Torts Lecture[1]

Defamation LIBEL A publication which exposes a person to distrust, hatred, contempt, ridicule, obloquy or to cause him to be shunned or avoided. A communication that tends to damage the plaintiff’s reputation, more or less in the popular sense – that is to diminish the respect, good will, confidence, or esteem in which he is held, or to excite adverse or unpleasant feelings about him. Why is reputation an interest to be protected? Economic interest and social interest. In the tort of defamation, we are less concerned with whether he suffered damages and are more concerned with reputation. Truth is an affirmative defense. Elements of defamation: 1. Defamatory words (not reasonable standard as to if the words were defamatory) 2. The publication (communication of the words to a third person) 3. Extrinsic facts, because of which the words were reasonably understood to convey a meaning of defaming the plaintiff 4. A formal allegation that the words were spoken of and concerning plaintiff (colloquium) 5. An allegation of the particular defamatory meaning conveyed by the words (innuendo) 6. Special damages when they are necessary (slander needs it, not libel) Truth is generally an affirmative defense and the burden of proof is on the defendant. Substantial truth is enough. When there is a class of people we draw some lines. If it is a large group then no one can sue. If it is a small group and all are defamed, then all can sue. If the accusations were particularly intense then if may be more likely to work as libel. 1/13/04 “Sticks and stones will break your bones, but words will never hurt me.” How does this relate to the law of torts? Juries will not side with plaintiff in all cases, they may need more damaging statements. Originally libel or slander was just exposing someone to ridicule, but over the years the requirements have become much tighter. Typically libel is written words, and slander is spoken words. What about words that are spoken and then broadcast? Should there be a distinction between things broadcast on radio that were scripted or not? Today there is typically no distinction, usually it is libel. Sometimes it is treated as slander, depending on the jurisdiction. But almost always treated the same whether it is scripted or not. What about the internet? Recent decisions: CA Ct. of Appeals – the internet is more like libel because of the publication aspect of it. In a slander case, the plaintiff must prove special damages. The special damages must have been the natural, immediate and legal consequence of the words. With Slander and Libel the interest we are trying to protect is reputation, not health. If someone is slandered and they hear it and feel bad and get sick, then probably not win case because it is not really important that you feel bad, we are trying to protect you from other people thinking badly of you and as a result of that, you suffering special damages. Fall back is sometimes IIED. If there is a severe berating of a person that no one else hears. Slander Per Se – Exception to the general rule that you need to prove special damages. a. Imputations of a Major Crime b. Loathsome Disease – This category has been almost eliminated because of advances in medical science. But what about AIDS? It seems like you need to prove special damages with other STD’s now but maybe not AIDS. c. Business, Trade, Profession or Office d. Serious Sexual Misconduct Communication for the second element, means communicated and understood by a third party. The communication to a third party must also be done intentionally or negligently. In some cases an employer has been held liable for failing to remove defamatory remarks, like graffiti in a bathroom. Publication starts the statute of limitations and generally it does not restart a new cause of action unless a new edition is republished. 1/15/04 The 3rd element is more about the defamatory meaning. The 4th element is more about the plaintiff. The old test was that the words had to be substantially true in order for the defense to get off with an affirmative defense. Does not have to be all true, if enough of the sense of the words were true then the court may find that it was substantially true. The court adds and element in NY Times v. Sullivan, they say that in a case of libel against public officials, the plaintiff must prove actual malice (with knowledge that it was false or with reckless disregard of whether it was false or not). Some of the judges actually said they want the rule to be that there is an absolute privilege to defame public officials. In this case Sullivan would need to prove that the defendants knew that the statements were false, or that they acted with reckless disregard. In the case the NY Times did not check the facts of the ad before publishing it. The court finds that not checking the facts was mere negligence. The definition of public officials is covered in the notes on 874-75. In St. Amant the court decided that the actual malice element is not measured by a reasonable person standard. The defendant had to have actual doubts about the truth of the statements and must be acting in good faith. 1/16/04 HYPOS President of Pepperoni Univ is new and does an interview with LA magazine. When the issue comes out he is quoted as saying “Pepperoni Univ used to be something of a joke academically but is now gaining academic respectability.” President actually only said things about the current improvement of the univ. Said that the university is improving drastically. Corporations generally don’t have an action for defamation. 1/20/04 Actual Malice has been added to the elements in some cases. This comes from the 1 st amendment to the constitution. The other elements come from the common law of torts. Free speech is a separate interest to be protected. It is often at odds with the interest to protect the reputation of the plaintiff. We are trying to figure out when punitive damages and presumed damages are allowed. In the Dun and Bradstreet case the court ruled that in a matter of public concern then no presumed or punitive damages without actual malice. If it is a matter of private concern then those types of damages are allowed. Phili Newspaper v. Hepps Here we have a private individual but the subject matter is of public concern. Here the standard is that plaintiff must prove actual malice and probably punitive and presumed damages will not be allowed. Here Justice O’Connor ruled that the plaintiff had to prove that the statements were false rather than the normal way we thought was the law, that truth is an affirmative defense and must be pleaded and proved by the defendant. In cases of public concerns we are going to err on the side of protecting the 1 st amendment. 1st Amend. Tools Public Officials and figures Actual Malice Burden on Plaintiff Private Figure/Public Concern Negligence Burden on Plaintiff (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 Fault Truth Presumed and Punitive damages Allowed only with Actual Malice Allowed Gertz test – Public figures have access to the media, and have assumed greater risk by being in the public eye. There are also limited public figures and universal ones. If there is a limited public figure and the issue at hand is not one that is related to his public-ness, then we may treat that person as a private figure and private concern for the purpose of the suit. But this is still murky. Judge Renquist says assumption of the risk is more important. On the other hand, some people can be considered a public figure even if they don’t voluntarily thrust themselves into the public light. 1/22/04 De Facto Public Officials. Public Officials are pretty well defined, they are pretty much people who are in government positions. TORTS OUTLINE FROM DAVENPORT 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 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 – 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. II. Publication to a third person A. Any communication to a 3 rd 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. D. Single publication rule – one edition of newspaper, book, tv show. E. Re-publisher (media) also liable 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. 2. Libel requires no special damages G. Spoken publication is slander – special damages required 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”) 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 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) 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 1/23/04 INVASION OF PRIVACY The use of an image for commercial purposes. Where is the line between commercial and non-commercial? The protection of your image, you have an interest in not having your identity appropriated for commercial uses without your consent. So commercial interests end up competing with news interests. Where do we draw the line. We limit commercial to advertising. In Flake case the court said that because there was no malice then the damages are minimal. When the picture of an infant was misused for a Sears Ad, the court said a technical invasion of privacy occurred but they did not allow any action because they said the baby was too young and the picture was flattering so no damages. Today, the courts treat private people different than public people. Private people have a cause of action less often because they do not have as much of a commercial interest. If it is a private person it is more like a defamation right, if it is a public person it is more like a property right. Not only has to be a picture, it is the misappropriation of a person’s likeness. Can be a voice, or even a voice that sounds like someone. Media can not broadcast a performer’s entire gig because this will really infringe on the ability of the performer to make money in the future. 1/27/04 Pearson v. Dodd People break into Senator’s office and copy private files. What cause of action? The tort here is intrusion upon seclusion, in this case they sued the person who published the documents not the person who actually intruded. For that reason there was no recovery. Extend the tort of invasion of privacy to instances of intrusion, whether by physical trespass or not, into spheres from which an ordinary man in a plaintiff’s position could reasonably expect that the particular defendant should be excluded. This tort is about the intrusion, not about the documents, or the conversation, or a commercial use. Elements: 1. The intrusion must be into a private place, conversation, or matter; 2. And must be highly offensive to a reasonable person. (objective expectation of privacy) Public Disclosure of Private Facts and Offensive to a reasonable person Defenses: If it is true and is a matter of public record then it is ok. The law is heading more towards a breach of confidence. READ Note 4 on page 954-955 1/29/04 FALSE LIGHT The media has published false facts or misconstrued the facts about the victim that causes the public to view the victim in a false light (either better or worse). Similar to defamation, but the standard for defamation is harder to prove. False light is sort of a gap filler, can not fully prove the other privacy torts but a bit easier to show that they have been shown in a false light. Not all states like this tort. 7 States have rejected this tort, others have not definitively ruled on it. Must be put in a false light, and must be highly offensive to a reasonable person. When do we use the constitutional standard of actual malice? When the speech is of public concern. When the speech is about a public person. When the speech is newsworthy. Usually if the media publishes it then it is assumed to be newsworthy. Truth is a defense to False Light. STRICT LIABILITY There is really no one bite rule anymore, the real test is now, is the D aware of the danger? What items fall under strict liability? Rylands v. Fletcher (common law) Non-natural use of land Restatement 1 test of ultra hazardous. 1. Ultrahazardous 2. Risk not eliminated by due care 3. Not a matter of common usage This test is more like a element test where you need all 3 elements. Restatement 2 test is the 6 factors in the Cyanimid of Abnormally Dangerous 1. High degree of risk 2. Harm great 3. Can’t eliminate risk w/ due care 4. Not matter of common usage 5. Not appropriate to location 6. Value to community not outweigh danger This test is like a factor test, not elements, just look at totality of circumstances. Blasting of dynamite is probably Abnormally Dangerous anywhere, even if it is needed (for example building a swimming pool). Limits to Strict Liability  Proximate Cause  How you describe the activity which caused the damage o The accident was not a result of manufacturing chemicals, but of transportation  That which makes the activity dangerous (scope of danger created by that activity)  Act of God (Force of Nature)  Assumption of Risk (knowingly) PRODUCTS LIABILITY Product Process Design Manufacture Warning Chain: at what point does liability arise? Supplier Manufacturer Wholesaler Retailer Customer C/A: Legal Doctrines Negligence Warranty - Express - Implied Strict Liability MacPherson v. Buick Chain to customer: Wheel Manufacturer – Buick – Dealer – Customer It appears that we have a pretty standard negligence cause of action against the Wheel Manufacturer. In this case the P is suing Buick. This case turn to be a negligence case and historically courts actually limited negligence actions to parties that had privity. This court sets a new standard and says that if an item is dangerous by nature (if it is reasonably certain to place life and limb in danger when negligently made) then we will extend liability. Baxter v. Ford The basis of the action was the warranty (promise) that the glass not shatter. Not a negligence case because there is only a duty to create a reasonably safe windshield, and they did create a normal windshield. In this case the problem is that they promised to make a crack-proof windshield. What if you buy a used car from a dealer “as is.” Generally the “as is” will stand if the loss is money, but if the loss is great bodily harm (like death because it explodes) then the courts have ruled that retailers can not limit their liability in those cases. Greenman v. Yuba Judge Trainer – A manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being. Restatement (p.733) – One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property if (a) the seller is engaged in the business of selling such a product, and (b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold. The restatement becomes essentially the law. 2/10/04 Why would a plaintiff go for negligence over strict liability? The jury may be more willing to award higher damages if you can show fault on the part of the manufacturer. There are 3 types of products liability: 1. Manufacturing; 2. Design; 3. Failure to Warn The Rix case tells us that Manufacturing is essentially Strict Liability. The Prentis case tells us that Design is essentially a negligence standard. If the result is that the design is negligent, then that really effects the manufacturer because basically their whole product needs to be redesigned. A more accurate analysis may be that design cases are still using a standard of strict liability but with a negligence component. Use a risk/utility balancing test to determine negligence. In the O’Brien case we have an above ground swimming pool. There was no way to design the pool to be safe for diving. There is really no flaw in the design, the court is saying that the flaw may have been in the decision to make the pool at all. If the risk outweighs the utility of having the product in society, then maybe the product should not be made. Factors in a risk/utility test: 1. The usefulness and desirability of the product – its utility to the user and to the public as a whole. 2. The safety aspects of the product – the likelihood that it will cause injury, and the probable seriousness of the injury. 3. The availability of a substitute product which would meet the same need and not be safe. 4. The manufacturer’s ability to eliminate the unsafe character of the product without impairing its usefulness or making it too expensive to maintain its utility. 5. The user’s ability to avoid danger by the exercise of care in the use of the product. 6. The user’s anticipated awareness of the dangers inherent in the product and their avoidability, because of general public knowledge of the obvious conditions of the product, or of the existence of suitable warnings or instructions. 7. The feasibility, on the part of the manufacturer, of spreading the loss by setting the price of the product or carrying liability insurance. What about defenses. If the defendant shows that he was in accord with the custom of the industry is that enough? It is a pretty good defense but the court may find that the custom is not good enough, or that the product itself should not be in the market. What about if the defendant shows that he was using state of the art technology? This is a better defense but still not foolproof. The court could still find the product should not be available at all. Most jurisdictions would require the plaintiff to prove that there was some alternative reasonable design. What about the distinction between a luxury v. necessity? This is also a factor in some courts. 2/12/04 CUPP IS HERE TODAY, YEAH!!!!! PRODUCTS LIABILTY A lot of change over the past years in this area of law. The ALI’s restatement is probably the most adopted in Torts than any other topic. Restatement 2 nd 402(a) is considered the holy writ of writs. It is pro plaintiff, created the new tort of strict liability. Defects can be categorized in 3 different ways. Manufacturing – “oops” cases; basically if a product differs from its intended design. Basically a strict liability standard. Design – When the product was intended to come out in the way that it actually did come out. It is basically a risk/utility analysis with a Reasonable Alternative Design requirement. Basically a balancing test against another product. It is basically a negligence standard. Courts have split on whether they want to adopt this standard. The majority have adopted this approach but a minority has rejected it. These minority of jurisdictions typically use the consumer expectation test. Another problem with this standard is that it is very expensive and thus pro-defense. Almost always have to hire an expert. Warning – Either the manufacturer didn’t warn at all, or did not warn well enough. The warning standard is a risk/utility with a reasonably alternative warning. One of the risks or costs considered is that too many warnings will dilute real necessary warnings in society. This is basically a negligence standard. It is easy to come up with alternative warnings so that is why the courts agree that a negligence standard is better to use here rather than a strict liability standard. FAILURE TO WARN CASES Some courts use the consumer expectation test. Look at the plaintiff and determine what the plaintiff’s expectations been. What would the plaintiff reasonably expect. More jurisdictions use the risk/utility test and some courts use a combination of the two. Very common to bring a defective design claim along with a failure to warn claim. The courts have taken note that some dangers are just obvious so you don’t have to warn about that. With the obvious danger cases basically the court is looking for unequal knowledge. If the public has basically the same knowledge about a danger that a manufacturer has then there is no duty to warn. In most jurisdictions there is a presumption that the user would have read and heeded an adequate warning. Most jurisdictions say that a manufacturer has a duty to warning about things that are discovered post sale. Some warnings are simply to pass on info. Some warnings are telling you how to use a product safely, these usually must explain the hazard and explain how to use the product safely. We also need to be aware that administrative agencies regulate a lot of these areas, the FDA. PROOF A guy is setting up a display in a hardware store, he is standing on a stepladder and it collapses. Plaintiff: Eyewitness, Evidence (stepladder) examined by expert maybe, get other products by that manufacturer and by other manufacturers, look at labels and warnings, trace the chain of the ladder. Defense: Shoes (particulars of the plaintiff), how the store trained people, statistical evidence to quiet the design claim, focus on the part of the ladder and try to lay off the liability, maintenance of the ladder. In a strict liability case, comparative negligence can be used to lessen damages. The manufacturer is still responsible for the defect, but should not be responsible for whatever part the plaintiff played in contributing to his own injuries. 2/17/04 Historically contributory negligence in the sense of not discovering the defect was not a defense in strict liability in products liability. But, assumption of risk, was considered a defense and you were barred from recovery if you knowingly assumed a risk. Now plaintiffs comparative negligence is a defense and will adjust the damages awarded. Assumption of risk is now treated like comparative negligence. Sometimes the courts will say that if the risk is very well known, then the product was not defective in the first place. There is also the misuse defense. A manufacturer is usually not liable for injuries that result from an abnormal misuse of the product. If the type of use is reasonably foreseeable then the manufacturer is not off the hook. PREEMPTION Congress does have the power to preempt state law, but since we do respect state sovereignty we will not easily interpret congressional statutes to preempt state law unless it is clear. Is a used car retailer liable for defects? Now California has passed legislation that used car dealers have a duty now to inspect brakes and other safety items. At common law, the retailer is not liable. An occasional seller of a product is generally not held liable for defects. A seller of used products is generally not held liable. Generally performers of services are not held strictly liable for the services they provide, it is products liability, not services liability. Services are really about human conduct, which is what negligence is really about. EMAIL QUESTIONS – What exactly are special damages? And what about, “Benno said Laura cheated on her test.” 2/19/04 DAMAGES Economic damages in product liability point of view, the product didn’t work, so I need money to replace the product or I need a product that works. If there is some personal injury, then larger damages and pain and suffering and other damages are awarded. In product liability cases punitive damages are available but they are very controversial. Punitive damages are usually awarded when there is some reprehensible conduct on the part of the defendant and the defendant has some economic strength. Is torts about fault, or about spreading the loss? Strict Liability Warranty (Exp/Imp) Avoids Defenses Lower bar of proof Avoids State of Art Negligence (Fault) (Damages) On Exam start with Strict Liability Restatement 2 nd, then go to warranty. Woman buy coffee at Starbucks, the foam cup leaks and she gets burned. First determine who we are going to start with. We have defective products, possibly the cup and the coffee. The most ideal would be to find a stack of defective cups. Check the design of the cup. Possible a warning issue, but probably not. Warranty – Starbucks warrants that its coffee is going to be safe. The actual customer is the one hurt so not the problem of privity. Negligence – look at temperatures of coffee. MISREPRESENTATION Old English Rule Negligence is not sufficient grounds for imposing liability for deceit. To establish liability for deceit need to prove fraud: 1) knowingly, or 2) without belief in its truth, or 3) recklessly, careless whether it be true or not. The level of fault is less than, but close to intent, and greater than negligence. This level of fault is called scienter. If you are trying to rescind a contract then the standard is much less, probably even less than negligence. Restatement 2 nd § 526 A misrepresentation is fraudulent if the maker (a) knows or believes that the matter is not as he represents it to be (b) does not have the confidence in the accuracy of his representations that he states or implies, or (c) knows that he does not have the basis for his representation that he states or implies. For Fraud we need a misrepresentation of a material fact + something more. If there is 1) privity of K or 2) some sort of special fiduciary relationship or 3) some special business relationship then the courts will reduce the requirement of fault to negligence. Some courts call this negligent misrepresentation and the 3 categories are determining when there is a duty. Other courts don’t acknowledge negligent misrepresentation but still call it deceit and say there are these 3 special categories with a lower threshold. 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. Note 2 p. 1023, probably not liable in those cases. Generally publishers do not have a duty to check the content and facts of the books that they publish. How could you get the publisher involved? Maybe if the publisher had some input as to the content. Maybe if the publisher put statements on the book which could be implied as a warranty. 2/27/04 Special relationships to lower the threshold of scienter. One more special relationship is when people are in the business of endorsing products and getting people to rely on their statements. Elements 1) Misstatement of material facts 2) Reliance 3) Degree of Fault (Scienter or sometimes Negligence) Some courts (minority) do go to negligent misrepresentation even with no special relationship. If all people want to do is rescind a contract, then typically rescission can be done even if there is an innocent material misrepresentation. That is for contract class, here we are talking about torts and damages as a remedy. Regular misrepresentation is trying to impose a duty of honesty. Negligent misrepresentation is trying to impose a duty of care. At the end of the spectrum the court will try to impose a duty of accuracy. Misrepresentation does at least require some active statement on the part of the defendant, those statements will be misrepresentation or at least based on those statements, what was not said will be a misrepresentation. Special relationship where the vendor has knowledge about the defect that the other party could not have discovered with reasonable diligence. 3/2/04 1) False statement of material fact 2) Known by D to be false, without belief of truth, or reckless disregard (scienter) 3) Expected to be & reasonably relied on by P 4) Foreseeably causes pecuniary loss to the P The cases we are talking about today fall into two categories. 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. Restatement 2 nd to use a negligence standard the liability is limited to a limited group of persons ant to a transaction or substantially similar transaction intended by the defendant. 3/4/04 Torts Midterm Review 3/16/04 1) False statement of material fact 2) Scienter, but there are some cases where negligence is enough 3) Intended to/does induce reasonable reliance 4) Proximately causing pecuniary harm to P Guy bought a car that the seller said had air conditioning. The guy got to test drive the car so the court said that it was not a reasonable reliance because he should have just tried it if it was such a material thing. In some cases the courts will look at the relationship between the parties to see if there was unequal bargaining power or difference in knowledge. Most courts now say that the plaintiff has no duty to check the accuracy of an apparently reliable statement, in other words if the car guy, today, never test drove it, he would probably win. Distinguish opinion from fact. Puffery is allowed by salesman, even if plaintiff relied, it was not relied. For products there are now plenty of regulations under the federal trade commission about what is puffing and what is not. If a party makes a representation about the law, that can not be reasonably relied on by the other party, because you should get your own lawyer. 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. 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. Damages – 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. INTERFERENCE Plaintiff has a business relationship with a 3 rd party and the defendant has interfered with that relationship. INJURIOUS FALSEHOOD The court in Ratcliffe says that the elements of this cause of action are 1) Special Damages (Pecuniary Loss), but sometimes general damages will be enough where the special damages will be presumed; 2) Malice The bottom line is that the Plaintiff should be specific in terms of damages only where reasonable to do so. If they suffer a general loss of business and there is no other reasonable explanation then the damages will be presumed. 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. Testing Systems v. Magnaflux 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. Most torts focus on the conduct of the defendant. This tort focuses on the injury to the P’s business and economic interest. The test for the difference between opinion or fact – “Is the statement susceptible to being proven true of false.” This is one area where judges have historically been more conservative and reserved than legislatures. 3/19/04 Under Interference there is 1) Injurious Falsehood 2) Interference with contract 3) Interference with prospective economic business relationships Interference with prospective economic business relationships: Is mere interference enough or do we need more (fault)? Malice? Prima facie case? – The plaintiff must plead that the act was wrongful. Mere Interference is enough? – No. The act must be wrongful by some measure other than the act by itself. Improper motives or improper means. Wrongful by 1) violation of statute, 2) violation of regulation, 3) violation of common law, 4) violation of common practice. ELEMENTS p.1087 1) 3/23/04 Interference with K v. Interference with Prospective It seems like we should make it easier to recover when there is an actual contract. With Contract: Mere interference Intent With Prospective: Mere interference not enough Plus – “improper” For 1st amendment purposes, the court distinguishes between commercial speech and regular speech. They will allow some reasonable regulations on commercial speech. Some courts do not discriminate between interference with contract, and prospective. There are a bunch of factors to find actions that are improper. In prospective cases, the plaintiff has the burden of showing improper conduct. In contract cases, we will assume the conduct was improper and the burden shifts and the defendants can try to prove proper reasons for doing it. 3/25/04 1) Existence of Contract (or econ opportunity) between P & 3 rd party 2) D knowingly and intentionally interferes 3) Improperly, maliciously – plus factor (motive) a. For interference with Contract it seems like P does not need to plead a plus factor. But the D can come forward and show how he had a proper reason for interference. See notes 1 & 2 on page 1104 for examples of what could be a proper motive, in public best interest. b. For prospective econ opportunity it seems like most courts will require P to show some improper conduct by the D. 4) Breach of K or opportunity 5) Resulting damage to P Courts are tying to balance the line between fair market competition and unfair practices. Harmon v. Harmon Breach of prospective econ opportunity. Is the possibility of being in someone’s will considered an economic opportunity. For this type of case we need strong facts about wrong conduct. Must also prove “but for” the interference the P would have received the economic opportunity. Every breach of the covenant of good faith and fair dealing does not become a tort. Besides the breach of the covenant, we need some sort of special relationship between parties. 3/26/04 WRONGFUL DEATH 1) close reading of the statute 2) who can recover 3) how much Basic Hypo: Meeting at a hotel room between union leader and mgmt leader. The light fixture crashes down and hits them. Assume the hotel was negligent. Union Leader (UL): (ex-wife, wife, 2 children, 3 stepchildren) Killed immediately Management Leader (ML): (gay companion, 1 estranged son from prior marriage) Seriously injured, went to the hospital in a coma and then died a week later. At common law there was no wrongful death cause of action, anyone who was killed was done so by a felony and the felony merged with the tort, for the felony the person would forfeit all property to the crown. There was also no survival cause of action because tort causes of action were personal, so if they died then all their causes of action died with it. Legislatures, through statutes, started enacting wrongful death statutes. All 50 states have wrongful death statutes now. The statute will dictate who can recover. Amount of damages? Lower court said in case of dead child, the pecuniary damages would be the amount that the parents could reasonably expect to get from the children minus the amount the parents would have to spend on the children. The new rules allow for comfort and companionship loss, and other intangible values. There are also actual expenses, such as medical and funeral expenses. Note 5: 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. Note 7: Some states go beyond damages for “loss of companionship” and also provide for damages based on “grief” Note 9: No modern American Jurisdiction limits recovery for pecuniary losses, although some do limit recovery for non-pecuniary losses. Note 10: About half the states permit punitive damages if there is reckless or intentional conduct. Survival damages are on behalf of the actual decedent. What about damages for the pre-impact fright? Some courts do allow it. You might have different plaintiffs who can recover in the different cases, the survival and the wrongful death cases. Note 4: 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. 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. What about negligence by the beneficiaries? Generally it is relevant to the wrongful death cause of action, but not relevant in the survival cause of action. The survival cause of action is brought by the estate and not by the beneficiaries. 3/30/04 4 types of injuries of asbestos: 1) Mesothelioma 2) Asbestosis 3) Pleural Plaque 4) Fear of Cancer Early cases were in shipyards, and the defendants were the manufacturers of the asbestos product. Typically was a Worker in a Shipyard v. Manufacturer of Asbestos Product Different causes of actions available: Failure to warn – This product is unreasonably dangerous. Was a warning necessary? Is knowledge of the danger necessary? Design defect – This is a product that can not be made safe, so the argument is that it should not be made at all. Are we going to have to find some knowledge on the part of the manufacturer? Look at industry standard and state of the art science. Implied Warranty – Now that privity is not required this is our best case. The problem here is that there is no punitive damages for this. Where to bring cause of action? Mississippi 1) Jury Verdicts 2) Consolidation 3) Only 1 P need to be a resident or Illinois What are some of the legal problems that plaintiffs run into? Proof of injury. How far down in the seriousness scale are we willing to go. Causation problems in identifying the product. Adequate representation and judicial glut. Identifying defendants that are still in existence and have money. 4/1/04 402A – Defective condition unreasonably dangerous Defective condition is one not contemplated by the ultimate consumer that will be unreasonably dangerous to him. 4/2/04 Dynamite Activity Abnormally Dangerous – based on location, setting, use Asbestos Product Ordinary Products Unreasonably Dangerous and defective, 402A New Drug For dynamite, even with the exercise of due care you can not minimize the danger of dynamite, or a vicious animal. Restatement § 519 and 520. We have come to the conclusion that with the use of reasonable care, the risk of asbestos can be minimized. So, with all the people who got injured, then we must assume that reasonable care was not used, so who was unreasonable (liable party)? Small company that used asbestos products. Guy worked for the company for a long time and has developed serious illness. Second plaintiff is the wife who is suing for loss of consortium. Third plaintiff is son worked briefly for the company but also claims that dad brought asbestos home on his clothes. Possible defendants:  Manufacturer  Small Construction Company  Shipyard Worker v. Manufacturer Unreasonably dangerous Defective in terms of warning Injury – Cancer Lost wages and death Problems for D: Identifying the products and showing causation. Did asbestos cause the injury? In traditional tort law the burden is on the plaintiff to show medical evidence that the asbestos caused the injury. Did he see any warnings? Problem with suing the manufacturer because they may be near out of money. Worker v. Construction Company Negligence – Duty to provide safe working environment. The problem here is that workers compensation is an exclusive remedy, can not sue employer if he accepts workers compensation. Son Injury – Fear of Cancer If he worked there for one summer then he may be limited by workers comp as well. Courts have stretched the causation element, they have also stretched the proof of injury requirement. They are allowing consolidation of plaintiffs. Also consider joint and several liability. 4/6/04 – HOW CAN WE POSSIBLY REFORM? Courts – “Special Asbestos Legislative Law” Consolidation -- Size, No Jurisdiction Unless the common stats, Special Defendant Operated or Sold Referee Product there, or P was injured there. Medical evidence – Who No Joint and Several has the burden? Liability in Asbestos Cases or No Joint and Several under 50% or No Joint and Several for non-economic damages. Individual Lawyers (Ethical) Lawyers can’t mix plaintiffs with past and future injuries Tolling the statute of limitations but not going straight to court Cost to public – Come up with formulas for how much non-economic damage will be allowed and trying to collect one pool of money and trying to reduce the administrative fees of collecting that money Problems that need to be reformed: Proof of injury Causation relaxing, linking to defendant Plaintiffs limited contact with the product Mass Class Actions – different kinds of plaintiffs with different interests Joint and several liability Bankrupt defendants – How is the pot of money to be used Cost to the public Medical evidence – Mass screening Jurisdictional forum shopping 4/8/04 Oxycontin Design – Addictive Quality; Industry standards; State of the art; Reasonable alternative design. Defense – Meets intended use, new and improved, help more than hurt, problem comes from misuse that is illegal. If misuse is foreseeable then can not be used as a defense, unless misuse is illegal. Failure to warn – Too many warnings renders them ineffective. 4/9/04 Hypo about LEM Dangers Legal Principles Utility v. Risk Unavoidably Unsafe – Restatement 2d 402A. Comment K specifically deals with unavoidably unsafe products. Course of Action Need to work through a learned intermediary Warning If not strict, could still be negligent FDA rules and test Restatement 3rd section 6 If a product is unavoidably unsafe, they are protected under strict liability but can still be liable under negligence. We are going to need to know, what we need to get FDA approval, and what FDA approval gives us in terms of liability. FDA approval is evidence that you acted reasonably but not the end of the case. We would also want to know about Mexican law about traffic of drugs. Restatement 2 nd 402A Comment (k) – Unavoidably unsafe. We do not know if we fit in this category because we don’t know if this drug can not be made in a way that not dangerous. Also if we do get in this category, we still must show that it was properly prepared and accompanied by proper directions and warnings. Restatement 3rd – More clear and pro defendant. Must simply pass the risk/utility test only to any class of patients. As a result, if this is widely adopted, the negligence causes of action will grow. Generally the legal duty to warn is to warn the doctors. We should advise the company to do more testing. 4/13/04 MISREPRESENTATION 1) False statement of material fact. 2) Scienter This is the fault requirement. If there is no scienter, I have to see if there is a special duty that might give rise to liability with negligence alone. If there is an innocent misrepresentation, we may be able to get a rescission of contract. 3) Reasonable reliance 4) Damages Intentional v. Negligent v. Innocent – Davenport doesn’t like to think of 3 different torts. CAP on RECOVERY The legislature placed a cap on the damages recoverable from a medical malpractice suit (1 million). The question is, “Can this be done?” Workers Comp is also a type of system that creates a recovery cap, or a mini system within a system to handle damages. Common Law Workers Comp Easier Recovery – No Fault Incentive to keep workers safe Caps on recovery Workers Comp is an exclusive remedy There are two exceptions to the workers comp exclusivity provision. 1) Products Liability action against the manufacturer 2) Intentional Torts. Some states have tried to pass legislation that limits intentional torts as well by creating a separate workers comp system to deal with intentional torts. Most of these statutes have been ruled unconstitutional. 4/15/04 Levels of fault Intent Negligence Strict Liability Absolute Liability No-Fault system: Keep administrative costs down, more money left in the pool for victims, recovery tends to be limited. Know the bullet points on p. 1252 Reduce transaction costs Match compensation more closely with economic loss Eliminate compensation of non-economic loss Speed up compensation What factors lead a state to put something in a no fault zone? 2 types of cases: 1) Garden variety like auto accidents or workers comp; 2) Special circumstances where huge recovery may dry up pool like 911 victims fund. Large number of claims Fear of huge awards Cases that are pretty similar in their elements of proof 4/16/04 Good point from Denton. 4/20/04 Lead a products liability action with strict liability. Also mention warranty, but make it brief because it is essentially a contract cause of action. Do we need Privity? Then do negligence, brief analysis, state why it is different and useful to bring a negligence cause of action. Plaintiff should bring as many causes of action as possible, but some courts might force the plaintiff to elect a specific cause of action in terms of products liability (manu or design or warning). Products liability is going from a no fault to an allocation of risk (Look’s View) REVIEW The AP writer writes the story and the AP publishes it. Picked up by LA times. The writer is strictly liable, the AP is either held to a standard of strict liability or negligence depending on whether respondiat superior is used. The LA times would probably require actual malice. Aharra Approach What courts have done to stretch asbestos laws. Allow for consolidation. More lenient class action principles. Stretch Joint and Several Liability. Burden is now on defendant to prove it was not their product.