Yukon Equipment, Inc. v. Fireman's Fund Insurance Co.
585 P.2d 1206 (1978)
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Rule of Law:
A party that stores explosives is subject to absolute liability for damages caused by an explosion, and the intentional, criminal act of a third party that causes the explosion is not a superseding cause relieving the party of liability if that act is not highly extraordinary.
Facts:
- E. I. du Pont de Nemours and Company leased a storage magazine for explosives from the federal government, which was operated by Yukon Equipment, Inc.
- The magazine was located on a 1,870-acre tract of federal land north of Anchorage designated for explosive storage.
- The magazine had been illegally broken into at least six times prior to the explosion, and Yukon Equipment had knowledge of these entries.
- A day or two before the main incident, thieves stole explosives from the site.
- On December 7, 1973, four young men broke into the magazine, which contained approximately 80,000 pounds of explosives.
- The men intentionally set a prepared charge and fled, causing a massive explosion in an effort to conceal their earlier theft.
- The explosion damaged dwellings and other buildings within a two-mile radius and beyond.
Procedural Posture:
- Owners of property damaged by the explosion brought a consolidated lawsuit against E. I. du Pont de Nemours and Company and Yukon Equipment, Inc. in an Alaska superior court (trial court).
- The plaintiffs (respondents) and defendants (petitioners) filed cross-motions for partial summary judgment on the issue of liability.
- The superior court granted partial summary judgment on the issue of liability in favor of the property owners.
- The defendants, Yukon Equipment and E. I. du Pont de Nemours, appealed the superior court's grant of summary judgment to the Supreme Court of Alaska.
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Issue:
Is a party engaged in the abnormally dangerous activity of storing large quantities of explosives strictly liable for resulting damages when the explosion is intentionally detonated by the criminal act of a third party?
Opinions:
Majority - Justice Matthews
Yes. A party storing explosives is subject to absolute liability for resulting harm, and the criminal act of a third party does not serve as a superseding cause to relieve the party of this liability. The court adheres to the rule from Exner v. Sherman Power Constr. Co., which imposes absolute liability for the storage of explosives as a per se abnormally dangerous activity, rejecting the multi-factor analysis of the Restatement (Second) of Torts for such cases. The loss is properly regarded as a cost of the business. Furthermore, the intentional detonation by thieves was not a superseding cause because the incendiary destruction of property to conceal theft is not a 'highly extraordinary' event, especially given the prior break-ins at the facility. Since the resulting harm—an explosion—was the very risk created by the activity, the foreseeability of the precise intervening cause is not required to impose liability.
Concurring - Justice Rabinowitz
Yes. While concurring in the result, this opinion disagrees with the majority's adoption of a per se rule of absolute liability for storing explosives. The better approach is to use the six-factor test from the Restatement (Second) of Torts § 520 to determine on a case-by-case basis whether an activity is 'abnormally dangerous.' However, applying that very test to the facts of this case still leads to the conclusion that storing 80,000 pounds of explosives was an abnormally dangerous activity. Therefore, imposing absolute liability was correct, and the majority's analysis of the superseding cause issue is also sound.
Analysis:
This decision establishes a categorical rule in Alaska holding that the storage of explosives is a per se abnormally dangerous activity subject to absolute liability. By explicitly rejecting the more flexible, fact-intensive six-factor test from the Restatement (Second) of Torts § 520 for this specific activity, the court created a strong, plaintiff-friendly precedent. The ruling also narrows the superseding cause defense in strict liability cases, clarifying that foreseeable criminal acts that trigger the very harm risked by the dangerous activity do not sever the chain of causation. This places the full cost of potential accidents, even those triggered by third parties, on the enterprises that engage in and profit from such hazardous activities.
