2. Business and Torts
• Arise from careless errors or intentional actions
• Lawsuits involving businesses may have large
awards, i.e. Pennzoil-Texaco case: Jury awarded
$10.5 billion to the plaintiff.
• Plaintiffs think of businesses as “deep pockets”.
• Business can be liable under agency law if a tort
results in an activity “within the scope of the
worker’s employment”.
• Types
– Negligence (Unintentional)
– Intentional
– Strict Liability (Without fault) (Ch. 9)
– Torts Particular to Property
3. The Role of Tort Law
• Definition
– Comes from word for “wrong” in French
– Civil wrong, other than a breach of contract, for which the law
provides a remedy
– Breach of a duty owed to another that causes harm
• Compensation for injuries wrongfully inflicted by the defendant
on the plaintiff
• Civil, not criminal law
• Law is determined in each state – rules vary.
• However, the basic principles are similar among all states.
• Remedies should place injured party in the position he/she would
have been in prior to the tort.
• Fear of tort action deters injurious behavior by others.
• Punitive damages punish malicious/extremely reckless behavior.
4. TORTS BASED ON NEGLIGENCE
• Unintentional careless conduct that creates an
unreasonable risk of harm to others
• Breach of duty of care
• Owed to the plaintiff
• Breach through an act or omission
• Causation (causal connection to the injury)
• Injury/Damages
• There can be a negligence action even if there was no
intent to do harm
• See “No Litigation Jackpots in New Zealand”: New Zealand has
common-law system, but abandoned tort for damages in personal
injuries. Replaced by Accident Compensation Corporation that pays
people injured in accidents under schedule like Workers’ Compensation.
5. Negligence: Duty of Care and the
Reasonable Person Standard
• The standard is how persons in the
relative community ought to
behave
• One must be reasonable at all
times, under all circumstances
• Not liable for everything – only
“unreasonable” acts
• Standard: “What a reasonable
person would do in same or similar
circumstances”
• Applies to professions –
reasonable CPA, MD, attorney, etc.
• See Squish La Fish v. Thomco
6. Squish La Fish, Inc. v. Thomco
Specialty Products, Inc.
• Squish holds patent on “Tuna Squeeze” (squeezes water or oil from
tuna cans); ProPack was hired to assist with store displays.
• ProPack brought in Thomco for advice on adhesive for the displays.
• Thomco said the adhesive would wash off; Squish relied on the
advice, but adhesive wouldn’t wash off.
• A Squish distributor was not happy with the situation; finally
cancelled its contract.
• Squish sued Thomco for negligent misrepresentation.
• District Court granted summary judgment for Thomco; Squish
appealed.
• Held: Reversed and remanded for disputed issues to go before the
trial court. There may have been reliance by Squish through
ProPack on Thomco’s representations.
7. Causation
• Causation between a party’s act & another’s injury.
• Cause in fact shows the person’s conduct is the actual cause of
the event that created the injury (some courts call this the “but for”
test [sine qua non rule]).
• Proximate cause indicates that the liability bears a reasonable
relationship to the negligent conduct.
• In some cases, case is so obvious, res ipsa loquitur (“the thing
speaks for itself”) applies.
• If consequences are too remote – no liability.
• If there is an intervening or superseding event/conduct – no
liability.
• Chain of events created by a party’s actions must be foreseeable.
• Some states replace proximate cause with substantial factor test
in bringing about the injury.
See Palsgraf v. Long Island RR Co.
8. “Extending the Concept of Negligence”
• Police were sure Timothy Pereira was at
fault in an accident.
• He was driving 85 mph in a 35-mph-zone
• Swerved into on-coming traffic
• Hit Christine Speliotis’s car head on.
• Later, Timothy’s 17-year-old cousin,
Brandon Pereira (injured in the
accident), sued Speliotis for negligence.
• Brandon claimed that collision would
not have occurred if she had gotten out
of the way!
9. Palsgraf v. Long Island RR Co.
(1928 Landmark Case)
• Palsgraf waits on the platform for a train; another train begins to
leave the station; man carrying a package runs to catch it; jumps
on the train; looks like he might fall.
• Guards help pull him up on train. He drops the package which
contains fireworks that explode
• Shock from the explosion causes scales located on the platform to
fall, injuring Palsgraf who sues RR for negligence of its employees
• Jury finds for Palsgraf; appellate court affirms; RR appeals.
• Issue: Is it foreseeable that the assistance by the guards would
cause Palsgraf’s injury through the falling scales?
• Held: No. Nothing in the situation would suggest such a result. RR
not negligent. No proximate cause. Case reversed and dismissed.
10. “Watch ME Dance!”
• Megan Zacher was with friends,
drinking at Calico Jack’s Cantina –
birthday celebration
• Calico had a “Shake It Like Shakira”
contest.
• Top prize of $250
• Zacher got on top of bar to dance (or
shake) and fell off.
• Suffered injury that required surgery.
• Zacher sued Calico for negligence.
• Her lawyer said bar owners should
have known the contest was
“dangerous and likely to lead to
injury.”
11. Evolving Changes in the
Law of Negligence
• Thompson v. Kaczinski (2009 case)
– Iowa adopted portions of Restatement (Third) of Torts
– Need not focus on ordinary duty of reasonable care – this duty is
presumed where there is risk of physical harm.
– Instead, court should “proceed directly to the elements of liability”
– Less reliance on proximate case – “has been a source of
significant uncertainty & confusion”
– Move also away from “substantial factor”
– INSTEAD, Restatement Third refers to the “scope of liability”
related to risks present in a specific situation.
– Court will use a “risk standard” to judge when liability is imposed.
• Changes are subtle and will take years to become
apparent in the working of tort law in the U.S.
12. Defenses To A
Negligence Action
• Assumption of Risk
– The injured party knew or
should have known of the
risk and voluntarily
assumed it.
– Complete bar to the
plaintiff’s case
• Contributory Negligence
– Plaintiff’s action
contributed to the injuries.
– Plaintiff’s case is
completely barred.
• Comparative Negligence
– Damages are reduced by
the % of injuries caused by
plaintiff’s own negligence.
– Pure Comparative
Negligence
– Comparative Negligence
50% Rule
• See McCune v. Myrtle Beach Indoor
Shooting Range”
• See Issue Spotter: “Effective Liability
Releases”
• See Exhibit 6.2: Terms of Effective
Liability Waiver
• See Test Yourself, p. 160
13. McCune v. Myrtle Beach Indoor
Shooting Range
• McCune played paintball at Myrtle Beach Indoor Shooting Range.
• Used protective face mask provided by the Range.
• Signed a liability waiver, releasing the Range from all known or unknown
dangers, with the exception of gross negligence on the part of the Range.
• She complained that mask did not fit well; restricted her range of vision.
• Mask caught on branch of a tree, lifting it off her face.
• She was hit in eye by paintball and blinded.
• Sued Range for negligence of not providing a mask that would fit better and
give her protection.
• Trial Court granted summary judgment in favor of Range. She appealed.
• HELD: Affirmed.
• Agreement was voluntarily signed that she 1) assumed the risks, known or
unknown and 2) she released Range from liability, even injuries sustained
because of Range’s own negligence.
• McCune voluntarily entered into the release of liability.
• This is not construed as an exculpatory agreement.
14. Why Many States Have 50% rule
under Comparative Liability
• Susan Wassell was visiting her fiancé north of Chicago
• At 1:00 AM, heard a knock on the door; didn’t see anyone;
thought it is her fiancé; opened door anyway.
• Stranger was there; asked for a drink of water; she let him in the
room and was sexually assaulted.
• She sued motel owners – failure to warn of high-crime area .
• Jury assessed damages at $850,000; but said Susan was 97% to
blame for the occurrence.
• Under comparative negligence, she was awarded $25,500 in
damages; she appealed.
• Held: Jury, not the appellate court, is the trier of fact and
determines damages; judgment affirmed.
• This kind of decision is why many states adopt 50% rule; jury
sympathy is strong even if plaintiff is really at fault.
15. INTENTIONAL TORTS AGAINST
PERSONS
• Establishing Intent
– Person knew what he/she
was doing
– Intent to do the act which
reasonably would result in
harm to the plaintiff
– Knew /should have known
the possible
consequences of an
action
– Willful misconduct
See Issue Spotter: “Dealing with
Drunks”
16. Intentional Torts Against Persons
• Assault
• Battery
• False Imprisonment
• Infliction of Emotional Distress
• Invasion of Privacy
• Defamation: Libel and Slander
• See Exhibit 6.3
17. Intent
• State of mind of defendant
• Person knew what he/she was
doing
• Person “knew, or should have
known, the possible
consequences of the act”
• Knowledge that certain
results would likely occur
• Willful acts invading protected
interests
• A reasonable person would
have known that the action
would create harmful
circumstances
18. ASSAULT
• Placing plaintiff in fear of immediate bodily injury
• Intent to act to cause a harmful or offensive contact
• Plaintiff has imminent apprehension or fear
• Fear: if a reasonable person under the same or similar circumstances
would have apprehension of bodily harm or offensive contact
• Direct threats? Usually an assault
• Pointing a gun? Yes
• Point a gun while other person sleeps? No assault
• Letter threats? No assault (“immediate” requirement usually not met)
• Phone threats? Maybe. How close is the caller? On a cell phone
outside the door or window?
19. BATTERY
• Unlawful “touching”
• Intentional physical
contact without
consent
• Use of fist, hand, or
kicking
• Use of weapons, i.e.
guns or stick
• Unwanted kiss? Has
been held to be a
battery
• Assault & Battery
often linked together
in a lawsuit
• Defenses
– Consent
– Privilege
– Self defense
– Defense of others/Defense of
property
• Most states have “stand
your ground” doctrines
• No requirement to retreat
• Allow force for force &
deadly force for deadly
force
See Fuerschbach v. Southwest Airlines
20. Fuerschbach v. Southwest
Airlines Company
• Fuerschbach worked as customer service representative for
Southwest Airlines at Albuquerque airport.
• Airline prides itself on being “fun-loving, spirited company”.
• After new employees finish probationary period, they are often
subject to a prank to celebrate the event.
• Her supervisor thought would be fun to set up a mock arrest.
• To help with the prank, two Albuquerque police officers came to
the counter, told her of outstanding warrants against her,
handcuffed her and told her she was under arrest.
• She began to cry, so officers took her to the back.
• All the employees jumped and yelled “Congratulations for being off
probation!”
• Handcuffs removed; little party began. She kept crying and was
sent home.
• Saw a psychologist who said she suffered post-traumatic stress
disorder.
(Continued on next slide)
21. Fuerschbach v. Southwest
Airlines Company, cont.
• Fuerschbach sued everyone connected with the event on
numerous grounds, including assault and battery.
• District court granted summary judgment for defendants and
did not allow the matter to go to trial.
• HELD: Reversed. Summary judgment vacated re: assault and
battery claim. She can go to trial.
• District court said officers “were courteous and professional.”
• Issue: Did the actions offend “a reasonable sense of personal
dignity”?
• HELD: Jury might be able to conclude that being handcuffed
and leading the person to walk fifteen feet offends a reasonable
sense of personal dignity.
• Police handcuffed her tightly – offensive contact.
• Note: Some other claims allowed to go forward; others denied.
The only claim against Southwest Airlines was a Workers’
Compensation claim because, under NM law there was no
intent by anyone to harm her at work.
22. “This Is a Real
Arrest!”
• Chicago police officers brought allegedly drunk driver to
hospital.
• Officers told Nurse Lisa Hofstra to draw a blood sample
– to measure blood alcohol level.
• She refused because, by hospital rules, someone must
be admitted to hospital before procedure is performed.
• Officer handcuffed Hofstra & put her into a squad car for
45 minutes.
• She sued Chicago Police Department for false arrest.
• Was awarded $78,000.
• Her attorney noted that “nurses work for hospitals and
not for the Chicago Police Department”
23. False Imprisonment
(False Arrest)
• Defense by businesses
regarding detention of
shoplifters:
– Restraint was in a
reasonable manner
– Restraint was in a
reasonable time
– Basis for the detention
was valid
See Forgie-Buccioni v. Hannaford
Brothers
• Intentional holding,
detaining or confinement
• Freedom to come and go is
restrained
• Restraint
– May be physical
– May be mental (i.e. through
verbal threats)
• Lawsuits often arise from
detention of suspected
shoplifters
24. Forgie-Buccioni v.
Hannaford Brothers
• Forgie-Buccioni went into grocery store; paid for items and left
• Realized he had bought wrong kind of Drixoral (cold med.)
• Left other items in his car and went back into store
• Told clerk he was going to exchange Drixoral and left the box he
had paid for on the counter
• Buccioni found box he wanted & picked up other items to buy
• Told different clerk that he had already paid for Drixoral and then
paid for other items
• Left store, but manager, Frender, went to parking lot and ask him
to come back to the store
• Said he had not paid for Drixoral
• Frender put Buccioni in store’s security room to discuss matter
and called police
• Officer arrested Buccioni. Charges later dropped. (Continued)
25. Forgie-Buccioni v.
Hannaford Brothers, cont.
• He sued for false imprisonment; Jury awarded $100,000.
• Hannaford Brothers appealed.
• HELD: Affirmed. Jury’s award was not grossly excessive.
• Under New Hampshire law, false imprisonment:
– 1) Defendant acted with the intent to restrain or confine
– 2) Defendant’s acts resulted in restraint/confinement
– 3) Plaintiff was conscious of and harmed by
restraint/confinement
• Jury could conclude that Buccioni was falsely imprisoned.
• Frender “kept pushing” Buccioni toward security room.
• Was not “free to leave.” Another store employee sat with him
30-45 minutes until officer arrived for arrest
26. Infliction of Emotional
Distress
• Intentional conduct: So outrageous, it creates severe mental or
emotional distress
• Petty insults, annoying behavior, bad language? Usually not
actionable; we must have “tough skin”.
• Bill collectors or landlords who badger, are profane, or threaten lay
the background for a lawsuit.
• EX: Louisiana court gave an award to a woman who found her
comatose husband being chewed by rats in a hospital
• See Reynolds v. Ethicon Endo-Surgery, Inc.
• See Issue Spotter: “Dealing With the Elderly and their Heirs”
• Refer also to “How Not to Teach Torts in Law School”
– Law student sues university for $5 million. Prof. used her as a tort demonstration.
Pulled her chair away from her as she was sitting. She fell & injured her back.
Claimed the incident was “outrageous, shocking & intolerable, exceeding all
reasonable bounds of decency.”
– See “Test Yourself”, p. 167
27. Reynolds vs. Ethicon
Endo-Surgery, Inc.
• Reynolds was sales rep. for Ethicon in 1999. In 2002 she was assigned to a
new division based in Sioux Falls, S.D.
• Company reviewed the sales in her territories and decided her region was
weak.
• A week after Reynolds told her supervisor, Burns, she was pregnant, he
met with her; said Sioux Falls office would be closed; offered her the
Louisville or St. Louis office or a severance package.
• Several weeks later, she suffered a miscarriage.
• Blamed the elimination of her position soon after she became pregnant for
the reason of her miscarriage.
• She refused to transfer or take severance package. Was fired.
• Sued Burns and Ethicon for infliction of mental distress.
• District court granted summary judgment for defendant. She appealed.
• HELD. Affirmed.
• For infliction of emotional distress, conduct must be “so outrageous in
character, and so extreme in degree, as to go beyond all possible bounds
of decency . . . atrocious, and utterly intolerable in a civilized community.”
• While termination may be upsetting, it does not constitute extreme or
outrageous conduct.
28. Invasion of Privacy
• Infringement on a person’s right of solitude & freedom
from unwarranted public exposure
• Use of a person’s name or picture without permission
• Intrusion on solitude (i.e. wiretap)
• Placing a person in false light (publishing a false story)
• Public exposure of private facts (debts, drug use)
• Defenses
– Right of privacy waived by public figures, politicians,
entertainers, sports personalities, etc.
– Information about an individual taken from public files or
records
• See James v. Bob Ross Buick
29. James v. Bob Ross Buick
• James worked at Mercedes dealership owned by Bob Ross
Buick. In 2002, he was sales rep. of the year. In 2003 no sales
reps. met established quotas. In 2004 he was fired.
• After firing, Buick company sent batches of letters to
customers who had worked with James. Letters encouraged
them to shop for Mercedes.
• Letter addressed as if they were from James. Administrative
assistant at Bob Ross signed James’s name to the letters.
• James sued for misappropriation of his name, a form of
invasion of privacy.
• Trial Court: Summary judgment for Bob Ross. James appealed.
(Continued on next slide)
30. James v. Bob Ross Buick,
cont.
• Forgery of signature is a variant of tort generally known as invasion
of privacy.
• Mere incidental use of a person’s name or likeness is not actionable.
• Can’t object to mere mention of name or appearance brought before
the public when they are open to public observation.
• Appropriation occurs when there is commercial benefit of value from
the use of the name or likeness.
• HELD: Reversed and remanded.
• This is not mere incidental use of James’s name.
• Batches of letters sent out to former clients of James.
• Had commercial value – letters induced sales for the dealer.
• Monetary benefit that Bob Ross received as a result of appropriating
James’s name can be a part of the actual damages to him.
• James may seek nominal, compensatory, and punitive damages, if
appropriate.
31. Defamation
(Libel/Slander)
• Definition: An intentional false communication that injures a person’s or
company’s reputation or good name
• Elements of the Tort:
– False or defamatory statement
– Published or communicated to a third person
– Causing harm or injury to the plaintiff
– If person who has false statement said TO THEM, then tells a 3rd party:
“Self publication” and no tort.
• Defamation per se: Presumption of harm
– No proof of harm/injury is necessary
– Examples: person has committed a crime; has a sexually
communicable disease; carries out business activities improperly; use
of highly derogatory, descriptive language, name-calling, etc.
– Workplace Defamation: Info. given re: job performance or info. spread
within business unnecessarily about an employee
• See Issue Spotter: “Say Good Things About A Good Employee?”
• See “Noel v. River Hills Wilsons, Inc.”
32. “Tort Liability for Internet
Servers”
• Q: If Internet users are involved in illegal
activities, are the Internet servers liable?
• A: Generally no, as long as they were not
aware of it or had reason to be aware of it.
• In Zeran v. America Online: AOL not liable in
tort for defamatory message that AOL user
sent. Sender is liable.
• Doe v. Cahill: When defamatory statements
are posted, victim of the statements has a
right to obtain the identity of the party who
sent the material (here Doe, is the
anonymous defendant).
33. Defenses to Defamation
• Truth is a complete defense in some states
• Absolute privilege is an immunity
– Legislators in committee sessions
– Participants in judicial proceedings
• Conditional privilege eliminates liability if the false statement
was published in good faith.
– If there is no malice
– In order to protect a person’s legitimate interests
• Constitutional privilege
– Members of the press may publish “opinion” about public
officials, figures, or those of public interest if there is no
actual malice (“absence of malice”)
See “Libel in Foreign Courts” (U.S. communications companies sued in
U.K. which does not allow news media extensive privilege)
See Test Yourself, p. 174
34. Noel v. River Hills Wilsons, Inc.
• Brandon Noel was working in temporary position at GTE.
• Filled out background questionnaire for permanent position (2000)
• It asked regarding criminal convictions.
• He wrote that 6 years earlier he was convicted of a felony
– “Aiding and abetting – but not fully involved” and received “parole-
probation to youth authority.”
• GTE hired ChoicePoint (CP) to do background investigation.
• It contacted Wilsons where Noel worked briefly in 1999.
• Santillan, a Wilson’s manger, told CP that Noel left due to “loss
prevention issues” and that his “rehire status” was “unfavorable.”
• CP reported info. & its result of its criminal background search.
• Found convictions for carjacking; 3 counts of attempted armed
robbery; 2 counts of exhibiting a weapon other than a firearm; 2
counts of residential burglary; and 4 counts of robbery.
• Noel was in juvenile prison from 1995-99.
• GTE gave Noel copy of the CP report and fired him . (Continued)
35. Noel v. River Hills Wilsons, Inc., cont.
• Trial Court granted summary judgment to defendants on grounds of
privilege. Noel appealed.
• Defamation is false and unprivileged publication. (here, slander.)
• Conditional privilege is defense if statements made without malice on a
subject for “mutual interest. . . .”
• Former employer may properly respond to inquiries from potential
employers re: individual’s fitness for employment “if it is not done
maliciously” . . . “then such a response is privileged. . . .”
• Malice is not in the communication itself.
• “Actual malice” is when publication is motivated by hatred or ill will towards
plaintiff, OR
• Lacks reasonable grounds for belief in the truth – actions that are “in
reckless disregard of the plaintiff’s rights. . . . “
• HELD: Affirmed. No malice here.
• Santillan gave inaccurate employment information – careless blunder, by
paying insufficient attention to CP’s inquiry.
• Employers’ silence policies arrest the flow of positive as well as negative
info. that creates the risk of being sued.
• Policy: Job seekers should benefit form information flow.
