Rachel B. Beauchamp Successfully Defends Attempts to Revise Minnesota’s Property Damage Recovery Standards

Rachel B. Beauchamp obtained summary judgment defining the scope of “loss of use” damages recoverable in a case involving multiple severed telecommunications cables.  Attorneys around the country have brought lawsuits alleging that telecommunications companies are entitled to hundreds of thousands, and sometimes millions, of dollars of damages for “loss of use” during the time it takes to repair damaged or severed cables even if the companies were able to reroute their traffic onto alternative capacity cables and have not issued any refunds to customers, have not lost any revenue, and have lost no profits.   Some jurisdictions have allowed telecommunications companies to recover these “loss of use” damages despite the fact that the amounts claimed were never actually incurred by relying on a series of New York ferry-boat cases that liken telecommunications cables to a “spare boat”.  The issue was one of first impression in Minnesota and the Eighth Circuit as a whole.  Chief United States District Judge John R. Tunheim, applying Minnesota state substantive law, held that no such theoretical damages are recoverable in Minnesota, because Minnesota imposes a duty to mitigate and the companies are able to utilize their space cables to mitigate any actual losses other than repair costs.  In addition, Judge Tunheim confirmed that allowing telecommunications corporations to receive enormous windfalls for damages never actually incurred as a result of the damage to cables would be a violation of public policy.