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California Supreme Court Limits Duty of Care Where Plaintiffs Seek Purely Economic Losses

June 4, 2019

Southern California Gas Leak Cases (May 30, 2019, S246669) ___ Cal.5th ___ [2019 WL 2292831]

In Southern California Gas Leak Cases, the California Supreme Court held that a defendant owes no general duty to plaintiffs in a negligence action seeking to recover purely economic losses.

In upholding the economic loss doctrine, the Supreme Court discussed the need for a clear rule to prevent limitless liability and unending litigation. The court analyzed cases from courts across the country that have rejected recovery for purely economic losses in similar circumstances, and analyzed the Restatement of Torts, which adopts this majority view. The court also addressed the difficulty of imposing a general duty on defendants, and concluded that it could not find a way to limit geographically or temporally what purely economic losses could be recovered. With “no workable way to limit geographically who may recover purely economic losses . . . the dangers of indeterminate liability, over-deterrence, and endless litigation are at their apex.”

Horvitz & Levy filed an amicus brief supporting SoCalGas.

More Information

For more information, please contact Eric S. Boorstin and Yen-Shyang Tseng .

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