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Union Oil Company v. Oppen, 501 F.2d 558 |
California Court of Appeals |
1974 |
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Chapter |
15 |
Title |
Nuisance |
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Page |
624 |
Topic |
Public Nuisance |
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Quick Notes |
An oil spill off the coast of Santa Barbara occurred. Commercial fisherman, sought to recover profits lost as a result of the reduction in the commercial fish potential. Negligent interference with an economic advantage is actionable. |
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Book Name |
Torts Cases, Problems, And Exercises. Weaver, Third Edition. ISBN: 978-1-4224-7220-0. |
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Issue |
o Does the alleged diminution of the aquatic life of the Santa Barbara Channel claimed to have resulted from the occurrence constitute a legally compensable injury to the Commercial Fishermen claimants? Yes. |
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Procedure |
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District |
o United States District Court for the Central District of California |
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Appellant |
o Order denying defendants' motion for partial summary judgment was affirmed |
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Facts |
Rules |
Reason |
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o Pl - Oppen o Df - Union Oil Company What happened? o An oil spill off the coast of Santa Barbara occurred. o Plaintiffs, commercial fisherman, sought to recover profits lost as a result of the reduction in the commercial fish potential of the Santa Barbara channel which may have been caused by the oil spill from defendants' platform. o Defendant moved for partial summary judgment, contending that no cause of action exists against a defendant whose negligence prevents a plaintiff from obtaining a prospective pecuniary advantage. o The court disagreed; holding that negligent interference with economic advantage was actionable. o The right of plaintiffs to recover for injuries to their business caused by pollution of public water was recognized, even though they experienced no physical harm. o Defendants were under a duty to plaintiffs to conduct their drilling and production in a reasonably prudent manner so as to avoid the negligent diminution of aquatic life. o It was foreseeable that injury that negligently conducted drilling operations might diminish aquatic life and thus injure the business of plaintiffs. Holding o The order denying defendants' motion for partial summary judgment was affirmed because negligent interference with an economic advantage is actionable |
I. Applicable Law o No definitive ruling if maritime or CA law applies.
II. Recovery for Pure Economic Loss in Negligence: The General Rule Rule o No cause of actions lies against a Df whose negligence prevents the Pl from obtaining a prospective pecuniary [money] advantage.
Three Arguments/Defenses To Negligence 1. A negligent Df owes NO duty to Pl - seeking compensation for such injuries. 2. Courts have invoked the doctrine of proximate cause to reach the same results. 3. Cases of remoteness of the economic loss is relied upon directly to deny recovery.
III. Some Exceptions to the General Rule o To determine if a Df will be held liable to a third person not in privity with him is a matter of policy and involves the balancing of various factors, among which are the o (1) extent to which the transaction was intended to affect the plaintiff, o (2) the foreseeability of harm to him, o (3) the degree of certainty that the plaintiff suffered injury, o (4) the closeness of the connection between the defendant's conduct and the injury suffered, o (5) the moral blame attached to the defendant's conduct, and the policy of preventing future harm.
Admiralty Law o A claim for economic loss, unaccompanied by any physical injury to the person or property of the claimant, has been recognized under admiralty law.
Riparian Injury Rule (relating to or located on the banks of a river or stream) o The injury for which damages were sought in each case was the loss of anticipated profits -- a pure economic loss as that term is normally understood. o To permit riparianship to transmute this loss into an ordinary property loss for the purpose of allowing recovery does no harm. o However, harm would be done if the fact that the plaintiffs in this case are not riparian owners was held to deprive them of the comfort these authorities provide.
IV.The Instant Action Rule Duty and Obligation o Defendant owes a duty, in the sense of a potential liability for damages, only with respect to those risks or hazards whose likelihood made the conduct unreasonably dangerous, and hence negligent, in the first instance. o The obligation turns on whether 'the offending conduct foreseeably involved unreasonably great risk of harm to the interests of someone other than the actor. o The obligation to refrain from the particular conduct is owed only to those who are foreseeably endangered by the conduct and only with respect to those risks or hazards whose likelihood made the conduct unreasonably dangerous. o Duty is measured by the scope of the risk which negligent conduct foreseeably entails.
Optimum Theory o Liability for losses occasioned by torts should be apportioned in a manner that will best contribute to the achievement of an optimum allocation of resources. o This would be achieved by a perfect market system. o The court would need to fix the identity of the party who can avoid the costs most cheaply.
Holding o The defendants are under a duty to commercial fishermen to conduct their drilling and production in a reasonably prudent manner so as to avoid the negligent diminution of aquatic life is not foreclosed by the fact that the defendants' negligence could constitute a public nuisance under California law.
To establish the injury o To do this it must be shown that the oil spill did in fact diminish aquatic life, and that this diminution reduced the profits the plaintiffs would have realized from their commercial fishing in the absence of the spill. o This reduction of profits must be established with certainty and must not be remote, speculative or conjectural. o The Pl - are allowed to prove their case and to reject the Df - idea economic recovery is barred from negligent interference. |
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Class Notes |
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Recovery for Pure Economic Loss in Negligence: The General Rule Rule o No cause of actions lies against a Df whole negligence prevents the Pl from obtaining a prospective pecuniary [money] advantage
Is there person injury to the fisherman? No. Is there property damaged? No.
To establish the injury o To do this it must be shown that the oil spill did in fact diminish aquatic life, and that this diminution reduced the profits the plaintiffs would have realized from their commercial fishing in the absence of the spill. o This reduction of profits must be established with certainty and must not be remote, speculative or conjectural. o The Pl - are allowed to prove their case and to reject the Df - idea economic recovery is barred from negligent interference.
Is it foreseeable that if I am pumping oil that I might damage another persons business?
Three Arguments/Defenses To Negligence 1. A negligent Df owes NO duty to Pl - seeking compensation for such injuries. 2. Courts have invoked the doctrine of proximate cause to reach the same results. 3. Cases of remoteness of the economic loss is relied upon directly to deny recovery.
Page 626 o Types of cases a person may recover economic loss caused by the negligence of persons such as bankers, commission agents, real estate agents, accounts,
The court took an Allocative approach instead of a distributive approach.
This is an Allocative approach o Who can avoid it the cheapest.
Distributive approach o How has the deepest pockets.
Key Factors o Key Factor that shows the court that Union is the best person to bear the cost They can afford to buy out the fishing businesses o How did the fishermen having standing here? It had to affect them PARTICULARLY over the public in general
The Pl must prove damages to a reasonable certainty.
What do you need to have standing? o It affects them specifically over the rights above the community.
Standing? o You need to have a cognizable injury. |