In Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407 (Tex. Oct. 21, 2011), the Texas Supreme Court held that the economic loss rule applied only in cases involving defective products or failure to perform a contract. Id. Further, the court held that those losses were more appropriately addressed through statutory warranty actions or common law breach of contract suits. Id. After discussing all aspects of the economic loss rule, the Supreme Court found that the sewer lines in question in Sharyland were, in fact, damaged and, therefore, the economic loss rule did not operate to prohibit recovery on the city's negligence claim. Id. The Texas Supreme Court explained that it has applied the economic loss rule only in cases which have involved defective products or failure to perform a contract and had applied the rule even to cases wherein no privity of contract existed for example in cases concerning a remote manufacturer and a consumer. 354 S.W.3d at 418. In that case, Sharyland Water Supply Corp. (the "water company") sued the City of Alton (the "City") for negligence because the City's contractors had allegedly failed to install a sanitary sewer system consisting of main sewer lines in accordance with the applicable state regulations. Id. at 410. The water company claimed those sewer lines threatened to contaminate the water company's potable water supply. Id. The court of appeals held that the economic loss rule barred the water company's negligence claim against the contractors although it was a non-party to the contract. Id. at 411. The Sharyland court reversed the lower court's judgment holding that the water company's negligence claim was not barred by the economic loss rule. Id. at 420. The supreme court said that it had "never held that the economic loss rule precludes recovery completely between contractual strangers in a case not involving a defective product--as the court of appeals did here." Id. at 418. The court reasoned that "merely because the sewer was the subject of a contract does not mean that a contractual stranger is necessarily barred from suing a contracting party for breach of an independent duty." Id. at 419. The court ended its analysis by stating, "The economic loss rule cannot apply to parties without even remote contractual privity, merely because one of those parties had a construction contract with a third party, and when the contracting party causes a loss unrelated to its contract." Id. at 420.