Red Rocks Resources LLC v. Trident Steel Corporation, 5:14-cv-00948

Red Rocks Resources (Plaintiff) purchased casing from Trident Steel (Defendant) for use in drilling an oil well; Plaintiff alleges the casing was defective and failed, causing loss of the well.
Plaintiff sued Trident asserting defective product, breach of implied merchantability, breach of implied warranty of fitness for a particular purpose, and negligence.
Trident moved for partial summary judgment arguing (1) Plaintiff’s tort claims are barred by Oklahoma’s economic loss rule and (2) invoice terms limiting liability became part of the parties’ contract.
The central factual dispute relevant to the motion: whether Plaintiff’s damages are solely economic loss to the product (the casing) or include loss to the separate well, and whether invoice terms were incorporated into the contract.
The Court considered earlier rulings (including a prior denial of Trident’s motion to dismiss) and new discovery evidence about post-delivery inspection but found no genuine dispute that the parties formed a contract upon Plaintiff’s acceptance of price and quantity terms.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the economic loss rule bars Plaintiff’s tort claims	Damages include loss of the well (distinct from the casing), so claims are not limited to product-only economic loss	Loss of the well is consequential economic damage to the same product; Waggoner bars tort recovery for product-only economic loss	Denied — economic loss rule inapplicable because Plaintiff seeks recovery for damage to something other than the defective product (the well)
Whether invoice terms sent after delivery (limiting damages) were incorporated into the sales contract	Contract was formed when Plaintiff accepted price and quantity; later invoice terms were not accepted and thus not part of the contract	Post-delivery inspection and course of dealing show acceptance of invoice terms, so limitations should apply	Denied — later invoice terms were a material alteration not expressly accepted; inspection/permitting rejection does not equal acceptance; course of dealing insufficient to incorporate terms

Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burdens/standards)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (materiality and genuine issue standard)
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. 1986) (courts construe facts in nonmovant’s favor)
Waggoner v. Town & Country Mobile Homes, Inc., 808 P.2d 649 (Okla. 1990) (adoption of economic loss rule for product-only damage)
Dutsch v. Sea Ray Boats, Inc., 845 P.2d 187 (Okla. 1992) (economic loss rule does not apply where damage extends beyond the product itself)
Altronics of Bethlehem, Inc. v. Repco, Inc., 957 F.2d 1102 (3d Cir. 1992) (repeated sending of standard terms without action does not create course of dealing to incorporate terms)
Step-Saver Data Sys., Inc. v. Wyse Tech., 939 F.2d 91 (3d Cir. 1991) (same principle on incorporation by course of dealing)