Headless,
It is a fact because it is undisputed that there was damage - that means someone is going to eat the cost. It wouldn't be called "damage" otherwise. The lost briefcase will either be replaced for money, or the use that gave it value in the first place will be foregone. Damages do not cease to exist because you choose not to fork over cash; the loss itself represented value, which was why someone paid for the product in the first place. Loss is also why people seek medical treatment.
AZredhawk, your post is a perfect example of why it is fruitless to impose the cost on consumers. The average passenger doesn't have any idea how to design an airplane better; that's why for all the costs they'll suffer (unlikely as they are) due to existing airplane designs, there will be no productive result. Impose the costs of airplane accidents on the owner of the plane, however, and over time the owner has every incentive to promote and adopt new technologies that help minimise the damage or avoid the accident. Saying that the airline should pay the costs when there's an airline accident involving the airline's plane is not "California style control." It imposes the costs on the only party that has the ability to do something about it, and leaves it up to the market whether that cost actually results in improved airplanes. In any case, the incentive has some productive value, whereas imposing the cost on the passenger does nothing.
Bridgewalker,
You would have to skip all the tort law on independent contractors, animals, unusually dangerous activities (changing over time), and products liability to miss the parts where liability is traditionally imposed without a finding of negligence. This is called "strict liability" traditionally, and that's exactly what it means: No matter what, you pay for damages caused by whatever activity is at issue. It has nothing to do with whether you should have done something else; the argument about incentives for new technology is policy rationale, not law, of which there is already more than enough to justify holding people liable in some circumstances without fault or negligence of any kind.
According to my law school notes, we learned some of these cases on the subject:
Rylands v. Fletcher (1868), L.R. 3 H.L. 330
Siegler v. Kuhlman, 473 P.2d 445 (1970)
Greenman v. Yuba Power Products, 59 Cal. 2d 57 (1963)
Gray v. Manitowoc Company, 771 F.2d 866 (5th Cir. 1985) seems particularly close to the point, if my rusty notes are correct.