Oregon Steel Mills, Inc. v. Coopers & Lybrand, LLP, 336 Or. 329

Summary

The Supreme Court of Oregon held that an accounting firm was not liable for a client's alleged losses resulting from market-price fluctuations during a delayed securities offering when those market forces were unrelated to the firm's negligence. Although the firm's conduct was a factual cause of the delay, the market losses were not a reasonably foreseeable consequence of the negligent accounting conduct as a matter of law. The court reversed the Court of Appeals and affirmed summary judgment for the accounting firm.

Holdings

1. An accountant whose negligence delays a client's securities offering is not liable for damages measured by a decline in the client's stock price when the decline was caused by market forces unrelated to the accountant's conduct.
2. Although an accountant-client relationship may establish a duty to provide competent accounting services, that duty does not, absent a specific source of law establishing a broader obligation, include a duty to protect the client from fluctuations in the market price of its stock.
3. Summary judgment for Coopers & Lybrand was proper because the undisputed record established as a matter of law that the claimed decline in stock value was not a reasonably foreseeable consequence of the firm's negligence.

Questions Presented

1. Whether an accounting firm may be held liable for economic damages measured by a decline in the client's stock price during a delayed securities offering when the decline was caused by market forces unrelated to the firm's negligent conduct.
2. Whether the alleged market loss was a reasonably foreseeable consequence within the scope of the accountant's duty to its client.
3. Whether summary judgment was proper on the claim for market-based damages.

Disposition

reversed