ELR Citation: ELR 20618
No(s). 72-2855 (9th Cir. Jun 7, 1974)

Commercial fishermen seek damages under the Outer Continental Shelf Lands Act of 1953 for loss of potential fishing profits resulting from the Santa Barbara oil spill caused by defendant oil company's negligence. The Ninth Circuit Courtof Appeals holds that the oil company owed a duty to the fishermen to refrain from negligent management of their drilling operations, and that by violating this duty they are liable for all injuries flowing directly from their negligence. Despite the general torts rule that loss of potential profits is not a legally compensable damage regardless of defendant's negligence in causing the loss, there are significant exceptions which show that recovery for pure economic loss legally attributable to negligent behavior may be valid in maritime settings. The court also notes that the loss should be allocated to the party who can best correct an error in allocation of liability, and finds that the oil company represents that party in this instance. The case is remanded for a factual determination regarding the extent of legally compensable damages.

Counsel for Appellants-Defendants
Max K. Jamison
3435 Wilshire Blvd. 30th Floor
Los Angeles, CA 90010

Counsel for Appellees-Plaintiffs
Thomas M. Crehan
4201 Wilshire Blvd., Suite 400
Los Angeles, CA 90010