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When Losses Are Too Big: Evaluating The Economic Loss Doctrine In California, John T. Nockleby

Loyola of Los Angeles Law Review

The pure economic loss doctrine is a rule developed by common law courts to shield a defendant from exposure to negligence suits where a party has not suffered physical injury or property damage, and the only losses someone suffers are economic in nature—such as lost profits or wages. Most recently, the California Supreme Court evaluated whether the doctrine should be applied in a case involving a massive environmental disaster, holding that the doctrine shielded a utility from liability for the economic losses to neighboring businesses caused by its putative negligence.

In October of 2015, a huge underground natural gas storage …