THE OKLAHOMA BAR JOURNAL 32 | APRIL 2026 Blackmun, East River is widely credited as the first U.S. Supreme Court decision to adopt and apply the economic loss doctrine. In adopting the position that purely economic losses are not recoverable in products liability, the U.S. Supreme Court reasoned that “protection of the buyers’ expectations as to product value ‘is precisely the purpose of express and implied warranties.’”15 Only two years after Waggoner, the Oklahoma Supreme Court revisited the application of the economic loss doctrine in Oklahoma Gas & Elec. Co. v. McGraw-Edison Co.16 Significantly, the Oklahoma Supreme Court more clearly characterized manufacturers’ products liability cases, absent personal injury or property damage, as actions sounding in contract rather than tort. The court held that a plaintiff in a manufacturer’s products liability action cannot recover damages for injury to the allegedly defective product itself and consequential economic harm flowing from that injury.17 This rationale was then reaffirmed in Dutsch v. Sea Ray Boats, Inc.,18 when the Oklahoma Supreme Court had the chance to recognize one of the exceptions to the economic loss doctrine – where personal injury is involved in the products defect claim. The holdings and rationale of the Oklahoma Supreme Court in these cases draw upon one of the bedrock principles underlying the doctrine: maintaining a clear distinction between tort and contract law when a contract remedy suffices and there has been no personal injury or damage to property.19 THE CURRENT STATE OF THE ECONOMIC LOSS DOCTRINE IN OKLAHOMA AND ITS POTENTIAL EXPANSION Recent Oklahoma case law more clearly defined the boundary between tort and contract and, in doing so, arguably opened the door for further application of the economic loss doctrine. First, in Mills v. J-M Mfg. Co.,20 the Oklahoma Supreme Court undoubtedly recognized the second exception to the economic loss doctrine – where there is damage to property other than the product itself.21 This exception is often referred to as the “other property” exception. After recognizing this exception to the doctrine, the Mills court took a step further, analyzing whether the doctrine barred an indemnity claim brought by a third party that owned the “other property” that was damaged.22 Mills involved a products defect claim brought by property owners whose property was damaged after a saltwater pipe sold by Rainmaker, manufactured by JM Eagle and installed by Charter Oak failed under pressure.23 After Charter Oak settled with the property owners, Charter Oak sought indemnity from Rainmaker and JM Eagle.24 Importantly, the indemnity claim was based on the legal relationship of the parties, not a contractual indemnity relationship.25 While reaffirming that the doctrine “bars recovery under manufacturer’s products liability for purely economic injury to the product itself,” the Mills court held that the doctrine did not bar the indemnity claim.26 Specifically, the Mills court held, “The economic loss rule does not bar a claim for indemnity where a party satisfies a legal obligation to compensate for damage to third-party property caused by a defective product.”27 In rendering its decision, the Mills court highlighted the primary purpose of the doctrine: “to preserve the boundary between tort and contract by precluding recovery for purely economic losses where contract remedies exist.”28 Additionally, the Mills court reasoned that applying the doctrine to bar the indemnity claim would have been inequitable by punishing Charter Oak for fulfilling its nondelegable duty to the property owners despite having no connection to the cause of the product’s failure.29 In a footnote, the Mills court noted that other jurisdictions had extended the economic loss doctrine beyond products liability. Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff. Recent Oklahoma case law more clearly defined the boundary between tort and contract and, in doing so, arguably opened the door for further application of the economic loss doctrine.
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