Lieff Cabraser Civil Justice Blog
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California Court Denies Defendant SoCalGas’ Bid to Strike Class Claims & Business Loss Complaint in Porter Ranch Gas Leak Cases

On May 8, 2017, Judge John Wiley, Jr. of the Los Angeles Superior Court issued an Order in the Southern California Gas Leak Cases, JCCP 4861 and related cases, denying all three of SoCalGas’ motions. SoCalGas moved to strike the class claims of businesses and property owners over the liability of Southern California Gas relating to the massive gas leak near Porter Ranch that started in October 2015. SoCalGas also asked the Court to throw out the Business Class Action Complaint on the basis that purely economic losses are not recoverable for this kind of case.

With respect to the motions to strike, the Judge observed that in the face of the thousands of lawsuits filed by residents and homeowners who suffered economic injuries in the wake of the gas leak, the class action mechanism may well provide a “speedy, efficient, and consistent resolution” of the actions, as well as potentially providing a simpler and cheaper mechanism for achieving justice for all concerned, “as compared to litigating the same issue in thousands of individual cases.”

Similarly, the Court overruled SoCalGas’ demurrer to the Business Class Action Complaint. Area businesses brought a lawsuit to recover economic losses suffered when the gas leak forced nearly 15,000 Porter Ranch residents to evacuate the area. SoCalGas argued that they have no obligation to pay for the kind of losses suffered by area businesses, including day cares, restaurants, nail salons, and retail stores. SoCalGas claimed that the “economic loss rule” barred the area businesses from receiving compensation for harms that did not include property damage or personal injuries. In rejecting SoCalGas’ arguments, the Court held that “[c]ompanies must face the full cost of accidents they can create, or from a social perspective they will underinvest in precautions … standard tort theory mandates that Southern California Gas Company bear all costs its accident caused. This total should include tangible and conventionally measurable economic losses to neighboring businesses.”

Learn more about the Porter Ranch/Alviso Southern California Gas Leak Cases.