DEFAMATION Interest to be protected: Reputation of plaintiff Countervailing interest: First Amendment free speech and press Elements of a cause of action: I. Defamatory words A. Originally communication that holds P up to hatred, contempt or ridicule or causes P to be shunned or avoided. B. Now broader test: diminish respect, goodwill, confidence or esteem, or excite adverse or unpleasant feelings about P. C. Examples: list several from cases C1. Emotions of the moment, would public realize that it is exaggerated. D. Jury question that may change w/ time location or custom (ex: communist, sexual charges). E. Not a right thinking or reasonable prudent person test, Lets call it a some people test – enough if a substantial number in community think communication is defamatory. F. Should relate to a matter of fact and not mere opinion. But merely appending statement “in my opinion” does not save a statement that is based on fact. G. Incremental Harm Doctrine – Not generally accepted, but some states may adopt it. It basically bars Charles Manson from collecting for defamation because his reputation is already bad. H. When there are quotations there has to be a material change in the meaning of the words in order to find defamation against the speaker. II. Publication to a third person (must be done intentionally, or negligently) A. Any understandable communication to a 3rd person. B. 3rd person must be able to understand defamatory meaning (children, language). C. One officer to another in corp. counts but mere stenographer (tool) does not (western union telegraph). D. Single publication rule – one edition of newspaper, book, tv show. E. Re-publisher (media) also liable E1. Secondary publisher (one who distributes content) is not liable unless intentional. E3. Any repetition of defamation is considered defamation, even if the re-publisher attributes the statement to the original source. E2. Failure to remove can also make liable based on a reasonable standard after discovery of it. F. Publication in written form, it is libel 1. Libel includes publications in more permanent form such as signs, pictures, movies, tv shows, Internet postings (watch for inducement on internet posting, people may not take it as fact) 2. Libel requires no special damages G. Spoken publication is slander – special damages required GII. Factors to consider in determining if libel or slander 1. Permanency 2. Breadth of dissemination
G1. Some states have passed statutes that make any broadcast defamation automatically slander and not libel. H. Slander per se does not require special damages 1. Imputations of a major crime 2. Loathsome disease (AIDS?) 3. Business, trade, profession 4. Serious sexual misconduct – no longer standard III. Inducement If not defamatory on its face, plead additional circumstances that show the defamatory meaning Ex: he ran up clothing expenses on his hotel bill needs a description of why that’s defamatory Ex: He lives at Corcoran (plead that’s a state prison) IV. Colloquium – words spoken were “of and concerning” P A. Description ok, name not needed (“the old dictator, the old colonel”); Reasonable person would understand the statements refers to the P B. Where statement defames a group: 1. Large group – none can sue 2. Small group (25?) and each member referred to – all can sue (examples) 3. Small group and less than all referred to – may be actionable depending on the facts V. Innuendo An allegation of the particular defamatory meaning conveyed by the words VI. Damages A. Damages implied or presumed since reputation is assumed to be good B. Punitive damages possible C. Special damages – a pleading of actual damages from the defamations, required in slander and certain public person / public content cases D. Damages must be a result of the harm to reputation VII. Special constitutional requirements A. First amendment to constitution requires special protections, especially for media defendants and public concern speech B. These are carried out by altering the elements or burdens or damages in P’s cases VIII. First amendment cases A. If P is a public official or public person 1. Actual malice is required – showing D knew statement was false or had reckless disregard (substantial doubts) to truth or falsity 2. Also P picks up additional burden of showing falsity of statement 3. A public official is essentially a governmental official 4. A public figure is one who has greater access to media and/or has voluntarily (occasionally involuntarily) thrust self into public eye. (examples); What is the person’s access to the media? Has the person assumed any risk of defamation? 5. Can be public person for limited purposes 6. Private P may pick up these additional burdens also where speech is of “public concern” (defined by form, content, context)
7. Presumed/punitive damages not allowed for public person or concern w/o showing of actual malice. DEFENSES AND PRIVLEGES Truth is an absolute defense – even though damages may be done to reputation, freedom, to speak truth prevails Substantial truth is sufficient (examples) Burden shifts to P to show falsity in public figure/person/speech cases Privilege to speak defamatory words in judicial and legislative proceedings and between spouses There are qualified privileges for public officials in their public responsibility or fair reporting/comment privilege
1st Amend. Tools
Fault Truth
Public Officials and figures/Public Concern Actual Malice Burden on Plaintiff to show that it is false
Private Figure/Public Concern Negligence Burden on Plaintiff to show that it is false (at least when there is a media defendant) Allowed only with Actual Malice
Private Figures/Private Concern No fault needed? Strict Liability Burden on Defendant to show that it is true
Presumed and Punitive damages
Allowed only with Actual Malice
Allowed
IV.
PRIVACY A. Appropriation 1. Unauthorized use of P’s name or likeness for money: A. Rule: in order for there to be liability, plaintiff’s name or likeness must not be newsworthy. If it is not newsworthy, then must be for commercial gain. “Commercial gain” = advertisement; Newsworthy = no liability unless “commercial gain” B. Use of a person’s name – No appropriation COA if the use is newsworthy and is not used for advertising. Rationale Concern with restrictions on speech; do not want to punish or chill truthful speech. C. The unauthorized use of one’s photograph in connection with an advertisement or other commercial enterprise gives rise to a COA. Must be a commercial use. If in media, usually an advertisement.
D. Analogous to intellectual property (property that cannot be touched, ex. of the mind) or copyright. E. In a media context, photo is newsworthy and not appropriated due to a 1st amendment concern unless it is in an advertisement. F. HYPOs: Nephew of the Kennedy’s on trial for rape. Shown on TV. Alleged rape victim testified, blue dot over her face on TV. Suppose National Inquirer printed a photo of her face. Suggested that this would be OK (not an appropriation) b/c not part of an advertisement. Newsworthy; not an ad so no privacy action here. However, newspapers are a commercial business. 6-year old shoots his classmate. National Inquirer prints a story that sells millions. Commercial appropriation action? Probably not because 1st Amendment news issue rights. Would probably be an appropriation if it was an advertisement. *Point: always looking at possibility of money advantage. G. Zacchini Exception: 1. In cases of media showing a performer’s act. 2. If entire performance is shown, then the newsworthy defense does not apply. Allow him to recover even though newsworthy b/c if people can see it on the news then might not go watch his show. H. Two types of appropriation claims: (1) Right of Publicity → focus on commercial value; (2) Right of Privacy → focus on dignity -humiliation (right to have control over use of your picture) (3) Both 1 and 2 Remedies: (1) commercial value; (2) emotional distress damages; and (3) nominal damages. HYPO: Nike Ad Campaign 1st photo is of a hoop game at the field house featuring P getting his shot rejected. 2nd photo is of a pro hoops player. Neither gave permission to have photo used. Value in picture of pro hoops player (Face recognition) – lose commercial benefit. Right of publicity – Value inherently in his image. Commercial value? Find comparable K’s and see what they get or look at how much he got for endorsements in the past. P has damages that pro player doesn’t – Humiliation Right of privacy – Where damages other than commercial value. Dignatory sense that picture should not be used w/o permission. Embarrassed to have a national magazine show how bad a basketball player he is. I. Parody of an advertisement is not an appropriation, even if on the front page. A parody is not for commercial purposes. 2. Causation: (CIF & PC) 3. Damages: 3 types
A. Nominal damages (monetary → right of publicity action) 1. Not enough in right of publicity claim b/c likeness has already been appropriated & want value of image back. 2. Mitigates damages in right of privacy claim. 3. EX: D appropriates P’s likeness by accident (mistake). Discovers and apologizes. Only nominal damages allowed. 4. Usually can recover more than just nominal damages. B. Injunctive relief: 1. Allowed in appropriation cases; must stop using my name or likeness without my permission. 2. Not mutually exclusive w/ dollar damages 3. EX: Prohibit Nike from distributing advertisements. C. Other types → Privacy Action 1. Ex. humiliation; emotional distress D. Split in type of $ damages: (1) If commercial value to likeness (ex. someone famous or attractive) → out of pocket damages; OR (2) humiliating or embarrassing, but not necessarily commercial value though. E. HYPO: Suppose a car dealer hires an actor to do an ad w/a Jimmy Stewart voice. During the ad, he never says “this is Jimmy Stewart.” Assuming Jimmy Stewart is still alive does he have a claim? Depends on the circumstances. Does not have to be a physical likeness → can be a voice likeness. But, there is no claim if there is a disclaimer stating that the voice is an impersonator. B. Intrusion [upon the seclusion of another - natural right to be left alone] 1. Elements: A. Unreasonable intrusion on the seclusion of another: 1. Sphere of seclusion/privacy – Where a “reasonable” person would expect the area to be protected (broad standard) expectation of privacy is intruded upon. Ask: whether a sphere where person has a objective reasonable expectation of privacy that has been invaded? 2. Occurs when D obtains info about P by improperly intrusive means. 3. Publication can also be an invasion of privacy. Defense: Publication of matters of general public interest. Publication is not an issue in an intrusion action. Do not need to have a publication of anything for an intrusion action (unlike other 3 types of privacy actions); Focuses on act that is intrusive → “sphere of privacy” invaded Often types of privacy claims may over lap, such as appropriation and Intrusion (ex. taking nude pictures of someone in the shower and selling them) 4. HYPOs Suppose you go home and find Cupp in your living room. [Intrusion on the seclusion] Suppose you lend Cupp a dollar. A few weeks go by, you keep calling Cupp 25 times a day in an attempt to get the money. [Intrusion on the seclusion – Not a physical sphere, but have a reasonable expectation that won’t be harmed by constant ringing of telephone; Offensive in regard to
$1]; unrx harassing telephone conversation → invasion of privacy b/c have a rx expectation to be left alone. Suppose the calls are more spread out (once a week). [Not an unreasonable intrusion] Photographer takes a picture of Cindy Crawford walking down a busy street. [NOT intrusion on the seclusion b/c one does not have a reasonable expectation of privacy on a busy, public street.] Suppose photographer takes a picture of Cindy in a remote, public place in Montana? [Intrusion on the seclusion b/c one has a rx expectation of privacy in a remote public area.] Note this privacy tort overlaps the least with the other ones. B. Highly offensive to a reasonable person: C. Causation (CIF + PC) D. Damages C. Public Disclosure of Private Facts: 1. Elements: A. Public disclosure of private facts: 1. “Facts” – dealing with the truth. Statements must be true. 2. Facts must be private (private matter only). i. A person entrusted by another with confidential information may owe that other an obligation not to disclose the info to 3 rd parties. 3. Info in public records are not private facts. 4. If have a publication go to → PDPF or appropriation B. Highly offensive to reasonable person: 1. Public figure – Can a public figure bring an action for something that is true even if highly offensive? The court leaves this question open. Constitutionality of this COA is subject to challenge. Supreme Ct. may later rule that it is never unconstitutional b/c we are dealing with true facts (protected by 1st Amendment rights). HYPO: Dog sitting for Cupp. Notice a collection of Milli Vinilli & New Kids on the Block CDs. Share this info to classmates. Public disclosure of private facts? Although embarrassing, it is not highly offensive to a reasonable person. C. Not a matter of public concern D. Causation: (CIF + PC) E. Damages Note: actual malice standard never applies b/c dealing with true facts, so P could not prove they were false.
D. False Light [Publicity which unreasonably places another in a false light before the public] 1. Elements: A. Placing P before the public in a false light: Where P is a public figure, actual malice standard is applied. Calling someone poor is not a disparaging statement.
Parodies – Does not place someone in a false light b/c communication is making fun (a joke). Obvious parodies do not even imply an assertion of fact. Note: false light is similar to defamation, so anytime talking about one almost always talk about the other one too! HYPO: Biff is a war hero & is distinguished for his valor. D makes a movie about Biff’s life & includes a false romance to spice up the movie. False light? Yes, b/c there is a misrepresentation of one’s life. No defamation b/c there is no disgrace. HYPO: Picture of honest taxi-driver in a paper next to story about dishonest taxi-drivers. There is false light b/c there is a false impression given that he is dishonest. No appropriation b/c although likeness is used it is associated with a news story & not an advertisement. No PDPF b/c not actually disclosing facts about him. Also, a possible defamation action here b/c probably most people will conclude he is ripping people off. *Point: can usually plead (win) both defamation and false light. B. The false light would be highly offensive to a reasonable person: HYPO: Suppose movie includes some factual inaccuracies (says that P was enlisted for 3 years when it actually was 5 years.) There is no false light, b/c it is not highly offensive to a reasonable person. Relatively minor discrepancies here. Cantrell case: P was falsely called poor in a magazine article. Falsely being called “poor” is highly offensive → false light. Note: It is not defamatory to call someone poor or to be poor b/c it is not disparaging (not disgraceful). C. Actual malice or possibly negligence in some cases: If public official or figure → actual malice required Possibly negligence – If client is a private figure, should not have to show actual malice. No public interest & not a public figure. Should not be a higher standard than in defamation. Probably all the Constitutional protections that exist for defamation will apply to false light too, but it has not been determined by the Supreme Court yet. However, there is a solid theory that Ct. will deal w/constitutional framework for false light in the same way as defamation. (*Take defamation chart and lay it onto false light claim under the 3rd element). “Knowing falsity” can also be shown Note: some jxs do not allow false light claims at all. D. Causation: (CIF + PC) E. Damages 2. Coupled Tort (False light & defamation): A. False light seems easier to prove. B. Disparaging comments: usually can plead both C. False light: Highly offensive is enough (even if stmt is nondisparaging) → Need not be disparaging. D. Problem is constitutional concerns E. False light has practical importance for statements that are not disparaging, but still highly offensive.
F. Most false-light cases will involve disparaging cases, so there is overlap with defamation. 3. False light scenarios (Four situations where non-disparaging & highly offensive): A. False claims about one’s private life (e.g., involved in a romance) Not disparaging, but offensive. Ex. of false stmt: what if Prof said Facchetti had an affair with Cindy Crawford, but he didn’t really. Is it highly offensive? It may not be defamatory on its face, but to have something so intimate of your life manufactured might be. B. False claims about deeply personal thoughts and emotions (e.g., passionate about field mice) Highly offensive if false. May not be def. on its face, but may be highly offensive for people to know about your personal thoughts C. False claim portraying P as a victim. May not be defamatory, but may be highly offensive. D. Falsely describing to others virtues that P has not earned. Fear that hearers will think that P has inflated his attributes. May not be disparaging, but may be highly offensive. I. STRICT LIABILITY (SL) A. Traditional Strict Liability Elements: (*always plead both Neg. & Trad SL) 1. Activity giving rise to SL (some animals, non-natural use of land; and abnormally dangerous activities) 2. Cause in fact (but for causation or substantial factor) 3. Proximate cause of the type of harm that makes the thing or activity dangerous; 4. Damages B. Activities Giving Rise to Strict Liability: 1. Animals of some types (wild animals; determined by species) Two Categories: 1) Wild Animals 2) Domesticated Animals with known dangerous propensities 3) Trespassing Animals a. HYPO: Sea World captures a killer whale to train. Whale bites diver’s hand. Diver sues for loss of arm. Why SL? Wild animals are volitional beings that cannot be easily controlled. Minority Exception to wild animals shown to public; Don’t apply SL to wild animals displayed to public. b. Trespassing Animals 1. SL for (domesticated) barnyard animals if they trample on neighbors’ property. 2. If Barnyard animal, SL applies 3. Ex. cow, sheep, pigs, horse, etc. 4. DOES NOT APPLY to cats & dogs. ??? c. Dangerous Animals
1. CL & Majority Rule SL is imposed for Wild Animals Even if the wild animal is considered domesticated (ex. Shamu) 2. Minority Rule: If have a wild animal in captivity, the owner must use extreme caution std instead of SL std 3. The owner of a domestic animal such as a cat, dog, sheep or horse was subject to SL only if the owner knew or had reason to know that the animal had dangerous propensities. If do NOT know that the domestic animal has a dangerous propensity, then held to a Negligence std instead. 4. Classifications Problem “Wild v. Domestic Animal” i. Customs of the community influence the determination (elephant in India v. England). ii. If the owner knows or has reason to know that a domestic animal has dangerous propensities, this is sufficient to classify that animal with wild ones and SL is imposed. Otherwise P must prove negligence in order to recover. iii. Some animals could be classified as either; different jx handle it differently; ex. bees, rats, pet tarantulas, etc. iv. ASK: 1) Is it an Animal? 2) Is it a Wild or Domesticated Animal? 3) Does the Animal have a known dangerous propensity? 5. Liability for dog bites i. No “one bite” rule generally. One Bit Rule: BAD! An animal can have dangerous propensities even though it has never bitten anyone. E.g., train dog to attack humans. It does not distinguish b/w vicious vs. known dangerous propensity. An animal could be vicious, but it is not known yet ii. Some jx (ex. CA) have done away with the known dangerous propensity for DOGS only (treat dogs as wild animals instead) 1a. Non-Natural Use of Land A. If a person brings on to his land something that is likely to do mischief, or if he uses his land in a non-natural way, that person will be SL for any damage caused to others. 2. Abnormally Dangerous Activities – There is a substantial risk of harm, no matter how much care is exercised. A1. RS1 – Ultra Hazardous – 3 Elements Ultrahazardous to others Risk not eliminated by due care Not a matter of common usage A. A person is liable for the results of bringing on his land something which (though harmless while it remains there) will naturally do mischief if it escapes out of his land. B. 6 Factors to Consider: Whether An Activity is Abnormally Dangerous (RS 2) 1. Inability to eliminate risk by using due care Inability to eliminate the risk of the accident by the exercise of RX care. “Super” due care as an alternative standard
Could not be prevented by the exercise of due care Criticism You are either RX or you are not. 2. Degree of risk in the activity Likelihood that the harm that results from the activity will be great. What is the Probability of harm? If probability is great, more likely to be held SL 3. Gravity of the potential harm Existence of a high degree of risk of some harm to the person, land, or chattels of others. Greater the gravity, more likely SL 4. How common is the activity Extent to which the activity is not a matter of common usage. (E.g., Of common usage includes automobile, transmission of electricity & natural gas). Reflective of a collective judgment of its importance or utility. Common activities are not ordinarily perceived as abnormally dangerous. (more common, less likely SL) Ex. Driving: a common activity, even if it is very dangerous Can NOT file SL Claim for Auto Accident, only a Neg. Claim Often means that it is technologically impossible to render less dangerous. 5. Appropriateness Inappropriateness of the activity with regard to the location in which it takes place. If takes place in an inappropriate place, more likely SL A hot air balloonist in a crowded city is not OK, but in New Mexico it may be an OK location. Building one’s house between the runways of an airport. 6. Utility of the activity to community in relation to its risk(s) Extent to which its value to the community is outweighed by its dangerous attributes. If low social utility, may impose SL C. CAN PLEAD BOTH NEGLIGENCE & SL. D. Causing: Causation In Fact: Look at the harm resulting from that which makes the activity abnormally dangerous SL does NOT require Fault (unlike Negligence) *Proximate Cause: of the type of harm making the animal or activity Dangerous Type of harm must be one of which is a known dangerous (ex vicious) propensity. Ex. a large dog who jumps on someone with friendly intent or innocently knocks someone over vs. a dog who bites someone E. Damages F. Limitations on SL 1. Abnormally sensitive activity by P A. D will not be liable for his abnormally dangerous activities if the harm would not have occurred except for the fact that P conducts an “abnormally sensitive” activity.
B. Harm must be of the type that makes the thing or activity dangerous 1. Blasting that causes mink to kill young D not liable. If D knew that blasting would cause mink to kill young, and D intentionally made a big blast, then may bring a negligence COA or trespass to chattel or nuisance. 2. Vicious dogs Dog chases man. Man breaks his arm while trying to climb on his car. Arguable that this harm is foreseeable, sufficiently related to viciousness of a pit bull. Or, court could go the other way. Pit bull is trotting down the street. Dog accidentally bumps into someone & injures them. Is the owner of the dog liable? NO, because this is not the kind of activity for which a pit bull is known to be dangerous. But what if the dog had a habit of knocking people over? Yes, then the harm is what the dog is known for. A big dog wants to lick everyone in the face. The dog jumps on someone and breaks the person’s hip. Is there SL? YES, a big dog jumping on someone’s chest is dangerous. The owner is on notice. C. Harm is foreseeable, but the manner in which harm occurs is not 1. Act of God The intervention of an “Act of God” is often enough to relieve D of SL. Example: D owned a hydroelectric plant. The water escaped onto & flooded P’s land in a hurricane. P pleads negligence & SL. The court denied SL because the flood was plainly beyond the capacity of anyone to anticipate. Is the harm what you would fx expect that makes the activity dangerous? 2. Intervening natural acts and other intervening acts which are not reasonably foreseeable are a superceding cause and relieve D of liability including SL. G. Affirmative Defenses: 1. P’s Contributory Negligence: NO DEFENSE in SL cases A. Ordinary contributory negligence by P will usually not bar P from SL recovery. Having both contributory negligence & SL does not make sense. Contributory negligence says that both parties are negligent. B. Exception. 1. Assumption of risk Court focuses on whether the incident is “highly foreseeable,” before assumption of risk. Two Elements: 1. P subjectively knew the risk & 2. P voluntarily encountered the risk & Did P unreasonably subjected himself to the risk. Traditionally a complete defense to SL D claims that P assumed the risk Rule: it must be a truly substantial risk; not just a background risk (i.e. sometimes airplanes or cars crash) P can claim he is really stupid and did not realize and that is OK b/c P must subjectively assume the risk
Hypo: Can a person claim that you assume the risk of the possibility of danger when you are around a dog or a horse b/c they do sometimes bite NO, b/c one must know the PROBABLE consequences of his act to have brought the injury upon himself 2. Comparative Negligence: applies to SL claims in most jx that apply it II. PRODUCTS LIABILITY (PL) 3 Types of Causes of Action: 1) Negligence 2) Warranty 3) SL in Tort 3 Types of Defects: 1) Manufacturing: Oops case. Product that comes out differently than mfr planned (ex. planned to tighten nut on tire, but forgot) Only one of their products is defective. 2) Design: Product came out exactly the way mfr wanted, but mfr made a defective choice in the way they developed the product (“Conscious Design” made on how to design product) Ex. knew that they could put a rollover bar on car, but chose not to Entire product line is defective. 3) Warning: (a) Seller did NOT give a warning associated w/ product; OR (b) Seller gave a warning, but it was inadequate warning. One can plead all 3 causes of action at same time (9 possible) A. Elements of major products liability causes of action 1. Negligence One who negligently manufactures a product is liable for any personal injuries proximately caused by his negligence. Focus on the reasonableness of the manufacturer’s actions. A. Duty: 1. Whether the product was “reasonably certain to place life and limb in peril when negligently made.” 2. Owed to any “foreseeable” P. May be brought even without privity. P can always sue the mfr even if no privity of K 3. Direct Privity: MC or RC (i.e. C bought product from M or R) 4. Vertical Privity: MRC (C has K with R; in chain) 5. Horizontal Privity: C Friend (F does not have a K w/anyone; not in chain at all; 3rd parties) if hurt by product in a rx fx manner, can recover B. *Breach: must be a defect in the product 1. Manufacturing defects Simple negligence test (reasonableness test) Malfunction Theory: Basically Res ipsa loquitur (but courts do not call it that) against the manufacturer. If the error is usually something that does
not occur w/o neg. ?? (defect). That in and of itself is circumstantial (indirect) evidence sufficient to prove a defect existed. Problem is proving exclusive custody or control. Used particularly in mfr. defect cases. Dealer who buys from reputable supplier/manufacturer w/no reason to anticipate that the product is dangerous need make only a cursory inspection of the goods to avoid liability for manufacturing defects. 2. Design defects Risk Utility AKA Learned hand test. Balancing the burden of prevention w/the foreseeability of harm. P must show that those designing the product knew or should have known of enough facts to put a “reasonable” manufacturer on notice about the dangers of marketing the product as designed. Reasonableness of Seller’s actions (focus on Seller) 3. Warning defects Risk utility C. Causation (CIF & proximate cause) D. Damages E. Affirmative Defenses: 1. Comparative Negligence 2. Contributory Negligence 3. Assumption of Risk 2. Warranty: 3 Types (Express, IWM, & IWFPP) A. Express warranty: 1. Express warranty i. Need not be formal document (e.g., advertisement) ii. May be oral or written communication (e.g., from retailer) iii. May be a picture or sample (e.g., picture of a man wearing a helmet while riding a motorcycle). iv. Can be any communication v. Distinguish between express warranty and mere “puffing”. If personal injury “puffing” is rarely considered a defense vi. If make a promise keep it & if make misrepresentation liable 2. Part of basis of bargain 3. Breach 4. Damages 5. Notice 6. Horizontal privity – Neighbors, bystanders, family, etc,. No direct OR vertical K privity required B. Implied Warranty of Merchantability Only warranty COA that requires a defect. **ELEMENTS** 1. Seller as a “Merchant” i. Business person engaged in 1) regular sales of 2) that type of product ii. Regular pattern; not one time transaction; at least occasional iii. Includes every seller in the chain of distribution. 2. *Product unmerchantable at time of sale NOT fit for its
ordinary purposes. Merchantable: fit for ordinary purpose for which good sold Fit for ordinary Purpose: test used depends on type of defect being alleged: (1) it fulfills consumers rx expectation; OR (2) Risk/Utility Even if you were as careful as you could be, still may be liable Must be a defect in the product: i. Manufacturing defects: 1. Consumer expectations (Rest. 3d: differing from manufacturer’s intended design. Look at expectations of a reasonable consumer (not specific consumer) Factors: Other manufacturer’s products, price, compliance with gov’t regulations. (Hypo in Notes 1/18) ii. Design defects: 1. *Risk/Utility (trend, not nec the majority though) Focus on: Reasonableness of Product 2. Consumer expectations iii. Warning defects: 1. *Risk/Utility 2. Consumer expectations 3. Causation (CIF and PC) 4. Damages 5. Notice i. Requires that all parties claiming a breach of warranty must “within a reasonable time after he discovers or should have discovered the breach of warranty notify the seller or be barred from any remedy,” regardless of SOL. ii. Courts have largely ignored notice requirements b/c it makes it too difficult for Ps to recover; Sometimes say, “timely notice” = SOL. (Notice Not always required) iii. Waiver: limitation of remedies; limit Seller’s ability to use them RULE: Seller may have a property waiver, but it will be unconscionable if Seller tries to limit personal injuries in waiver iv. SOL: begins running when Seller sold product (Date of Sale) whereas, in Neg & SL in Tort: starts running at date of injury (so given more time than Warranty) Note: in CA get 1 yr from date of injury for all 3 6. Horizontal privity (extending warranties to certain 3rd parties) Three jurisdictional approaches: i. Alternative A (Majority) Extends to any natural person who is in the family or household of the buyer or who is a guest in his home. (most restrictive approach) ii. Alternative B Any foreseeable P, but only for personal injury. iii. Alternative C Any foreseeable P, for personal injury & property damage.
C. Implied Warranty of Fitness for a Particular Purpose 1. Knowledge of Particular Purpose by Seller i. Seller must subjectively know of some particular use (planned) to be used by consumer for a particular (unusual) purpose. ii. Seller does not have to be a Merchant for this COA. 2. Reliance by Buyer on Seller’s Skill & Judgment i. Buyer subjectively relies on the seller’s skill and judgment in purchasing & using a product for a particular purpose. 3. Product Not Fit for Particular Purpose: Particular = unusual use. i. It can be a one time transaction! ii. Could sell something fit for ordinary purpose (i.e. walking), BUT not fit for particular purpose (i.e. hiking in the Alps) iii. Usually D’s are Retailers; not Manufacturers 4. Causation (CIF and PC) 5. Damages 6. Notice 7. Horizontal privity HYPO: Shoe salesperson knows buyer plans to go mountain climbing. If boots are made for flat ground, but the seller says that they are good for mountain climbing, then COA is available, b/c P relies on D’s assessment that they are for the particular purpose of mountain climbing. D. Waivers of warranties are typically invalid if: 1. The product is a consumer good 2. The disclaimer goes toward waiving personal injury instead of property injury. b/c strong presumption of unconscionability; 3. Strict Liability (SL) in tort (402A) Focus on the dangerousness of the product. Subsequent remedial measures: (D redesigning or repairing product after the accident occurred) are admissible as evidence in SL actions b/c not asking about the reasonableness of manufacturer. Applies to all types of products 3 approches: 1. General Rule: in most jx P cannot enter evidence of subsequent remedial measures (product improvements) taken by D to prove product is defective. 2. Some Jx: If SL in tort will allow it as evid., but not for Neg. 3. CA Approach: will let evid in, in the 3 types of PL cases, but not in other cases. A. “Seller” regularly engaged in business of selling that type of product 1. Engaged in the regular sales of that kind of goods. 2. SL is imposed only on one who supplies a product, not to one who is primarily performing a service. B. *Product in Defective Condition Unreasonably Dangerous Must be a Defect in the product even if careful in making it A product that is dangerous by its nature does NOT count (Beer)
1. Manufacturing defects P must prove that the product deviated from the seller’s design or from the seller’s other products of the same design (not what specific conduct of the manufacturer led to the defect). i. Consumer Expectations Test (Rest. 3d: differing from intended design) ii. Possible defense: Defect was not present when it left the assembly line, but was introduced by someone else who later altered the product. 2. Design defects: conscious design-entire product line challenged Four (4) Jurisdictional Approaches: i. *Risk/Utility – Focus on: the reasonableness of the product (not the reasonableness of the manufacturer). Balancing Test: risk/benefit or cost/benefit If bad outweigh good, defective Utility of product to the user and the public as a whole Likelihood that the product will cause injury, and probable seriousness of the injury. *Reasonable Alternative Design: most jxs require you give them a better way to design product If rx alt. design, defective (ex. Is it a rx decision to make the car w/o a roll bar?: if no, defective) Availability of a substitute product meeting the same needs. Manufacturer’s ability to eliminate the unsafe character of the product w/o impairing its usefulness or making it too expensive to maintain its utility. User’s ability to avoid danger by the exercise of care in use of the product. User’s anticipated awareness of the dangers inherent in the product. Feasibility of spreading the loss by adjusting the price of the product or carrying liability insurance. ii. Wade-Keeton Risk/Utility – Impute knowledge of the risk such that if it was known at the time of trial, then it was also known at time they sold the product, even if didn’t really know then. Pretend S knew of all the risks when made product For most cases, W-K won’t make a difference in the outcome of the case. Only time W-K approach makes a huge difference for Ps is with Prescription DRUGS, where P didn’t know of the adverse effects at the time of manufacture. Does not apply to durable goods (non-drugs or non-perishable goods). If W-K will make a difference it outcome of case, will not use it usually But if W-K will NOT make a difference, use it. 7 Factors (On Exam, list them, but do not apply them, rather just weigh the good and bad things about the product):
iii. Consumer expectations – Criticized as too harsh in either direction. Product Defective: if it is more dangerous than a rx person would expect wrt design → defective. If a hidden danger (latent defect) more likely to violate CE Were there any warnings on the product? iv. Alternative liability (Barker Test) – P prevails if either (1) the risks outweigh the utility (risk utility); OR (2) the design fails to meet consumer expectations. In Calif., once P proves that the defect caused his injury, the burden of proof shifts to D on the risk vs. the utility. P does not have to choose and can win on either theory. 3. Warning defects – Rebuttable presumption that if a warning is given, it will be heeded. If a warning is missing → presumption P would have read warning, if one had been given. Rebuttable -D can prove otherwise. - Relatively cheap to give a warning. - “But For” your failure to warn, I would not have injured myself. - If danger is really obvious in warning defect claim, then no CIF. i. *Risk/Utility – Different balancing test; Look at the reasonableness of the design. 1. Risk of giving warning (publicity, design, deflate sales, low cost) vs. utility of giving warning (warnings pollution). 2. If not a good warning more likely product defective. ii. Wade-Keeton risk/utility – RARE b/c how can you warn about something you do not know about. iii. Consumer expectations – RARE. Was the product warned about in a way that a reasonable consumer would expect given the level of danger of the product? Split in jxs: (1) maj: not used at all; (2) min: sometimes used iv. Types of warning defects: 1. Procedural defect – Not effectively communicated to the consumer. Too few or too many warnings. Factors to look for: size, thickness, and color of letters. 2. Substantive defect – Not detailed enough. Didn’t include info in warning that was needed → substance to warning is missing. Ex. not clear from wording it’s dangerous. v. DEFENSES 1. Obviousness – Because there is no casual connection between failure to warn & injury. 2. Learned Intermediary Rule (Applies to prescription products - ex. drugs) – Manufacturer is not liable if intermediary (e.g., doctor) was adequately warned. It is for the intermediary to warn the consumers. 3. State of the art C. No substantial change in condition of product since sold 1. “Substantial Change” – Material in terms of leading to injury.
D. Causation: PC & CIF 1. “But For” …, I would not have injured myself. (PC or CIF??) E. Damages 1. Personal injury or property damage to ultimate user or consumer. 2. Allows recovery for damages to any foreseeable P, privity not required. 3. Note: easier to recover than in Negligence, but harder than absolute liability 4. Punitive Damages: can have punitive damages for any tort action. To prevent future misconduct & punish past misconduct. a. Guidelines for Constitutionality of punishment: i. Degree of Reprehensibility: only economic harm (not physical) ii. Ratio b/w compensatory and punitive damages: iii. Difference b/w award and civil and criminal penalties for comparable conduct. b. Due Process of Law: cannot give a grossly excessive award. c. Wealth of D is considered as a factor in awarding damages. B. Defenses to Products Liability Causes of Action 1. Substantive defenses (“No” didn’t meet prima facie elements) A. Warranty disclaimers B. “State of the art” (4th factor in Risk/Utility test listed in Wade) – The existing level of technological expertise and scientific knowledge relevant to a particular industry at the time a product is designed. There is no practical way to make the product better. 1. Two factors to defining state of the art: Scientific feasibility Economic feasibility (rough sense of how expensive is too expensive) 3. Majority: use “state of the art” as an absolute defense (i.e., product not defective). Rationale: Can’t be defective b/c there is no reasonable alternative to balance against the decision the manufacturer made. It is the best design out there. 3. Minority: product still can be defective, even if state of the art, if the overall risk to society outweighs its utility. 4. If a product is not state of the art, it does not nec. mean that a product is defective → still do R/U analysis. There may be a consumer preference for items that are state of the art. 5. Custom – A manufacturer can be consistent with custom, but not state of the art. Look @ industry to see what other companies will or will not do. Custom ≠ state of the art. 6. Burden of Proof: D shows that the product is state of the art and this goes to the issue of defectiveness C. Inherent Characteristics Defense: Restatement 2d 402(A) – If a product is by its nature dangerous, it cannot be defective (e.g., tobacco, alcohol, butter). Comment i: unreasonably dangerous.
D. Comment k – No SL for “unavoidably unsafe products” if an adequate warning is given. (Does not define what is an unavoidably unsafe product) i. Courts have limited its application to prescription products (drugs, vaccines, medical devices, pacemakers) – that is, you cannot get product w/o a prescription. ii. How to apply comment k: (Split) 1. Case-by-case approach – Courts decide as a legal question (weigh risk & utilities) whether comment k gives protection. 2. Minority (CA) – Gives protection to medical products across the board b/c too difficult for courts to determine. 3. Restatement 3d (Brand new approach) – Reasonable physician standard. Look at what a reasonable physician would do if he/she knew evyeerything that manufacturer knows; If doctor would prescribe the drug to some class of people, then there is immunity from liability. Only liable if no reasonable health care provider would prescribe it to any class of patients. 4. Applies to design, mfr, and warning defects. Warning defects → most common; insufficient labeling – treated same as products except “learned intermediary” rule will have greater effect with drugs. 5. Some jx allow a design claim under Negligence only (comment k); Other jxs say one cannot bring a design claim at all. iii. Rationales for giving special protection to prescription products: 1. High social utility (risk spreading will increase the price to cover increased protection) 2. Disproportionately impacts the poor (if raise the price of drugs) 3. No way to make prescription product safer 4. FDA approval process iv. If comment k provides protection from SL, negligence claims are: 1. Majority – Negligence is allowed. 2. Minority – Negligence NOT allowed (Exempt from liability). 2. Affirmative Defenses (“nay, nay, nay”) D has the burden of proof A. Comparative liability: 1. Majority of jxs apply it and a strong minority does not 2. 3 Types: (1) “Pure” (even if D only 1% at fault P can recover 1%); (2) “less than” (if P<50% at fault can recover)-if tie P loses - 49% approach; (3) “not greater than” approach (no recovery if P>51%) - If tie P wins - 50% approach if 2 people. 3. Fewer jurisdictions apply comparative negligence in IWM than in
SL. 4. Negligence: allows comp negligence if it is used in their jx 5. SL in Tort: (1) Majority: applies comp neg; (2) Minority: No 6. IWM: (1) Majority: applies comp neg; (2) Minority: No B. Contributory negligence (in a few jxs): all or nothing defense 1. Negligence: those few jx that do allow it will use it as a defense 2. SL in Tort: NOT EVER APPLIED. P’s failure to exercise reasonable care to discover the defect is NO defense in SL in Tort. 3. IWM: NOT EVER APPLIED. 4. If P discovers the danger and nevertheless proceeds, contributory negligence or assumption of risk may be asserted as a defense. C. Assumption of Risk: 1. Most courts allow it in Negligence, SL & IWM actions; No IWM case has rejected an assumption of risk. 2. Two elements: i. P Subjectively understood and appreciated the risk; and ii. P Voluntarily encountered the risk. 3. P can claim he is stupid → didn’t subjectively understand the risk 4. Traditionally, a complete defense (all or nothing), but 5. Trend: treat it as a comparative liability principle. D. Misuse: by P 1. Split in jurisdictions: as to whether this is an affirmative defense (BOP on D to show misuse) OR whether it should be part of P’s prima facie case (BOP on P to show no misuse). 2. Misuse ONLY bars a claim if the misuse was not reasonably foreseeable. Mfr not liable for P’s misuse unless it is a rx fx misuse. Is misuse rx fx? If yes, misuse is not an applicable defense. 3. Misuse by children: i. Courts held bizarre uses by children as foreseeable ii. Why? Children are more creative/imaginative & have fewer life experiences to know that they might be hurt. iii. Just about anything will be seen as fx when kids involved. 4. Intentional misuses: NO recovery for that misuse i. Most misuses are intentional (e.g., stand on a chair, which is not meant to be stood on). ii. The label “intentional” inserts a moral judgment on the misuse (“jerk” label – morally reprehensible conduct) iii. NO liability for abnormal handling, preparation for use, or consumption. EX: Child takes a beer bottle & throws the bottle against a telephone poll from 8 ft. Glass comes back & hits him in the eye. Child claims that the bottle was defective (glass not thick enough). Recovery barred b/c intentional misuse. E. Pre-emption: i. certain products will be exclusively regulated by federal gov’t and have exclusive control over a product. ii. State law cannot conflict with federal laws → fed law trumps.
ii. Two Types: 1. Express: must be a federal statute 2. Implied: key issue: intent of Congress C. Defendants Other Than Principal Manufacturers 1. Status of retailers: A. Sellers regularly engaged in that type of product are SL. 1. Examples: Manufacturers, component part manufacturers., retailers, distributors, wholesalers. (M → W → R → C1) 2. Must have title to the product (NOT brokers) 3. Must be regularly engaged in sales of that type of product (NOT truck drivers moving the product) 4. Rationale: for SL throughout the chain i. Retailer can exert pressure on the manufacturer to enhance the safety of the product. ii. Helps spread the cost (good public policy) iii. Helps P get liability (easier to prove causation as closer to chain; manufacturer goes bankrupt; jurisdiction problems – international; deeper products; or might not know who mfr is) iv. Market product & get into stream of commerce. Retailer is reaping the benefits from sale of product. 5. Used Product Sellers Courts are split as to whether they will allow SL for sellers of used products. (C1→ Used S → C2) i. Restatement (3d) OK to sue used product sellers in SL, but no SL if used sellers say that they are selling the product “as is” when P purchases it. ii. Used Product Seller: anyone who owns the product at some point and then sells it; mere possession is not enough. B. Liability in regard to vertical privity: 1. Negligence Only liable if at fault; - look at each individual D; ex. if design defect only mfr is liable 2. SL Every seller in the chain is liable (most jurisdictions). 3. IWM Every seller in the chain is liable (most jurisdictions). 4. Express warranty Only party making promise is liable. 5. IWFPP Only liability for parties that satisfy the IWFPP elements. No liability up the chain. D. Real Property 1. Usually not considered a product, but in some instances it may be (e.g., tract housing built on a mass scale; cookie cutter → not unique). 2. Landlords: A. Majority No SL B. Minority SL on landlords b/c like product sellers. E. Services 1. NO SL for pure services; Only negligence. 2. Why no SL? A. No ability to spread risk b/c smaller customer base to spread costs.
B. Service is directly from whom you are going to sue and not some distant manufacturer. 3. Hybrid (Sales/Service) Transaction: A. Use essence of the transaction test: 1. If essence is sale of product SL (ex. blue collar job – hairdresser) 2. If essence is service NO SL (ex. a doctor’s visit)
MISREPRESENTATION Two types of cases 1. Reliance cases. A contracts with B to make calculations. C relies on the calculations and gets hurt. 2. 3rd party beneficiary cases. A contracts with B for advise that will benefit C. A fails to fulfill the contract which in turn harms C. Classic cases are will cases. C is going to be the beneficiary of the will, B messes up and C doesn’t get anything when A dies. Elements 1) False statement of material fact i. Non-disclosure – There is no liability for non-disclosure, unless there is a duty to disclose. ii. There is a duty to disclose when there is (1) special fiduciary relationship; (2) the D gets new info and knows the plaintiff is relying on the old info; (3) there is active concealment of a material fact. iii. Conduct can be considered a misstatement of material fact. iv. Opinions are only actionable if the party making the opinion is an expert, or if the opinion is wrapped around fact. 2) Known by D to be false, without belief of truth, or reckless disregard (scienter) i. Negligence is enough when: 1) privity of K or 2) some sort of special fiduciary relationship or 3) some special business relationship ii. To determine if a special duty arises from special business relationship: 1) knowledge that the information is required for a serious purpose, 2) knowledge that the listener intends to rely upon the statement, 3) and an injury occurring because of the reliance. iii. Another special relationship that lowers level of fault is when people are in the business of endorsing products, publisher of books not included unless they guarantee accuracy of info. iv. Another special relationship is where the vendor has knowledge of a defect that the other party could not have discovered with reasonable diligence. 3) Expected to be & reasonably relied on by P (Intent by D) i. Most courts now say that the plaintiff has no duty to check the accuracy of an apparently reliable statement ii. Can not reasonably rely on a statement of law, must get your own lawyer iii. Generally statements that are predictions of the future are not actionable. Unless when making the statements, the defendants made it sound like a fact and it was
reasonable to rely on it. But tough now because courts may say, if this is so material then do your own investigation and see if what they say about the future is true. iv. When a person makes a statement about an intention to do something in the future, but never intended to actually do it, and that turns out to be materially and reasonably relied on, then that is actionable. Basically it is treated as a misrepresentation about his present intention, which can be a fact if it can be ascertained. 4) Foreseeably causes pecuniary loss to the P i. Generally contract damages are “benefit of the bargain.” In the case of the car you would take the price of a new car, which is what he thought he was getting, and subtract the value of the car he got. For Torts it is out of pocket losses, basically the cost of repairing the car and making it like new. 3rd Party Misrepresentation
INTERFERENCE Plaintiff has a business relationship with a 3 rd party and the defendant has interfered with that relationship Injurious Falsehood Elements 1. A false statement of a kind calculated to damage a pecuniary interest of the P. 2. Publication to a third person 3. Malice in the publication, just like defamation 4. Resulting in special damages to the P, in the form of pecuniary loss. Although, special damages not required if have general damages and no other explanation exists. 1. The courts basically say Puffing and Opinion is not going to be actionable. The court also says that, generally, product comparisons are not going to be actionable. False statements of Fact will be actionable. The line if very fine between fact and puffing. 2. The test for the difference between opinion or fact – “Is the statement susceptible to being proven true of false.” 3. Most torts focus on the conduct of the defendant. This tort focuses on the injury to the P’s business and economic interest. A. Interference with Contract: 1. A valid contract between P and a 3rd party: a. Does not apply if just a contract between P & D. b. Contracts terminable at will also included. c. P must be in an existing contractual relationship w/ a third party. 2. Knowledge of the valid contract by D a. Knew or should have known b. HYPOs Laker scout wants to sign Cupp. He doesn’t know that Cupp has already signed with Kings. NO interference with contract b/c Lakers did not know Cupp had a K with Kings and had no reason to know b/c Cupp is not known in basketball field.
Raptor scout wants to sign Kobe Bryant. Bryant (in the middle of 4-year K with Lakers). Scout doesn’t know that Bryant plays for someone else. Bryant agrees. There is interference with K b/c the scout should have known that he had a pre-existing K w/ Lakers b/c he’s established in basketball and wellknown. 3. Intent by D to unjustifiably interfere with the contract: 2 issues: (1) Did D intend to interfere?; and if so (2) Was that intent justified? a. What constitutes sufficient intent? 1. Originally (CL), intent = ill will (desire to hurt P - malicious) 2. Modernly, Intent = desire or substantial certainty to interfere; and that the interference is improper or unjustified. 3. Distinguish from ill will: Could desire interference & wish nothing; focus: helping self. Analogous to intent for battery where it’s desire or substantial certainty to cause a contact that ends up being harmful or offensive that matters, rather than desire or substantial certainty to cause harm [desire to hit kid, but no desire to harm kid] It is the Intent to interfere (not the intent to harm) that matters (even if the D does not know it is unjustified) not the consequences of interfering. 4. Interference with existing contract – Doesn’t just mean causing a breach of contract; interfere with ability to perform; delay performance of contract. [The interference must cause P to lose a right under a contract or make contract rights more costly or less valuable.] 5. Hindering performance is sufficient: the intent (and consequence) may be to hinder the performance of contracts rather than to directly encourage breach under interference with contract (interfere with K OR hinder performance of K). 6. HYPO: Suppose D is vegetarian. D’s brother owns a butcher shop. D falsely tells others that biz is closed. D should have known that he would interfere with his biz (here, NOT enough for substantial certainty). But, D had the desire to interfere, but no desire to harm. P has a interference with K claim. 7. In most jx BOP on P to prove D (acted with intent). But in some jxs, the burden is put on D instead to prove an affirmative defense that interference was justified. Davenport says assume unjustified, and D must prove justification for interference with contract. b. When is an interference justified? 1. When D is looking out for public interest. 2. EX: D induced various theater owners to cancel their contracts with P, b/c the low wages that P paid the female troupe members forced them into prostitution. D is justified. 3. If there is an objective basis for a good faith belief that one’s interests must be protected. i. Attorney advice does not equal good faith. ii. There has to be an objective basis beyond mere reliance on an attorney’s counsel.
4. Ex: illegal K’s, loan sharking, hitmen, marriage K’s, boycotting, etc 5. On Exam: do “justification” in intent element (3) and in element (4) just say “in above element determined or did not determine it was justified.” c. Commercial speech – NOT protected if it frustrates rather than advances people’s informed & reliable decision making (i.e., state can regulate commercial speech). Ex. solicitation. d. BOP on justification: split in jxs 1. Modern Trend: require P to prove as part of her prima facie case that the interference was not justified (BOP on P); P must prove by the POE that the interference was unjustified. 2. Other Approach: assume initially that all interferences are unjustified, but allow D to prove as an affirmative defense that interference was justified. Shifts BOP to D. [Some jurisdictions] 4. Unjustifiable interference caused by D [Causation Analysis] 5. Damages: a. Actual & punitive damages available if malice or ill will is involved. b. Easier to prove than in IPEA cases. 6. Restatement 2nd §767 – Factors for determining when interference is justified (i.e., whether an actor’s conduct in intentionally interfering with an existing K OR prospective contractual relation of another is improper or not. Apply to both torts, but applied more stringently to P’s claims in IPEA. [“Rules of the Game” – socially accepted conduct which the law regards as privileged]: a. Nature of the actor’s conduct; 1. Even if a party is justified in trying to interfere with another’s contract or prospective economic advantage, the means by which the interference takes place can make it unjustified. 2. In performing this appropriate motive of competing, if improper means are used (e.g., improper solicitation), this is an important factor. b. Actor’s motive; 1. Particularly difficult/messy. May put an evil or noble spin on motive. 2. Short term motive Hurting the competitor 3. Long term motive Helping themselves (e.g., financially). c. Interests of the other with which the actor’s conduct interferes; 1. How badly is P going to be interfered with d. Interests sought to be advanced by the actor; 1. Ex: in Brimelow, the judge was appalled that a young girl was forced by underpayment to continue in a sexual rel w/ an abnormal man. Illegal element: prostitution. Fighting for social justice does not usually violate Rules of the Game. e. Social interests in protecting the freedom of action of the actor and the contractual interests of the others; f. Proximity or remoteness of the actor’s conduct to the interference; 1. Hypo: Halle Berry complains about high heels and then high heel industry goes into a tailspin and they try and sue Berry → Will not
win b/c too remote. g. Relations between the parties: 1. Does person have a personal stake in the matter? 2. Is it more of a personal relationship or a business relationship? B. Interference with “prospective” economic advantage: [IPEA] 1. Elements: a. A valid expectancy of prospective economic advantage between the P & a 3rd party; 1. interference w/ a “potential” or hope of economic advantage. 2. Ex. Two business owners. As people walk into competitors store, the other store owner had hired thugs to shoot slings at people as they enter the competitor’s business. b. Knowledge of the prospective economic advantage by D; 1. Know or Should Have Known c. Intent by D to unjustifiably interfere with the prospective economic advantage; 1. requires desire or substantial certainty to interfere; and that the interference is improper or unjustified. 2. it is the intent to interfere; even if the D does not know it is unjustified. 3. Analogous to battery rule where it is the desire or substantial certainty to cause a contact that ends up being harmful or offensive that matters, rather than desire or substantial certainty to harm or offend. 4. Here, do justification analysis: Wrongful by 1) violation of statute, 2) violation of regulation, 3) violation of common law, 4) violation of common practice. i. Majority: Rules of the Game - 7 Factors (unjustifiable interference). ii. Minority (CA): Need 7 Factors PLUS “wrongful” conduct (P must prove that D both knowingly interfered with P’s expectancy AND D engaged in “wrongful” conduct by some other legal measure than the fact of interference itself). Ex. something criminal is wrongful (ct doesn’t define wrongful) 5. Hypo: D leased space to a P (a Furniture Store) D wanted to get furniture store to leave the space, so he can lease to someone else for more money. D harasses P’s customers and demanded they do inventory during their busiest season. Held: D violated Rules of the Game. D’s goal is OK (to make more money), but the way he went about it is wrong. 6. BOP on justification: split in jxs i. Modern Trend: require P to prove as part of her prima facie case that the interference was not justified (BOP on P). ii. Other Approach: assume initially that all interferences are unjustified, but allow D to prove as an affirmative defense that the interference was justified. Shifts BOP to D. [Some Jxs]
d. Unjustifiable interference with prospective economic advantage caused by D; [Causation Analysis] e. Damages: 1. Often more speculative in IPEA than interference with K. 2. However, the more serious the misconduct that is proven, the more uncertainty courts are likely to allow regarding future damages. Do not want to reward a wrongdoer by not allowing recovery. 3. Prospective – speculative; ex. future earnings, gifts, etc. 4. Harmon case: Whether the expectancy of receiving money in a will is something which the law would protect? Not certain he would get the money from the will b/c mother could change her mind. Held: claim allowed if in all likelihood he would have received something (more likely than not). 2. Majority approach applies same 7 factors (Rules of the Game) as for interference with K, but apply it more critically to IPEA. 3. Future economic advantage 4. Where there is not yet an existing contract, but there is a prospect (hope) of economic advantage; Extent of excuses available to D is broader than in interference w/K. Wrongful Death and Survival Claims A. At common law there was no wrongful death cause of action because the killer automatically had to forfeit all property to the crown. B. Now all 50 states have wrongful death statutes. 1. Close reading of the statute 2. Who can recover? 3. How much? C. Initially a party could only recover pecuniary losses. D. A growing number of courts have taken the route of the principal case and allowed for recovery for “loss of companionship” or consortium of a deceased family member. E. Some states go beyond damages for “loss of companionship” and also provide for damages based on “grief” F. No modern American Jurisdiction limits recovery for pecuniary losses, although some do limit recovery for non-pecuniary losses. G. About half the states permit punitive damages if there is reckless or intentional conduct. H. Survival damages are on behalf of the actual decedent? 1. Some courts allow recovery for pre-impact fright. I. Generally the survival actions are brought by the estate and the money goes in the estate and will be distributed to those in the will. J. Defenses: Any defense that the defendant could have raised, if the decedent would have survived, it can be raised in an action by the survivors. Contributory, comparative negligence is still relevant. I. Negligence by the beneficiaries is only relevant in a wrongful death cause of action, not survival.