S. Cal. Gas Co. v. Superior Court of L. A. Cnty. (In re S. Cal. Gas Leak Cases)

*583 Seven businesses (business plaintiffs) filed suit to recover damages for purely economic loss resulting from a massive natural gas leak at a Southern California Gas Company (SoCalGas) facility; they did not claim any injury to person or property. Although our Supreme Court long ago recognized plaintiffs may sue in negligence for economic loss alone Biakanja v. Irving (1958) 49 Cal.2d 647 , 320 P.2d 16 ( Biakanja ), such recovery has been limited to situations where a transaction between the defendant and another was intended to directly affect the plaintiff (a third party), whose economic loss was a foreseeable consequence of the defendant's negligence. As business plaintiffs' complaint lacked allegations of personal injury, property damage, or the requisite transaction, SoCalGas filed a demurrer to the causes of action based on negligence. 1

Concluding there is some uncertainty in the law, respondent court held SoCalGas should "bear all costs its accident caused" and there is no bar to recovery for purely economic loss under negligence theories when the *584 precipitating event is a mass tort. The demurrer was overruled and SoCalGas petitioned for extraordinary relief. We…

Although I dissent from today's decision, it is not because I believe the trial court's rationale for overruling Southern California Gas Company's demurrer is correct-I agree it is not. But it was a mistake for us to have intervened at this early stage of the case, and that mistake may well have significant consequences on the merits.

*129 In another case involving a utility company, our Supreme Court endorsed the rule that an appeal from a final judgment is "normally presumed to be an adequate remedy at law" for a party who believes it is aggrieved by an erroneous ruling overruling a demurrer. ( San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal.4th 893 , 912-913, 55 Cal.Rptr.2d 724 , 920 P.2d 669 ( San Diego Gas ).) That normally adequate remedy "thus bar[s] immediate review by extraordinary writ." ( Ibid. [explaining an exception to the bar applies in circumstances not present here, namely, when the demurrer raises an important question of subject-matter jurisdiction].)

Despite this rule, this court issued an alternative writ to review the trial court's demurrer ruling, tentatively concluding the trial court erred in determining "the general prohibition against…