In State Farm Mutual Automobile Insurance Company v. Norcold, Inc., 849 F.3d 328 (6th Cir. 2017), the United States Court of Appeals for the Sixth Circuit considered whether Kentucky’s economic loss rule applies to consumer transactions. The economic loss rule prevents the buyer of a product from suing in tort to recover for economic losses when the product damages only itself. The Sixth Circuit predicted that Kentucky would not extend the economic loss rule to consumer transactions. The Norcold case reminds us that, while the economic loss rule can be a significant impediment to products liability subrogation claims, it is important to consider whether there are exceptions available to overcome this defense.
In Rogers v. Wright, 366 P.3d 1264 (Wyo. 2016), the Supreme Court of Wyoming held that home builders have a tort duty of reasonable care and this duty, independent of any contractual obligations, makes the economic loss rule inapplicable.