TORTS - Get Now DOC

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TORTS - Get Now DOC Powered By Docstoc
					                                                                                                                                     A. Campbell Austin
                                                                                                                                 acaustin@law.upenn.edu


                                                                      TORTS.
Overall Summary ......................................................................................................................................... 2
Objectives of Tort Law ................................................................................................................................ 2
NEGLIGENCE ............................................................................................................................................. 3
  I. Duty......................................................................................................................................................... 3
  II. Breach: Negligence/Carelessness/Reasonable Care ............................................................................... 4
  III. Causation .............................................................................................................................................. 4
  IV. Special Case of Non-Physical Harm .................................................................................................... 6
  V. Damages ................................................................................................................................................ 6
DEFENSES ................................................................................................................................................... 8
  I. Contributory Negligence: If P is negligent too. ....................................................................................... 8
  II. Assumption of Risk – if P has waived D’s liability ............................................................................... 8
  III. Preclusion: statute absolves D of liability............................................................................................. 8
STRICT LIABILITY: CAUSE & HARM ONLY ..................................................................................... 9
  I. Inherently Dangerous Activities .............................................................................................................. 9
  II. Products Liability ................................................................................................................................... 9
  III. Products Liability Defenses .................................................................................................................11
  IV. Animals ...............................................................................................................................................12
NO-FAULT: 9-11 Compensation Fund .....................................................................................................13
  I. Terrorism: Three Scenarios in Tort ........................................................................................................13
  II. The No-Fault Option: ............................................................................................................................13
  III. Unique events of 9-11 and Other systems ...........................................................................................13
  IV. Justifying Principles? ..........................................................................................................................13




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                                                                                         A. Campbell Austin
                                                                                       acaustin@law.upenn.edu


                                       Overall Summary
 Objectives of Tort Law
     Prevent future accidents
     Compensate action
     Risk Spreading – particularly Strict Liability for Products
     Fairness
     At reasonable cost. (Hand rule)

  I. The Theories of Tort Law
       A. Economic analysis and the Coase Theorem (transaction costs)
       B. Calabresi & Melamed:
          1. Property Interests
          2. Liability Interests
          3. Inalienable Interests
       C. Corrective Justice
II. The Structure of Tort Law
       A. Tort law specifies the degree of care we owe others and damages for failure of that care
       B. Tort law has compensatory and injunctive forms of redress
       C. Tort law has a common-law structural core.
III.   Fault Liability
       A. Duty of Care (CARE OF WHO)
       B. Standard of Care (WHAT CARE)
           1. Reasonable Man standard.
           2. Objective Requirement: doesn’t differentiate between HP defendants, idiots, etc.
       C. Causation
           1. Cause-in-fact or but-for-cause
                (a) I cause your harm if your harm would not have occurred but for what I did.
                (b) Causal overdeterminiation: what to do when more than one action would have been
                     enough to cause the harm
           2. Proximate Cause
                (a) Is there a legal remedy?
                (b) Limits: Expectation/Foreseeability of Harm?
IV.    Elimination of the elements of liability
       A. Res Ipsa: injurer’s action gives evidence of his fault. The victim does not have to show fault.
           1. Doctrinal rules:
                (a) Accident must be of a kind which ordinarily does not occur without negligence
                (b) Caused by an instrument in exclusive control of the defendant
                (c) Must not have been due to any voluntary action by the plaintiff
           2. Causal Presumption: Show that one of a group caused harm, e.g., Summers v. Tice (1948)
 V.    Defenses to liability
       A. Contributory Negligence: victim is also at fault
       B. Assumption of Risk: victim took up the risk the risk
       C. Prescription
VI.    Strict Liability (Mostly Products)
       A. From contract to negligence: death of the privity limitation
       B. From negligence to strict liability:
       C. From strict liability to negligence: the design defect and manufacturing defect tests




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                                                                                     A. Campbell Austin
                                                                                  acaustin@law.upenn.edu



                                       NEGLIGENCE
I. Duty
    A. Generally, REASONABLE CARE.
       1. Generally, no Duty to others, e.g., Randi W. v. Muroc Joint Unified School District (vice-
            principal’s recommendations included no reference to sexual misconduct, no duty.)
       2. NO OBLIGATION TO RESCUE.
       3. PARTIAL HELP - undertaking: If you start to help, then you have to finish.
    B. SPECIAL RELATIONSHIPS
       1. Lifeguards/firemen/etc. – part undertaking…
       2. Caretaking relationships.
       3. Innkeeper/Railroad/etc. – guest: innkeeper/common carrier must help.
       4. Psychiatrists – must warn endangered third party. Tarasoff v. Calif. Board of Regents.
       5. Doctor doesn’t have duty to warn public about AIDS victim – no foreseeable victim
       6. Bartender doesn’t have duty – hasn’t ―taken charge‖ of patron
    C. LAND OWNERSHIP
       1. Undiscovered trespassers - No Duty of Care
       2. Licensees: Duty to inform of hidden hazards, don’t have to inspect
       3. Invitees - Business guests/Customers: Duty to keep place safe, inform of hazards, inspect.
       4. Many jurisdictions have thrown out these distinctions, now: reasonableness.
       5. Also: Attractive nuisance (e.g., swimming pools) – applies to children
    D. 3rd PARTIES:
       1. No Privity = no duty: Moch v. Rensselaer Water (no water for burning house – no privity, so
            no duty.)
       2. Privity = no duty: Strauss v. Belle Realty Co. (guy falls during blackout – no K with Power
            Co, so no duty)
       3. SOCIAL HOST – e.g., Reynolds v. Hicks (drunk kid brother at wedding)
       4. NEGLIGENT ENTRUSTMENT, e.g., Vince v. Wilson (aunt buys car for unlicensed kid)
    E. GOVERNMENT NO DUTY RULE - POLICY
       1. If firemen or cops fail to rescue, they CANNOT BE SUED – Riss v. City of NY (lye in face
            after request to police for help)
       2. Courts will work hard to make no duty: Cuffy v. City of NY. (test: police promise, knowledge,
            direct contact, reliance by victim)
       3. Sorichetti v. City of NY – court orders directing discretionary police action, creates duty.
       4. Fed Tort Claims Act:
            (a) Policy decisions – no liability – ―fraught with policy considerations‖
            (b) Ministerial decisions (execution of action – DUTY, e.g., Cope v. Scott (accident in rock
                 creek park)
    F. SPECIAL CASES: Reasonableness standard exceptions:
       1. Children: no duty; generally incapable of negligence—they’re careless all the time.
       2. Physical Handicaps: disability counts as one of the circumstances
       3. Mental Handicaps: NO EXCEPTION – reasonable person standard
       4. Learners/Beginners: NO EXCEPTION – reasonable person standard
       5. Professionals: NATIONAL STANDARD
       6. Medical Professionals: NATIONAL STANDARD (sometimes LOCAL STANDARD)
    G. FAMILY DUTY
       1. ―Reasonable Parent‖ test‖ e.g., Broadbent v. Broadbent (kid drowns while mother on phone)
       2. 5 arguments for immunity
            (a) Disturbs domestic tranquility
            (b) Danger of fraud of collusion against insurance.
            (c) Depleting family resources
            (d) Possibility of enriching parents for kid’s death
            (e) Interference with parental discipline & authority – micromanagement by court?
       3. Culture: Lundman v. McKown (kid dies in Christian science family bec. No doc.) kid’s life is
            more important than religion.


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                                                                                      A. Campbell Austin
                                                                                    acaustin@law.upenn.edu

II. Breach: Negligence/Carelessness/Reasonable Care
    A. REASONABLE PERSON STANDARD: Brown v. Kendall (fighting dogs)
    B. HAND FORMULA: Economic analysis, US v. Carroll Towing (barge with no precautions)
       1. [Burden/expense of precaution] < [Probability of Accident] x [Loss of accident]
       2. Ultimately, we want to minimize cost, so if the prevention is more expensive than the
           expected accident cost, then no negligence—strict liability, maybe, but not negligence.
       3. POLICY – ECONOMIC EFFICIENCY.
       4. Unlikely Harms: Adams v. Bullock (kid with wire on trolley track – low probability v. high
           cost – no negl.)
    C. CUSTOMARY PRACTICE NO DEFENSE e.g., Tugboats with no radio
       1. Whole industry could lag reasonableness standard.
    D. STATUTES: NEGLIGENCE PER SE: Absolute standard (rare) – still have to prove cause
       1. Violating Statutes is always negligence: e.g., Martin v. Herzog (buggy/car accident)
       2. Falling asleep at the wheel.
       3. Special circumstances can defeat it, though—go to purpose of the statute, e.g., Tedla v.
           Ellman (bros walking w/ traffic, hit, sue, win.)
       4. Also, statute must be aligned
           (a) E.g., Sheep not in pens, therefore sheep getting swept overboard is not result of
                 negligence—pens were for prevention of disease, not for prevention of losing animals—
           (b) The bad thing that happened must be what the statute was supposed to prevent.
    E. Informed Consent
       1. Matthies v. Mastromonaco (doc has to provide all reasonable options to let patient make a
           choice)
    F. RES IPSA LOQUITUR: “The thing speaks for itself”
       1. Obvious Carelessness—only have to show harm: Elements:
           (a) This accident could only have been caused by negligence. E.g., Byrne v. Boadle (barrel
                 falling out of window)
           (b) Defendant had to be in control of instrument, with constructive notice, e.g., Negri v. Stop
                 & Shop (baby food on floor) v. Gordon v. American Museum (wax paper on floor)
           (c) Must not have been due to any voluntary action by the plaintiff, or contrib. neg.
       2. Multiple Ds ok: e.g., Ybarra v.Spangard (not sure which D caused harm, all pay)
       3. Sometimes vicarous liability, but not all, e.g., Connolly v. Nicollet Hotel (chair flies out of
           window)
       4. Burden not on P to come up with other explanations, e.g., McDougald v. Perry (truck loses
           tire)
       5. Defenses: D can still prove he wasn’t negligent.
III.Causation
    A. CAUSE IN FACT: UNTAKEN PRECAUTION CAUSED THE HARM
       1. Have to show likelihood that untaken precaution would have prevented bad thing from
          happening. Stubbs v. City of Rochester (polluted city drinking water)
       2. EXPERT WITNESSES:
          (a) Expert Evidence can prove cause: e.g., Zuchowicz v. US (woman prescribed overdose of
              danocrine, dies = cause)
          (b) Factors Test: Daubert v. Merrell Dow (scotus, so not binding on states)
                (i) Scientific method + Peer review & publication
               (ii) Known or potential rate of error
              (iii) General acceptance
              (iv) Court has gatekeeping function, rather than scientific community.
       3. BUT FOR CAUSE TEST (Cardozo & Traynor): Negligent act deemed wrongful if:
          (a) Act increased the chances that that accident would happen
          (b) Mishap of that kind actually happened.
          (c) Usually a 51% standard.
       4. LOSS OF A CHANCE: Medical cases




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                                                                                       A. Campbell Austin
                                                                                    acaustin@law.upenn.edu

          (a) Cancer case, misdiagnosed, but low cost—doctor couldn’t have helped anyway.
              Liability? Again, we can’t encourage that behavior, because every so often, the doctor
              could have helped, and his failure cost the patient’s life.
          (b) So while traditional rule says 51%, in this case, the doctor will help by less than 50%, but
              we want to encourage performance, so liability.
          (c) In this case we assign damages in the proportion of the proportion the doctor could have
              helped—so, 1M in total damages, and could have helped 10% of the time, then he pays
              100K.—you’d prefer that you knew which cases he should have paid the million on, and
              just pay those—since you can’t, you get him for 100K ten times.
          (d) Doesn’t apply in non-medical cases:
               (i) High precision of probability/percentage in medicine
       5. MULTIPLE TORTFEASORS
          (a) If we can’t find the exact defendant, we can get close: E.g., Summers v. Tice. (one of two
              negligent hunters shoot one victim, both are 50% responsible)
          (b) Market share method: E.g., Hymowitz v. Eli Lilly (DES drug causes birth defects, lots of
              manufacturers, etc.)
       6. TOXIC HARMS
          (a) Latent time problems
          (b) Aggregate exposure tough to define in advance
          (c) What standard of proof? (e.g., breast implant cases—no scientific proof either way)
    B. PROXIMATE CAUSE: HARM IS LEGALLY ATTRIBUTABLE TO DEFENDANT
       1. UNFORSEEABLE HARM:
          (a) Negligence must have made the harm more likely to be causation. (and this must have
              been foreseeable)
          (b) Manner in which harm occurs does not need to be foreseeable—rat as cause of explosion
              when guy was cleaning machines with gasoline by lantern-light.
       2. UNFORSEEABLE EXTENT OF HARM: generally, liability.
          (a) If harm is dramatically worse than was expected, liability still holds.
          (b) EGGSHELL PLAINTIFF STILL RECOVERS: E.g., Benn v. Thomas (guy with heart
              condition in car hit by D, guy has heart attack 6 days later) – take P as you find him.\
          (c) We compensate bankers more than bums when they get damaged—so treat eggshell
              plaintiffs the same way.
          (d) Later harms: E.g., Anaya v. Superior Court (plaintiff is put in ambulance, ambulance
              crashes).
          (e) Exception: some medical conditions: e.g., Steinhauser v. Hertz (girl goes schitzo from car
              accident)
       3. UNFORSEEABLE TYPE OF HARM: generally, no liability.
          (a) Reason for negligence must be similar to reason for harm
          (b) Liability: In re Polemis (worker drops board, boat explodes) – liability holds here, but it’s
              outlier.
          (c) No liability: Overseas Tankship (UK) v. Morts Dock (Wagon Mound) (oil released from
              ship, ship leaves, fire starts & burns another ship & dock; court finds D not liable) -
              Polemis is ―no longer good law‖
       4. UNFORSEEABILE MANNER: generally no liability
          (a) Intervening tortuous/criminal actor, no liability. McLaughlin v. Mine Safety Appliances
              (plaintiff burned after fireman fails to read instructions on heat pad)
       5. UNEXPECTED VICTIM: sometimes liability, sometimes not.
          (a) Foreseeability: E.g., Palsgraf v. Long Island RR (1928): Negligence is limited to ―the
              orbit of danger as disclosed to the eye of reasonable vigilance would be the orbit of duty‖
          (b) Uncommon position – most states allow some liability to unforeseeable victim.
       6. LIMITS ON UNFORSEEN HARM: Kinsman cases
          (a) Kinsman I (buffalo river, ice floes, boat comes loose, dam formed, lots of flooding, court
              holds boat liable)
          (b) Kinsman II – damages to local commerce due to bridge being out don’t stick.
       7. What the cases stand for:




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                                                                                       A. Campbell Austin
                                                                                  acaustin@law.upenn.edu

            (a) Polemis: All direct harm (some kind of harm was foreseeable, and it doesn’t matter
                if all the harm that happened was specifically foreseeable).
            (b) Wagon Mound: All foreseeable harm (didn’t foresee fire, so not liable)
            (c) Palsgraf: “Orbit of reasonable danger” (Judgment call.)
IV.Special Case of Non-Physical Harm
    A. EMOTIONAL HARM – PHYSICAL IMPACT REQUIREMENT
       1. Historically ignored, or required physical injury as well
       2. Beginning in 1965, No physical impact Required in NJ: Falzone v. Busch (wife nearly hit by
          car) p.261 b)
          (a) medical evidence of emotional harm is sufficient.
       3. Metro-North RR v. Buckley (asbestos guy working at Grand Central) p.270 (521 US 424)
          (a) P claims he’s afraid of developing cancer.
          (b) US still applies ―impact‖ standard –
       4. Portee v. Jaffee (kid in elevator) p.282 (
          (a) Old Test (from Dillon): zone of danger
          (b) New Factors Test:
                 (i) Death or serious physical injury
                (ii) Marital or intimate familial relationship
               (iii) Observation of death or injury at the scene
               (iv) Resulting severe emotional distress
       5. FACTORS CONSIDERED IN EMOTIONAL HARM:
          (a) Physical Impact
          (b) Immediacy of Harm
          (c) Foreseeability of Harm
          (d) Zone of Danger
          (e) Closeness of Relationship
          (f) Physical manifestation of harm
          (g) Physical Impact
          (h) Extensive contact
          (i) Duration of emotional harm
          (j) Eggshell Psyche
          (k) Sensory Perception
          (l) Severity of Physical Harm (or observed physical harm) and/or death
          (m) Windows of damage
          (n) Direct or indirect harm
          (o) Witnessing of accident? Consequences?
          (p) Loss of Consideration (married types)
    B. PROCREATION & END OF LIFE
       1. Tort liability of physicians involved in sterilization . . .
          (a) Emerson v. Magendantz (failed sterilization, kid born HP)
                 (i) Mitigation? (is joy of kid mitigation (certainly not economic mitigation)? Could
                     parents have put kid up for adoption? Could mother have aborted kid?)
       2. Relevance of reasons for the choice?
          (a) Financial?
          (b) Good parents?
          (c) Mother’s health
          (d) Avoid more kids with defects?
V.Damages
    A. RESTITUTION DAMAGE INTEREST + PUNITIVE DAMAGES
       1. Restore victim to where he started.
       2. Determination only relative to harm suffered (not assets of the defendant)
    B. COMPENSATORY DAMAGES
       1. PECUNIARY DAMAGES (calculated – easy)
          (a) Medical costs
          (b) Therapy



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                                                                                        A. Campbell Austin
                                                                                     acaustin@law.upenn.edu

          (c) Lost Wages
          PAIN & SUFFERING (tough.)
          2.
          (a) Types of damages: e.g., Wry v. Dial (engineer burned, has bad skin, scarred forever,
               emotionally damaged, etc.
                 (i) Lots of damages: Current bills, Future bills (no discount for insurance), Pain &
                     suffering, Loss of consortium, Education/therapy, Future inventions, Future kids
          (b) Are Juries even capable of figuring out Pain & Suffering?
                 (i) Pro:
                     (1.) Not really, but it’s a price of having a jury system
                     (2.) P&S is pretty subjective, so having subjective system for monitoring it may
                          make some sense.
                     (3.) Want to have 12 decisioners, rather than just one (judge)
                (ii) Con:
                     (1.) Better to have caps (from, say, legislature)
                     (2.) Arbitrary & capricious
          (c) SOURCES OF JURY VERDICT INCONSISTENCY
                 (i) Sample bias of jury population
                (ii) Fact differences case by case
               (iii) Jurisdictional differences
               (iv) Defendant’s wealth
                (v) Plaintiff’s ―worth‖
               (vi) General Random Error
          (d) HOW DO WE GET CONSISTENCY?
                 (i) Legislative scheme – e.g., Caps + exceptions
                (ii) Build a common law system of guideposts
               (iii) Itemization of ―types‖ of awards.
                     (1.) Separate categories for ―loss of life‖ v. ―pain & suffering‖, e.g., McDougald v.
                          Garber (permanently comatose P)
                          1.) Majority says – one big category.
                          2.) Dissent: break it apart—P&S is subjective perception, Loss of Life is
                               objective fact.
               (iv) Set a value on life, then, for everything short of that, deduct.
    C. PUNITIVE DAMAGES
       1. Dependent on the wealth of the defendant, and the plaintiff
       2. ALL ABOUT DETERRENCE
          (a) Taylor v. Superior Court (guy with drinking problem takes job delivering booze to bar)
          (b) Has to be related to cause of action – can’t just go around kicking the shit out of
               companies. E.g., State Farm v. Campbell
    D. COLLATERAL SOURCE RULE & SUBROGATION CLAUSES
       1. Health Insurance pays for injuries
       2. Victim also sues negligent driver, wins.
       3. Collateral Source Rule says Ds don’t skip out. Have to pay anyway.
       4. But P shouldn’t get windfall either, right?
       5. So . . . Bunch of complicated maneuvers that effectively require compensation of health
          insurance company from winnings. Subrogation clause usually necessary.
    E. MULTIPLE PARTIES – JOINT & SEVERAL LIABILITY
       1. Three implementations:
          (a) ―pure‖ CmplN – just take proportion of faults.
          (b) If P’s cmplN ≥ D(responsibility), then zero. ―only when not as great as‖.
               so if P and D are equally at fault, then zero recovery.
               Ds can be aggregated or split up.
          (c) If P’s cmplN > D(responsibility), then zero. ―when no greater than‖
       2. e.g.: A (40%), B (30%), C(10%), D(20%), 40K damages, B,C,D at fault
          (a) B 12K, C 4K, D 8K = 24K payment.




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                                                                                       A. Campbell Austin
                                                                                    acaustin@law.upenn.edu

               (b) Aggregate, P recovers all 24K.
                   not aggregate, P recovers nothing.
                   if any one D has greater fault than P, then P recovers only from him.
               (c) Aggregate, P recovers all 24K.
                   not aggregate, P recovers nothing.
                   if any one D has greater than or equal fault as P, then P recovers only from him.
          3.   Now, if D drops out . . .
               (a) Under Uniform Act, we redistribute the harm among the remaining parties:
                   A (50%), B (37.5%) + C (12.5%) = 20K
                   (relatively fair allocation of D’s burden)
               (b) Under many states with J&S, we just redistribute the total damages among remaining Ds.
                   A (40%), B (45%) + C (15%) = 24K
                   (punishes other Ds)
               (c) Under many states with S, then we keep original allocations, and P just doesn’t recover
                   from D.
                   A (40%), B(30%) + C (10%) = 16K
                   (punishes P)
          4.   Now, if C is also hurt, for 25K . . .
               (a) Assign portion of each harm by fault of each party. (so, C gets back (1 - .9)*25K,
                   distributed among A, B, and D; and A gets back (1 - .4)*40K, distributed among B, C,
                   and D.)
               (b) Netting cross-damages hurts when insurance companies are picking up the bill.
                   (assuming no insurance, then we can just net out cross-damages)

                                           DEFENSES
I. Contributory Negligence: If P is negligent too.
    A. If harm regardless of P’s negligence, then it’s not contributory.
       1. It’s not careless to be on platform because wall might fall, but because platform might fall.
    B. Old system – zero recovery
    C. Some exceptions: Last Clear Chance, Recklessness – usually, jury would just apply comparative
       standard.
    D. COMPARATIVE NEGLIGENCE – new system, based on balance of fault.
       1. Three implementations:
            (a) ―pure‖ CN – just take proportion of faults.
            (b) If P’s CN => D(N), then zero. ―CN only when not as great as‖.
                so if P and D are equally at fault, then zero recovery.
            (c) If P’s CN > D(N), then zero. ―CN when no greater than‖
II. Assumption of Risk – if P has waived D’s liability
    A. GENERALLY: ASSUMPTION = WAIVER: I hereby assume all risk!
       1. But if the victim can find a loophole, the court will give it to them.
       2. Also, one can’t sign waiver of gross negligence. (well, you can, but no court will uphold it.)
       3. Further, can’t sign one of them under duress—e.g., emergency room waiver forms.
    B. TYPE 1: PRIMARY ASSUMPTION OF RISK (sign a waiver)
       1. Exceptions to waiver: Dalury v. SKI ltd (guy signs release, skis, runs into pole, sues, wins.)
    C. TYPE 2: IMPLIED ASSUMPTION OF RISK
       1. No negligence if risk is assumed by victim: Murphy v. Steeplechase Amusements (the flopper)
       2. If you agree that negligence is present, then no case Davidoff v. Metropolitan Baseball Club
       3. This is now moving toward percentage of risk—so you can claim a chunk of damages, up to
            the proportion of risk that you’ve assumed.
    D. TYPE 3: SECONDARY IMPLIED ASSUMPTION OF RISK – Davenport v. Cotton Hope (lights
       in staircase) when you know about D’s negligence, but subject yourself to it anyway.
III. Preclusion: statute absolves D of liability
    A. If you comply with Federal Statute, you’re covered, because you weren’t careless.
    B. SCOTUS says claims about failure to warn are preempted, because congress has spoken.



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                                                                                       A. Campbell Austin
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               STRICT LIABILITY: CAUSE & HARM ONLY
I. Inherently Dangerous Activities
    A. If an activity is dangerous even if done carefully, somebody might still be hurt, and we want
       to hold them to a higher standard strict liability is this pressure.
       1. e.g., Rylands v. Fletcher (water in reservoir ―escapes and does mischief‖)
       2. Blasting is good example: Sullivan v. Dunham (dynamited tree hits P on highway, court holds
            blasters liable)
       3. But exceptions:
            (a) Losee v. Buchanan (holding that owner of exploding boiler not liable, because public
                 policy supports productive use of land.)
                   (i) Draws distinction between accidental explosions and intentional blasting.
                  (ii) plus, everybody gets to share the benefits of industrialization, so everybody has to
                       bear the cost.
            (b) Turner v. Big Lake Oil Co (holding that reservoir is a ―natural use‖ and thus not subject
                 to strict liability.)
       4. Indiana Harbor Railroad v. American Cyanamid (RR sues chemical manufacturer to settle
            claims against RR for chemical spill) p.511 (916 F2d 1174)
            (a) Use abnormally dangerous test (below)
            (b) Being careful would have prevented this. Negligence is more appropriate.
    B. STANDARDS
       1. Dangerous condition escapes, does mischief: Rylands v. Fletcher (mill pond in mine)
       2. 1st Restatement: ―ultrahazardous‖ activity: carefulness doesn’t eliminate danger.
            (a) High risk
            (b) Great Harm
            (c) No amount of carefulness will remove risks
            (d) Common usage
            (e) Inappropriate activity in given location
            (f) Low value to community.
       3. 2nd Restatement: ―abnormally dangerous‖ test:
            (a) Degree & Gravity of risk
            (b) Impact of carefulness
            (c) Local-commonality of action
            (d) Value of activity
II.Products Liability
    A. LIABILITY SCHEMES:
       1. Most extreme: absolute liability
          (a) Get rid of causation, fault, etc.
          (b) NO DEFENSE.
       2. Strict liability
          (a) Need causation: in-fact and proximate.
          (b) Fault doesn’t matter.
          (c) Defense: Consumer’s fault.
       3. Negligence:
          (a) Reasonable care – need fault and causation.
          (b) Defense: Contributory negligence
    B. MANUFACTURING DEFECTS
       1. DEVIATION FROM INTENDED DESIGN– assembly screwup: MacPherson v. Buick
          Motors (wheel breaks; auto manufacturer strictly liable)
          (a) Consumer expectations (and manufacturer’s expectations, too!)
          (b) Don’t need to consider reasonableness—manufacturers consider defect is defective.
       2. NO PRIVITY REQUIREMENT BETWEEN BUYER & SELLER for mass production.
          (a) E.g., blender with missing screw, which causes it to blow up.
       3. CREATION OF STRICT LIABILITY: Escola v. Coca-Cola Bottling of Fresno (waitress
          cuts hand on exploding bottle; strict liability created)


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                                                                                       A. Campbell Austin
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          (a) Truly strict liability; if there’s a flaw, then they’re liable, regardless of how careful the
               manufacturer is.
          (b) Manufacturer knows about manufacturing process, so plaintiff can’t argue safety of
               process.
          (c) It’s socially valuable for the manufacturer to act as insurer; manuf. can spread cost of rare
               losses over all customers.
       4. ENTIRE DISTRBUTION CHAIN IS LIABLE
          (a) E.g., broken peanut bottle bought at Kmart; Kmart is liable, just as Planters Peanuts is
               liable.
    C. DESIGN DEFECTS
       1. More like negligence: Manufacturing done correctly, but design was flawed
          (a) Not self-defining like manufacturing defects.
          (b) Soule – consumer expectations aren’t coherent.
       2. DESIGN FACTORS TEST e.g., Barker v. Lull Engineering (high-lift loader drops wood on
          guy who jumped for cover):
          (a) Gravity of danger posed by design
          (b) Likelihood that danger would happen
          (c) Mechanical feasibility of a safer design
          (d) Financial cost of design
          (e) Alternative consequences to the product
       3. CONSUMER EXPECTATIONS TEST
          (a) Ortho – consumers do have expectations – OPEN & OBVIOUS
          (b) Camacho v. Honda Motor Co. (motorcycle sans leg protectors, not a problem)
       4. REASONABLE ALTERNATIVE DESIGN OPTION
          (a) More like negligence in this respect
          (b) (Plaintiff has to show negligent design)
          (c) Cost-benefit analysis appropriate.
       5. EXPERT WITNESSES REQUIRED FOR ALT. DESIGN: Soule v. GM (datsun destroyes
          camaro, front wheel crushes passenger foot space, Expert testimony on alternative designs is a
          separate test.)
       6. UNIQUE DESIGNS get exception, e.g., Dreisonstok v. Volkswagenwerk AG (VW microbus
          – forward passenger compartment at extreme front of bus)
    D. WARNING DEFECTS
       1. More like negligence—―could warning have been better‖?
       2. HEEDING PRESUMPTION
          (a) Presumption that someone will read a warning
          (b) If warning is present, then victim could be comparatively negligent.
          (c) ―heeding presumption‖ must be refuted by D with inadequate warning for him to survive
               the suit.
       3. WARNINGS MUST MEET MINIMUM LEVEL OF DESCRIPTION: Ragans v. Miriam
          Collins-Palm Beach Labs (hairstylist accidentally mis-mixes perm chemicals, blows up face)
       4. KEEP WARNINGS LIMITED copious warnings cause problems: e.g., Hood v. Ryobi
          America Corp. (lots of warnings, even tho no ―blade might fly off‖, still cool.)
       5. LEARNED INTERMEDIARY DOCTRINE: Edwards v. Basel Pharma. (nicotine patches
          + smoking = cardiac arrest)
          (a) No duty to warn if Doc has to give prescription.
          (b) Exceptions:
                 (i) Mass Immunization – no doc-patient interaction.
                (ii) When FDA says ―warn the patient.‖
              (iii) Commercial advertising – when advertising directly to consumers, all warnings must
                     be present.
       6. UNKNOWN DANGERS AT DISTRIBUTION: Vassallo v. Baxter Healthcare Corp (in the
          future, manufacturers aren’t responsible for reporting new breast implant data)
          (a) Exception: Beshada – even if you didn’t know, you’re still liable.
          (b) Restatement 402A comment J: ―product is defective because of inadequate warnings
               when the foreseeable risks of hamr posed by the product could have been reduced or



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               avoided by the provision of reasonable instructions or warnings . . . the seller is required
               to give warning against a danger if he has knowledge, or . . .could have knowledge‖
          (c) Diversity of opinion . . .
                 (i) Strict liability = company has to warn, fix, etc., whatever.
                (ii) Negligence = company just has to do what’s reasonable.
          (d) Feldman NJ case (NJ 1984) – rejects ex post rule for non-asbestos cases. (teeth
               discoloration)
                 (i) D is only liable for defective warnings
                (ii) Ex ante approach – looks a lot like negligence; asks what D knew or should have
                     known
    E. EMPLOYER MODIFICATIONS & WORKMENS COMP
       1. Loophole in workmens’ comp scheme: sue manufacturer of defective equipment used at
          work.
       2. e.g., Jones v. Ryobi (printing press with safety device removed)
          (a) In fact, the 3rd party who modified the machine was liable.
          (b) Even if such modification was foreseeable, Manufacturer isn’t liable.
          (c) Policy:
                 (i) Deterrence: manufacturer has some responsibility, but most of it rests with employer
                     . . . so imposing liability on manufacturer isn’t really effective here in solving the
                     problem.
                (ii) Loss Spreading: doesn’t make much sense to spread cost to companies who don’t
                     modify the machine.
               (iii) Of course, it Might not be a workable machine if every purchaser removes the
                     guards.
       3. POST-SALE WARNING NEEDED AFTER NEWLY FORESEEABLE 3 RD PARTY
          MODIFICATION Liriano v. Hobart (immigrant kid in meat dept loses hand in grinder)
          (a) ―No warning‖ = defective product (Lugo)
          (b) Manufacturer is responsible for foreseeable modifications, but unforeseen 3 rd party
               modification can bar liability of manuf. (Robinson)
          (c) If product is made to work easily both with or without guard, then manuf. is liable.
               (Lopez)
          (d) Also, Hobart has post-sale duty to warn of newly recognized danger. (Cover)
       4. NY is outlier on POST-SALE WARNING
          (a) Most states find that if a modification is unforeseeable, then the manufacturer isn’t liable.
          (b) If it’s foreseeable, then liable, regardless of 3rd party modifications.
          (c) Reasonableness standard.
          (d) Also an outlier, because it allows manufacturers to recover from employers.
       5. BULK SUPPLIERS: Similar to Learned Intermediary Doctrine, above.
    F. BEYOND PRODUCTS:
       1. HYBRID TRANSACTIONS: Royer v. Catholic Medical (defective fake knee, hospital isn’t
          a ―supplier of goods,‖ so not liable for defective product)
       2. RETAILERS LIABLE: Vandemark v. Ford et al. (retailer liable, since Ds can apportion
          costs better between retailer and manufacturer)
III. Products Liability Defenses
    A. Negligence defenses:
       1. Contributory era – 100% bar
       2. Comparative era – proportional fault
    B. Products defenses:
       1. Pre-comparative era
          (a) Negligence by victim = 100% defense
       2. Comparative era
          (a) Comparative – partial.
          (b) E.g., P puts head under back of truck while manipulating controls. P’s family sues—says
               design is defective. D says P was negligent.
                (i) Strict liability – no defense, even if contributory negligence.
                    assumption of risk – voluntarily accepting known danger. (if yes, then complete bar)


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                                                                                            A. Campbell Austin
                                                                                         acaustin@law.upenn.edu

           3.   Failure to discover cases –
                (a) No duty to inspect for defects – not a defense.
                (b) But if you’re negligent, then no luck . . . e.g., Sanchez v. GM (guy dies with the heifers)
IV.Animals
    A. Classifed as Wild or Domestic by species
    B. Strict liability - for all Wild animals.
       1. If animal is under control, then no liability (e.g., kid reaches into lion cage)
       2. Why? If the animal inevitably dangerous, even if tended carefully—telling the owner to be
            careful isn’t enough (naturally)—so they’re liable all the time.
    C. One Bite Rule - for domestic animals
       1. Utility of the animal – domestic animals are useful, so we don’t want to impose a high
            liability cost on their use.




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                                                                                     A. Campbell Austin
                                                                                  acaustin@law.upenn.edu



                  NO-FAULT: 9-11 Compensation Fund
I.Terrorism: Three Scenarios in Tort
    A. Huge Attack, like 9-11
    B. Heavily populated sites (e.g., sports stadium)
    C. Localized acts of Terror
II.The No-Fault Option:
    A. General Idea:
       1. Collective notion that basic needs recovery ought to be the norm
       2. Social Welfare perspective
       3. Normal program: ―Horizontal Equity‖
           (a) If you can show that you’re in the class of victims, then you get fixed calculated amount.
    B. Problems, Generally:
       1. Workmens comp example: why should worker get compensated for accident he would have to
           bear himself if it happened off the job?
       2. Problems with adequate recovery—no fault is expensive.
       3. No Deterrence
       4. No Corrective Justice
    C. 9-11 Approaches:
       1. 9-11 Statutory Model
           (a) Objectives:
                  (i) Protect airline industry
                 (ii) Protect port authority
                (iii) Compensate victims
                (iv) Political cover.
       2. Model designed by Special Master
           (a) Collateral Source Offset – insurance coverage dumped first
           (b) Economic loss – Max cap
           (c) Non-economic Loss – scheduled benefit of 250K per death
       3. Hybrid Model:
           (a) Level of economic compensation set as in tort.
           (b) At the same time, there’s huge deductions from this award from the collateral source
                offset.
           (c) But minimum recovery set.
    D. Rabin’s Idea: Merge Tort and No-Fault:
       1. Hit Deterrence & Corrective Justice
       2. Compensate Victims.
III.Unique events of 9-11 and Other systems
    A. Pattern of implementation by Special Master
       1. ―Edge up closely to the range of tort compensation to make no-fault attractive enough that an
            offer wouldn’t be refused‖
       2. But minimum recovery too.
       3. Combination of normal no-fault Horizontal Equity and Tort eggshell plaintiff approach.
    B. Other Models
       1. Israel: Treat terrorism victims as fallen soldiers – pensions for families
       2. Northern Ireland: workers-compensation type tariff of scheduled benefits, flat sum recovery
            for body parts or mental disability.
       3. California Crime Victim compensation
       4. Victims of Crime Act (federal)
            (a) Pattern: Low ceilings on max. recovery
IV.Justifying Principles?
    A. Generally:
       1. Make victims whole
       2. But no deterrence



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                                                                                    A. Campbell Austin
                                                                                  acaustin@law.upenn.edu

       3. What distinguishes victims?
    B. Workers comp? Early objections – if worker is hurt at work, or in the street, he suffers the same
       loss—why compensation just for on the job injury?
    C. Foreseeability – Tough stance: victims on airlines recover; nothing for people on the ground
       1. Negligence on plane – unsecured flight deck
       2. No foreseeability that terrorists would crash plane into buildings.
    D. Holes in the theories:
       1. ―Enemy attacks‖ isn’t really stable—what about Oklahoma City bombing?
       2. Terrorism itself is pretty weak, too . . . other than national bereavement. What about DC
            Sniper?
       3. . . . and then there’s the issue of insolvency in mass-tort issues
    E. Conclusion (?): All of these problems with line-drawing (and cost-assignment) leave us dependent
       on tort, because fault is what we’ve got.




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