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MCI loses loss-of-use damages case

The United States Court of Appeals-Eleventh Circuit held today that MCI Communications Services, Inc., could not recover loss-of-use damages absent some showing of monetary loss apart from costs of repairs. MCI initially brought a claim that it could recover such damages after having its cable severed during some excavation work being done by CMES. The cut resulted in 568,263 calls being blocked in addition to a number of customer complaints.

Fortunately for the company, the blocked calls did not result in a loss of customers or loss of profits. Also, the company did not issue any customer refunds or credits as a result of the event.

The court of appeals noted in its opinion that there were no cases on point that it could rely on as precedence and also noted that the Georgia Supreme Court had also ruled that as a matter of law in Georgia, there should be a showing of damages if you are going to recover for loss-of-damages.

I think what is also important is what the court of appeals did not say. It did not throw out the loss recovery standard of rental value of substitute cable. This standard was offered by MCI as a basis of recovery.