McLane v. Northwest Natural Gas Company
255 Or. 324, 467 P.2d 635 (1970)
Rule of Law:
The storage of large quantities of natural gas in a populated area is an abnormally dangerous activity for which strict liability is imposed, and this liability extends to harm occurring on the defendant's premises, not just to harm that escapes from it.
Facts:
- The defendant gas company maintained storage units on its property where it collected and controlled large amounts of natural gas.
- The plaintiff's decedent, an individual, was present on the defendant's property to assist in insulating a liquefied gas storage tank that was under construction.
- The decedent was working in a location away from the area where the natural gas was actively being stored.
- A portion of the stored natural gas escaped from the defendant's control.
- The escaped gas entered the tank where the decedent was working and exploded.
- The explosion caused the decedent's death.
Procedural Posture:
- The administratrix of the decedent's estate (plaintiff) filed a wrongful death action against the defendant gas company in an Oregon trial court.
- Defendant filed a demurrer to the complaint, arguing it failed to state a valid cause of action for strict liability.
- The trial court sustained the defendant's demurrer.
- Plaintiff elected not to plead further, and the trial court entered a final judgment in favor of the defendant.
- Plaintiff (appellant) appealed the judgment to the Supreme Court of Oregon.
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Issue:
Is the storage of large quantities of natural gas in a populated area an abnormally dangerous activity for which strict liability applies, even when the resulting injury occurs to a person on the defendant's own property?
Opinions:
Majority - Holman, J.
Yes, the storage of large quantities of natural gas in a populated area is an abnormally dangerous activity for which strict liability applies, and this liability extends to injuries occurring on the defendant's property. The court determined that whether an activity is abnormally dangerous is a question of law for the court. An activity is abnormally dangerous if it is extraordinary for the locality, presents a risk of grave harm, and the risk cannot be eliminated by reasonable care. The court found that storing large quantities of natural gas in a populated area meets this test, viewing it as similar to storing explosives. The court rejected the defendant's argument that strict liability under Rylands v. Fletcher applies only when the harm 'escapes' the defendant's premises, finding no meaningful distinction between a person injured just inside the property line versus just outside, as the basis for liability is the creation of the abnormal risk itself. The court also held that being a public utility does not confer immunity from strict liability, nor does the existence of safety regulations preclude a finding of strict liability, as such liability is not based on fault. Finally, the decedent did not assume the risk as a matter of law merely by working on the premises; assumption of risk requires a knowing and voluntary encounter with the danger, which is a question of fact.
Concurring-in-part-and-dissenting-in-part - McAllister, J.
No, the determination of whether the storage of natural gas is an abnormally dangerous activity should be a question for the trial court to decide based on evidence presented in a specific factual setting, not a ruling as a matter of law based solely on the complaint. While agreeing that the demurrer should be overruled and the plaintiff should be allowed to proceed, this opinion argues the majority erred in deciding the issue as a matter of law at the pleading stage. The decision of whether an activity is abnormally dangerous should be made by the court only after hearing evidence at trial regarding the specific factual setting. The court needs information about the exact nature of the defendant's storage activities, the quantities and form of the gas, and the surrounding circumstances before it can properly classify the activity. Making a blanket ruling without this evidence is premature.
Analysis:
This decision significantly expands the application of strict liability for abnormally dangerous activities in Oregon. By classifying the large-scale storage of natural gas in a populated area as abnormally dangerous, it establishes a key precedent for similar industrial activities. More importantly, the court broke from the traditional English common law rule by holding that the harm does not need to 'escape' the defendant's property, extending protection to invitees and others lawfully on the premises. This places the full cost of non-negligent accidents arising from such high-risk enterprises on the entity that creates the risk, influencing how companies assess liability for on-site contractors and employees in hazardous industries.
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