiff or identifiable class of plaintiffs, as defined infra at 263-64, is demonstrably within the risk created by defendant's negligence.

III.

We are satisfied that our holding today is fully applicable to the facts that we have considered on this appeal. Plaintiff has set forth a cause of action under our decision, and it is entitled to have the matter proceed to a plenary trial. Among the facts that persuade us that a cause of action has been established is the close proximity of the North Terminal and People Express Airlines to the Conrail freight yard; the obvious nature of the plaintiff's operations and particular foreseeability of economic losses resulting from an accident and evacuation; the defendants' actual or constructive knowledge of the [100 N.J. 268] volatile properties of ethylene oxide; and the existence of an emergency response plan prepared by some of the defendants (alluded to in the course of oral argument), which apparently called for the nearby area to be evacuated to avoid the risk of harm in case of an explosion. We do not mean to suggest by our recitation of these facts that actual knowledge of the eventual economic losses is necessary to the cause of action; rather, particular foreseeability will suffice. The plaintiff still faces a difficult task in proving damages, particularly lost profits, to the degree of certainty required in other negligence cases. The trial court's examination of these proofs must be exacting to ensure that damages recovered are those reasonably to have been anticipated in view of the defendants' capacity to have foreseen that this particular plaintiff was within the risk created by their negligence.

We appreciate that there will arise many similar cases that cannot be resolved by our decision today. The cause of action we recognize, however, is one that most appropriately should be allowed to evolve on a case-by-case basis in the context of actual adjudications. See Merenoff v. Merenoff, supra, 76 N.J. at 557, 388 A.2d 951. We perceive no reason, however, why our decision today should be applied only prospectively. See Darrow v. Hanover Tp., 58 N.J. 410, 415, 278 A.2d 200 (1971). Our holdings are well grounded in traditional tort principles and flow from well-established exceptional cases that are philosophically compatible with this decision. See Cogliati v. Ecco High Frequency Corp., 92 N.J. 402, 415-16, 456 A.2d 524 (1983); Mirza v. Filmore Corp., 92 N.J. 390, 398, 456 A.2d 518 (1983).

Accordingly, the judgment of the Appellate Division is modified, and, as modified, affirmed. The case is remanded for proceedings consistent with this opinion.

For modification and affirmance --Chief Justice WILENTZ, and Justices CLIFFORD, HANDLER, O'HERN, GARIBALDI and STEIN--6.

For reversal--None.

[1] In Robins Dry Dock, supra, Justice Holmes ruled that the law did not protect third parties whose contractual expectations were disrupted when the contract was "unknown to the doer of the wrong." Id. at 309, 48 S.Ct. at 135, 72 L.Ed. at 292. In Stockton Waterworks, the court grounded its denial of recovery on the absence of a proximately caused injury. 10 Q.B. at 457.

[2] It has been suggested that courts are ill-equipped to manage efficiently the kind of litigation (and concommitant resource allocation) stemming from the type of disasters that may be produced by negligent mishaps in ultrahazardous businesses, many of which are concentrated here in New Jersey. See, e.g., Louisiana ex rel. Guste v. M/V Testbank, 752 F.2d 1019, 1032-34 (5th Cir.1985) (en banc ) (Gee, J. and Clark, C.J., concurring) (denying recovery to businesses dependent on commercial fishing that lost profits when twelve tons of a toxic chemical spilled into the Mississippi River and the river was closed to fishing for three weeks; commercial fishing businesses recovered). We believe, however, that it would be unwise for the Court to sidestep the question presented on this appeal by rigid adherence to the physical harm rule. Absent forthcoming remedies from our coordinate branches of government, it would seem to serve justice better for a court of law to fashion a remedy in a particular case, and perhaps be corrected by the legislature, than for innocent victims to have no redress at all. E.g., Kelly v. Gwinnell, 96 N.J. 538, 476 A.2d 1219 (1984). "[T]he difficulties of adjudication [should not] frustrate the principle that there be a remedy for every substantial wrong." Dillon v. Legg, supra, 68 Cal.2d at 739, 69 Cal.Rptr. at 79, 441 P.2d at 919.

[3] A further compromise of the nonrecovery rule may be discerned in cases in which courts have allowed a plaintiff to recover only the added costs of performing the contract, but not lost profits, without expressly resting the decision on such considerations as a special relationship or foreknowledge of a particular class of plaintiffs. See J. Ray McDermott & Co. v. S.S. Egero, 453 F.2d 1202 (5th Cir.1972) (defendant who negligently interfered with construction contract was liable for liquidated damages paid to subcontractor, though court said subcontractor could not have recovered if he had sued in his own right); Dominion Tape of Canada Ltd. v. L.R. McDonald & Sons, Ltd., 3 Ont. 627 (1971) (defendant, who caused power failure that forced plaintiff manufacturer to cease manufacturing, was liable for workers' lost wages, required to be paid under the plaintiff's employment contract, but no lost profits); Midvale Coal Co. v. Cardox Corp., 152 Ohio St. 437, 89 N.E.2d 673 (1949) (employer recovered the excess cost of workers' compensation insurance premiums resulting from negligence by defendant to plaintiff's employee); see also Medical Care Recovery Act, 42 U.S.C. § 2651 (giving the federal government a right of recovery for medical care it must and has provided someone, particularly in the armed services, injured by a defendant's negligence).

[4] The rationale has been proffered that negligently-caused economic losses are recoverable if they are part of the entire unit or complex of damages caused by an independent, threshold tort; nonrecoverable economic losses are damages that stand alone or apart from other damages suffered. See Prosser & Keeton, supra, § 129, at 997. This rationale, however, does not explain, for example, why economic losses stemming from an intentional, rather than negligent, interference with economic expectations are recoverable although there is no attendant physical harm and no independent, threshold tort. See, e.g., Lumley v. Gye, 118 Eng.Rep. 749 (Q.B.1853) (one who intentionally induced opera singer to dishonor contract was liable to theatre owner for lost profits). The notion that the defendant must have breached a duty independent of the negligent interference with economic expectations assumes that the defendant's negligence--fortuitously resulting only in economic losses--is not a tort. Whether the law recognizes the injury as compensable is a matter of policy; but clearly an "independent" tort has been committed, and no parasitic relationship with another tort should be required before determining whether the injury is compensable. Further, the rule-of-damages rationale does not explain why the application of concepts of duty and proximate cause, which serve negligence well in cases where the plaintiff is physically harmed, cannot function equally well in cases in which there has been no physical harm. See supra at 110.

[5] In Kinsman, the defendants' negligence caused a ship to break loose from her moorings and careen down the narrow, S-shaped Buffalo River channel. She struck another ship, which in turn broke loose from her moorings and drifted downstream--followed by the first ship--until she crashed into a bridge. The bridge collapsed and its wreckage, together with the two ships, formed a dam, which caused extensive flooding and an ice jam reaching almost 3 miles upstream. As a result of this disaster, transportation on the river was disrupted for a period of about two months. The plaintiff's grain shipments were delayed and substitute grain had to be obtained. 388 F.2d at 822-23. The resultant economic losses were deemed too remote to allow recovery. Id. at 824.

18.2.2 532 Madison Gourmet Foods, Inc. v. Finlandia Center, Inc., 750 N.E.2d 1097(N.Y. 2001) 18.2.2 532 Madison Gourmet Foods, Inc. v. Finlandia Center, Inc., 750 N.E.2d 1097(N.Y. 2001)

Chief Judge KAYE.

          The novel issues raised by these appeals—arising from construction-related disasters in midtown Manhattan—concern first, a landholder's duty in negligence where plaintiffs' sole injury is lost income and second, the viability of claims for public nuisance.

          Two of the three appeals involve the same event. On December 7, 1997, a section of the south wall of 540 Madison Avenue, a 39-story office tower, partially collapsed and bricks, mortar and other material fell onto Madison Avenue at 55th Street, a prime commercial location crammed with stores and skyscrapers. The collapse occurred after a construction project, which included putting 94 holes for windows into the building's south wall, aggravated existing structural defects. New York City officials directed the closure of 15 heavily trafficked blocks on Madison Avenue—from 42nd to 57th Street—as well as adjacent side streets between Fifth and Park Avenues. The closure lasted for approximately two weeks, but some businesses nearest to 540 Madison remained closed for a longer period.

          In 532 Madison Ave. Gourmet Foods v Finlandia Ctr., plaintiff operates a 24-hour delicatessen one-half block south of 540 Madison, and was closed for five weeks. The two named plaintiffs in the companion case, 5th Ave. Chocolatiere v 540 Acquisition Co., are retailers at 510 Madison Avenue, two blocks from the building, suing on behalf of themselves and a putative class of "all other business entities, in whatever form, including but not limited to corporations, partnerships and sole proprietorships, located in the Borough of Manhattan and bounded geographically on the west by Fifth Avenue, on the east by Park Avenue, on the north by 57th Street and on the South by 42nd Street." Plaintiffs allege that shoppers and 287*287 others were unable to gain access to their stores during the time Madison Avenue was closed to traffic. Defendants in both cases are Finlandia Center (the building owner), 540 Acquisition Company (the ground lessee) and Manhattan Pacific Management (the managing agent).

          On defendants' motions in both cases, Supreme Court dismissed plaintiffs' negligence claims on the ground that they could not establish that defendants owed a duty of care for purely economic loss in the absence of personal injury or property damage, and dismissed the public nuisance claims on the ground that the injuries were the same in kind as those suffered by all of the businesses in the community. In 5th Ave. Chocolatiere, plaintiffs' additional claims for gross negligence and negligence per se were dismissed on the ground that plaintiffs could not establish a duty owed by defendants, and their private nuisance cause of action was dismissed on the ground that they could not establish either intentional or negligent wrongdoing.

          Goldberg Weprin & Ustin v Tishman Constr. involves the July 21, 1998 collapse of a 48-story construction elevator tower on West 43rd Street between Sixth and Seventh Avenues—the heart of bustling Times Square. Immediately after the accident, the City prohibited all traffic in a wide area of midtown Manhattan and also evacuated nearby buildings for varying time periods. Three actions were consolidated—one by a law firm, a second by a public relations firm and a third by a clothing manufacturer, all situated within the affected area. Plaintiff law firm sought damages for economic loss on behalf of itself and a proposed class "of all persons in the vicinity of Broadway and 42nd Street, New York, New York, whose businesses were affected and/or caused to be closed" as well as a subclass of area residents who were evacuated from their homes. Plaintiff alleged gross negligence, strict liability, and public and private nuisance.

          Noting the enormity of the liability sought, including recovery by putative plaintiffs as diverse as hot dog vendors, taxi drivers and Broadway productions, Supreme Court concluded that the failure to allege personal injury or property damage barred recovery in negligence. The court further rejected recovery for strict liability, and dismissed both the public nuisance claim (because plaintiff was unable to show special damages) and the private nuisance claim (because plaintiff could not show that the harm threatened only one person or relatively few).

          288*288 The Appellate Division affirmed dismissal of the Goldberg Weprin complaint, concluding that, absent property damage, the connection between defendants' activities and the economic losses of the purported class of plaintiffs was "too tenuous and remote to permit recovery on any tort theory" (275 AD2d 614). The court, however, reinstated the negligence and public nuisance claims of plaintiffs 532 Madison and 5th Ave. Chocolatiere, holding that defendants' duty to keep their premises in reasonably safe condition extended to "those businesses in such close proximity that their negligent acts could be reasonably foreseen to cause injury" (which included the named merchant plaintiffs) (272 AD2d 23) and that, as such, they established a special injury distinct from the general inconvenience to the community at large. Two Justices dissented, urging application of the "economic loss" rule, which bars recovery in negligence for economic damage absent personal injury or property damage. The dissenters further concluded that the public nuisance claims were properly dismissed because plaintiffs could not establish special injury.

          We now reverse in 532 Madison and 5th Ave. Chocolatiere and affirm in Goldberg Weprin & Ustin.

Plaintiffs' Negligence Claims

          Plaintiffs contend that defendants owe them a duty to keep their premises in reasonably safe condition, and that this duty extends to protection against economic loss even in the absence of personal injury or property damage. Defendants counter that the absence of any personal injury or property damage precludes plaintiffs' claims for economic injury.[1]

          The existence and scope of a tortfeasor's duty is, of course, a legal question for the courts, which "fix the duty point by balancing factors, including the reasonable expectations of parties and society generally, the proliferation of claims, the likelihood of unlimited or insurer-like liability, disproportionate risk and reparation allocation, and public policies affecting the expansion or limitation of new channels of liability" (Hamilton v Beretta U.S.A. Corp., 96 NY2d 222, 232 [quoting Palka v Servicemaster 289*289 Mgt. Servs. Corp., 83 NY2d 579, 586]). At its foundation, the common law of torts is a means of apportioning risks and allocating the burden of loss. In drawing lines defining actionable duty, courts must therefore always be mindful of the consequential, and precedential, effects of their decisions.

          As we have many times noted, foreseeability of harm does not define duty (see, e.g., Pulka v Edelman, 40 NY2d 781, 785). Absent a duty running directly to the injured person there can be no liability in damages, however careless the conduct or foreseeable the harm. This restriction is necessary to avoid exposing defendants to unlimited liability to an indeterminate class of persons conceivably injured by any negligence in a defendant's act.

          A duty may arise from a special relationship that requires the defendant to protect against the risk of harm to plaintiff (see, e.g., Eiseman v State of New York, 70 NY2d 175, 187-188). Landowners, for example, have a duty to protect tenants, patrons and invitees from foreseeable harm caused by the criminal conduct of others while they are on the premises, because the special relationship puts them in the best position to protect against the risk (see, e.g., Nallan v Helmsley-Spear, Inc., 50 NY2d 507, 518-519). That duty, however, does not extend to members of the general public (see, Waters v New York City Hous. Auth., 69 NY2d 225, 229). Liability is in this way circumscribed, because the special relationship defines the class of potential plaintiffs to whom the duty is owed.

          In Strauss v Belle Realty Co. (65 NY2d 399) we considered whether a utility owed a duty to a plaintiff injured in a fall on a darkened staircase during a citywide blackout. While the injuries were logically foreseeable, there was no contractual relationship between the plaintiff and the utility for lighting in the building's common areas. As a matter of policy, we restricted liability for damages in negligence to direct customers of the utility in order to avoid crushing exposure to the suits of millions of electricity consumers in New York City and Westchester.

          Even closer to the mark is Milliken & Co. v Consolidated Edison Co. (84 NY2d 469), in which an underground water main burst near 38th Street and 7th Avenue in Manhattan. The waters flooded a subbasement where Consolidated Edison maintained an electricity supply substation, and then a fire broke out, causing extensive damage that disrupted the flow of electricity to the Manhattan Garment Center and interrupting 290*290 the biannual Buyers Week. Approximately 200 Garment Center businesses brought more than 50 lawsuits against Con Edison, including plaintiffs who had no contractual relationship with the utility and who sought damages solely for economic loss. Relying on Strauss, we again held that only those persons contracting with the utility could state a cause of action. We circumscribed the ambit of duty to avoid limitless exposure to the potential suits of every tenant in the skyscrapers embodying the urban skyline.

          A landowner who engages in activities that may cause injury to persons on adjoining premises surely owes those persons a duty to take reasonable precautions to avoid injuring them (see, e.g., Weitzmann v Barber Asphalt Co., 190 NY 452, 457). We have never held, however, that a landowner owes a duty to protect an entire urban neighborhood against purely economic losses. A comparison of Beck v FMC Corp. (53 AD2d 118, 121, affd 42 NY2d 1027) and Dunlop Tire & Rubber Corp. v FMC Corp. (53 AD2d 150, 154-155) is instructive. Those cases arose out of the same incident: an explosion at defendant FMC's chemical manufacturing plant caused physical vibrations, and rained stones and debris onto plaintiff Dunlop Tire's nearby factory. The blast also caused a loss of electrical power—by destroying towers and distribution lines owned by a utility—to both Dunlop Tire and a Chevrolet plant located one and one-half miles away. Both establishments suffered temporary closure after the accident. Plaintiffs in Beck were employees of the Chevrolet plant who sought damages for lost wages caused by the plant closure. Plaintiff Dunlop Tire sought recovery for property damage emanating from the blast and the loss of energy, and lost profits sustained during the shutdown.

          In Dunlop Tire, the Appellate Division observed that, although part of the damage occurred from the loss of electricity and part from direct physical contact, defendant's duty to plaintiffs was undiminished. The court permitted plaintiffs to seek damages for economic loss, subject to the general rule requiring proof of the extent of the damage and the causal relationship between the negligence and the damage. The Beck plaintiffs, by contrast, could not state a cause of action, because, to extend a duty to defendant FMC would, "like the rippling of the waters, [go] far beyond the zone of danger of the explosion," to everyone who suffered purely economic loss (Beck v FMC Corp., 53 AD2d, at 121, supra).

          Plaintiffs' reliance on People Express Airlines v Consolidated Rail Corp. (100 NJ 246, 495 A2d 107) is misplaced. There, a 291*291 fire started at defendant's commercial freight yard located across the street from plaintiff's airport offices. A tank containing volatile chemicals located in the yard was punctured, emitting the chemicals and requiring closure of the terminal because of fear of an explosion. Allowing the plaintiff to seek damages for purely economic loss, the New Jersey court reasoned that the extent of liability and degree of foreseeability stand in direct proportion to one another: the more particular the foreseeability that economic loss would be suffered as a result of the defendant's negligence, the more just that liability be imposed and recovery permitted. The New Jersey court acknowledged, however, that the presence of members of the public, or invitees at a particular plaintiff's business, or persons traveling nearby, while foreseeable, is nevertheless fortuitous, and the particular type of economic injury that they might suffer would be hopelessly unpredictable. Such plaintiffs, the court recognized, would present circumstances defying any appropriately circumscribed orbit of duty. We see a like danger in the urban disasters at issue here, and decline to follow People Express.

          Policy-driven line-drawing is to an extent arbitrary because, wherever the line is drawn, invariably it cuts off liability to persons who foreseeably might be plaintiffs. The Goldberg Weprin class, for example, would include all persons in the vicinity of Times Square whose businesses had to be closed and a subclass of area residents evacuated from their homes; the 5th Ave. Chocolatiere class would include all business entities between 42nd and 57th Streets and Fifth and Park Avenues. While the Appellate Division attempted to draw a careful boundary at storefront merchant-neighbors who suffered lost income, that line excludes others similarly affected by the closures—such as the law firm, public relations firm, clothing manufacturer and other displaced plaintiffs in Goldberg Weprin, the thousands of professional, commercial and residential tenants situated in the towers surrounding the named plaintiffs, and suppliers and service providers unable to reach the densely populated New York City blocks at issue in each case.

          As is readily apparent, an indeterminate group in the affected areas thus may have provable financial losses directly traceable to the two construction-related collapses, with no satisfactory way geographically to distinguish among those who have suffered purely economic losses (see also, Matter of Kinsman Tr. Co., 388 F2d 821, 825 n 8). In such circumstances, limiting the scope of defendants' duty to those who have, as a 292*292 result of these events, suffered personal injury or property damage—as historically courts have done—affords a principled basis for reasonably apportioning liability.

          We therefore conclude that plaintiffs' negligence claims based on economic loss alone fall beyond the scope of the duty owed them by defendants and should be dismissed.[2]

Plaintiffs' Public Nuisance Claims

          Plaintiffs contend that they stated valid causes of action for public nuisance, alleging that the collapses forced closure of their establishments, causing special damages beyond those suffered by the public.

          A public nuisance exists for conduct that amounts to a substantial interference with the exercise of a common right of the public, thereby offending public morals, interfering with the use by the public of a public place or endangering or injuring the property, health, safety or comfort of a considerable number of persons. A public nuisance is a violation against the State and is subject to abatement or prosecution by the proper governmental authority (Copart Indus. v Consolidated Edison Co., 41 NY2d 564, 568).

          A public nuisance is actionable by a private person only if it is shown that the person suffered special injury beyond that suffered by the community at large (see, Burns Jackson Miller Summit & Spitzer v Lindner, 59 NY2d 314, 334 [citing Restatement (Second) of Torts § 821C, comment b]). This principle recognizes the necessity of guarding against the multiplicity of lawsuits that would follow if everyone were permitted to seek redress for a wrong common to the public (Restatement [Second] of Torts § 821C, comment a; Prosser, Private Action for Public Nuisance, 52 Va L Rev 997, 1007 [1966]).

          A nuisance is the actual invasion of interests in land, and it may arise from varying types of conduct (Copart Indus. v Consolidated Edison Co., 41 NY2d, at 569, supra). In the cases before us, the right to use the public space around Madison Avenue and Times Square was invaded not only by the building collapses but also by the City's decision, in the interest of public safety, to close off those areas. Unlawful obstruction of a 293*293 public street is a public nuisance, and a person who as a consequence sustains a special loss may maintain an action for public nuisance (Callanan v Gilman, 107 NY 360, 370). Indeed, "in a populous city, whatever unlawfully turns the tide of travel from the sidewalk directly in front of a retail store to the opposite side of the street is presumed to cause special damage to the proprietor of that store, because diversion of trade inevitably follows diversion of travel" (Flynn v Taylor, 127 NY 596, 600).

          The question here is whether plaintiffs have suffered a special injury beyond that of the community so as to support their damages claims for public nuisance (see, Graceland Corp. v Consolidated Laundries Corp., 7 AD2d 89, 91, affd 6 NY2d 900). We conclude that they have not.

          In Burns Jackson we refused to permit a public nuisance cause of action by two law firms seeking damages for increased expenses and lost profits resulting from the closure of the New York City transit system during a labor strike. We concluded that, because the strike was so widespread, every person, firm and corporation conducting a business or profession in the City suffered similar damage and thus the plaintiffs could not establish an injury different from that of the public at large.

          While not as widespread as the transit strike, the Madison Avenue and Times Square closures caused the same sort of injury to the communities that live and work in those extraordinarily populous areas. As the trial court in Goldberg Weprin & Ustin pointed out, though different in degree, the hot dog vendor and taxi driver suffered the same kind of injury as the plaintiff law firm. Each was impacted in the ability to conduct business, resulting in financial loss. When business interference and ensuing pecuniary damage is "so general and widespread as to affect a whole community, or a very wide area within it, the line is drawn" (Prosser, supra, at 1015). While the degree of harm to the named plaintiffs may have been greater than to the window washer, per diem employee or neighborhood resident unable to reach the premises, in kind the harm was the same.

          Leo v General Elec. Co. (145 AD2d 291) is inapposite. In Leo, the Appellate Division recognized a private right of action by plaintiff commercial fishermen who contended that defendant's pollution of the Hudson River with toxic polychlorinated biphenyls (commonly known as PCBs), created a public nuisance that had a devastating effect on their ability to earn a living. 294*294 Plaintiffs were able to establish that their injuries were special and different in kind, not merely in degree: a loss of livelihood was not suffered by every person who fished the Hudson. By contrast, every person who maintained a business, profession or residence in the heavily populated areas of Times Square and Madison Avenue was exposed to similar economic loss during the closure periods. Thus, in that the economic loss was "common to an entire community and the plaintiff[s] suffer[ed] it only in a greater degree than others, it is not a different kind of harm and the plaintiff[s] cannot recover for the invasion of the public right" (Restatement [Second] of Torts § 821C, comment h).

          Accordingly, in 532 Madison Ave. Gourmet Foods v Finlandia Ctr., the order of the Appellate Division should be reversed, with costs, the defendants' motion to dismiss the complaint granted and the certified question answered in the negative. In 5th Ave. Chocolatiere v 540 Acquisition Co., the order of the Appellate Division should be reversed, with costs, the defendants' motion to dismiss the complaint granted in its entirety and the certified question answered in the negative. In Goldberg Weprin & Ustin v Tishman Constr., the order of the Appellate Division, insofar as appealed from, should be affirmed, with costs.

          In 532 Madison Ave. Gourmet Foods v Finlandia Ctr.: Order reversed, etc.

          In 5th Ave. Chocolatiere v 540 Acquisition Co.: Order reversed, etc.

          In Goldberg Weprin & Ustin v Tishman Constr. Corp.: Order, insofar as appealed from, affirmed, with costs.

          [1] The "economic loss" rule espoused in Schiavone Constr. Co. v Mayo Corp. (56 NY2d 667, revg on dissent at 81 AD2d 221) and relied on by defendants has no application here. That case stands for the proposition that an end-purchaser of a product is limited to contract remedies and may not seek damages in tort for economic loss against a manufacturer (see also, Bocre Leasing Corp. v General Motors Corp., 84 NY2d 685Bellevue S. Assocs. v HRH Constr. Corp., 78 NY2d 282).

          [2] Plaintiff Goldberg Weprin & Ustin's bare allegation that the construction project was dangerously handled was insufficient to set forth a cause of action for strict liability based on an abnormally dangerous activity (see, Engel v Eureka Club, 137 NY 100, 104-105Doundoulakis v Town of Hempstead, 42 NY2d 440, 448). Damage to property—one of the material elements—was not alleged (see, Spano v Perini Corp., 25 NY2d 11, 18).