## Facts

- Commercial fishermen in the Santa Barbara Channel sued Union Oil and related offshore drilling entities after the 1969 Santa Barbara Channel oil spill.
- Oil escaped under and near Platform “A” on the Outer Continental Shelf beginning on or about January 28, 1969.
- The released crude oil was carried by wind and tides over coastal waters and, in some instances, to nearby shorelines.
- Plaintiffs sought damages for lost profits and related economic losses caused by a reduction in the commercial fishery’s productivity.
- Plaintiffs did not allege personal injury or physical damage to their vessels, gear, or other property; the claimed losses were purely economic and flowed from harm to marine life in public waters.
- The actions proceeded under the Outer Continental Shelf Lands Act and maritime/admiralty jurisdiction, and the parties entered a stipulation addressing agreed facts and payment for injuries deemed “legally cognizable.”

## Issues

1. Whether maritime negligence law permits commercial fishermen to recover purely economic losses caused by an oil spill that damages a public fishery, absent physical injury to the fishermen’s persons or property.
2. Whether offshore drillers owe a duty of care to commercial fishermen to avoid foreseeable economic loss resulting from negligent pollution of public waters.
3. Whether the parties’ stipulation to pay “legally cognizable” damages encompassed fishermen’s lost-profit claims.

## Decision

- The Ninth Circuit affirmed the district court’s denial of defendants’ motion for partial summary judgment.
- The court held the fishermen’s lost-profit claims were legally cognizable and could proceed in negligence under applicable maritime principles.
- The court accepted the district court’s interpretation that the stipulation’s “legally cognizable” language included these lost-profit claims once recognized as recoverable.
- The court treated the ruling as a limited allowance of recovery for a narrow class of plaintiffs whose losses were closely tied to pollution-related damage to a public fishery.

## Legal Principles

- Under maritime negligence principles applied in the Outer Continental Shelf context, a defendant may owe a duty to a limited, foreseeable class of commercial users of a public resource harmed by negligent pollution.
- The general bar on recovery for negligently inflicted purely economic loss is a policy-based limitation, not an absolute rule, and may yield where the plaintiff’s economic interest is directly and foreseeably affected.
- Commercial fishermen whose livelihood depends on a specific, affected fishery may recover lost profits caused by negligent impairment of that fishery, even without physical injury to their own property.
- Limiting recovery to a narrow, identifiable class (commercial fishermen directly dependent on the fishery) addresses concerns about open-ended liability to an indeterminate class.

## Conclusion

The Ninth Circuit permitted commercial fishermen to pursue negligence claims for lost profits stemming from an offshore oil spill’s damage to a public fishery, recognizing a narrowly confined exception to the traditional restriction on purely economic loss recovery where harm to fishermen was especially foreseeable and the claimant class was limited.


Union Oil Co. v. Oppen, 501 F.2d 558 (9th Cir. 1974)