MCI Communications Services, Inc. v. CMES, Inc.
291 Ga. 461
| Ga. | 2012Background
- CMES severed an underground fiber cable owned by MCI in Georgia, causing thousands of blocked calls and hundreds of customer complaints for about nine hours.
- MCI had preinstalled spare restorative capacity at a cost of $6.4 million and rerouted traffic to maintain service during repair.
- MCI sought damages including repair costs and loss-of-use damages; CMES moved for partial summary judgment arguing no recoverable loss of use.
- District court granted summary judgment denying loss-of-use damages and the Eleventh Circuit certified whether Georgia law allows loss-of-use damages measured by the rental value of substitute cable when no monetary loss is shown.
- The Supreme Court held that MCI cannot recover loss-of-use damages measured by a hypothetical rental value when it suffered no actual monetary loss or need to rent substitute capacity; damages must be tied to actual loss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether loss-of-use damages may be awarded without actual monetary loss | MCI should recover based on rental value of substitute capacity | No actual monetary loss; cannot use speculative rental value | No; loss-of-use damages require actual loss or injury. |
| Whether damages may be measured by hypothetical rental value of substitute fiber | Restatement § 931 allows loss of use via substitutes | Georgia law requires tangible loss; cannot rely on guesswork | No; cannot measure by hypothetical rental value. |
| Whether spare capacity and rerouting negate loss of use damages | Redundancy system caused no actual loss | There was disruption and potential loss; damages may exist | Yes; no loss of use because service remained functional. |
| Whether Restatement (Second) of Torts § 931 controls recovery | Supports recovery via value of use or substitute | Not adopted as controlling in Georgia | No; not controlling authority for recovery in this case. |
Key Cases Cited
- E.H. Ross & Co. v. White, 224 Ga. 324 (Ga. 1968) (damages to compensate injury; loss allowed where injury proven)
- Doughty v. Simpson, 190 Ga. App. 718 (Ga. App. 1989) (loss of use; compensatory damages</)
- Lester v. S.J. Alexander, Inc., 127 Ga. App. 470 (Ga. App. 1972) (burden of proof; reasonable certainty for loss amount)
- Firestone Tire & Rubber Co. v. Jackson Transp. Co., 126 Ga. App. 471 (Ga. App. 1972) (loss of use; ceiling to pre-injury value; reasonable rental rate)
- Southern Crate & Veneer Co. v. McDowell, 163 Ga. App. 153 (Ga. App. 1982) (loss of use where substitute needed; not destroyed property)
- Canal Ins. Co. v. Tallis, 237 Ga. App. 515 (Ga. App. 1999) (evidence of fair market value pre-injury required; cannot overstate damages)
- Goss v. Total Chipping, 220 Ga. App. 643 (Ga. App. 1996) (requires proof of damages; not based on mere speculation)
- Brooklyn Eastern Dist. Terminal v. United States, 287 U.S. 170 (U.S. 1932) (spare-capacity doctrine; caution against unwarranted damages for general business needs)