In re Chicago Flood Litigation

When a downtown Chicago freight tunnel flooded, property owners and businesses connected to the tunnel (plaintiffs) sued the City of Chicago (defendant) for physical property damage, lost revenues, lost wages, and lost inventory. The trial court allowed recovery for physical property damage, including perishable inventory spoiled during the resulting power outage, but barred recovery for purely economic losses under the economic-loss rule; the court of appeals affirmed, and both sides appealed.