Torts II Outline Professor Landau Spring 1999 Products Liability Most common trend of courts is to hold manufacturers and suppliers of defective products strictly liable in tort to consumers and users for injures caused by defect. 1. Rationale for S/L – maximum protection demanded by interest in human life and safety: liability without fault is imposed here as a matter of public policy, due to the grave risk of harm in placing defective porducts in the stream of commerce. a. D better able to bear risk: A D manufacturer is usually better able to distribute or insure against the risk of loss than is the innocent consumer, i.e. the manuf. Can better estimate the risks and sprea the cost over his operations or pass it on to the public in the form of higher prices. b. Negligence action may not be adequate remedy: Negligence is often too difficult to prove in product cases to be an adequate remedy. c. Incentive for safer products: Moreover, imposing s/l may increase the incentive for the manufacture and supply of safer products. 2. Liability may not be absolute: P must prove both a defect in the product that is attributable to the manuf. Or supplier, and that the defect caused the injury. So, although liability is strict, it is not absolute. 3. Liability may not even be nonfault: type of defect may control whether the applicable law is that of strict liablility or of neglignece. Seems S/L for manufacturing defects; but design defects and warning defect cases are decided on negligence. a. 3 kinds of defects: manufacturing defects, design defects and inadequate warnings 1. manufacturing defects: product not in condition that manufacturer intended at the time it left his control 2. design defects: design presents undue risk of harm in normal use a. Unreasonable risk: product may be defective by posing an unreasonable risk to consumers • limitation: D will not be held liable for manuf. oR selling a product that simply wears out with normal use. • Product, like handgun, that functions as intended and is dangerous in its ordinary use does not have a defect and cannot give rise to liability based on defect. b. Crashworthiness: manuf. Can be held liable for failure to design its product so as to miminize foreseeable harm casued by other parties or conditions. I.e. auto manuf. May be liable for not designing its cars to withstand at least some highway crashes caused by negligent drivers c. 3 tests for design defects 1. feasible alternative test/Danger utility test: prevailing approach, the question for the jury is whether D could have removed the danger w/o serious adverse impact on the product’s utility and price. Factors: • usefulness of the product • type and purpose of the product (functional utility of design) • style, attractiveness, and marketablility of product (psychological utility) • number and severity of injuries actually resulting from current design (social cost) • cost of design changes to alleviate problem (safety cost-measured in both price and reduced utility of the product) • user’s anticiapated awareness of inherent dangers in product and their avoidability • feasibility of spreading the loss by adjustments in the product’s price Note: Calif. Shifted to manuf. The burden of proving that the benefits of its design outweigh the risks of danger inherent in that design (Barker v. Lull Engineering) Policy arguments: adv.-forces manufacturer to make safer products. Disadv – forcing manf. To add safety features increases cost that goes to consumers 2. consumer expectation test: P must prove that the product did not perform as safely as an ordinary consumer would have expected when used in an intended or reasonably forseeable manner a. consumer expectation test generally not relevant when the victim is not the buyer or user b. food cases – widely applied in food cases. If natural, bone in chicken enchilada, then must prove negligence. If foreign substance in enchilada, then s/l. 3. Combined test: Some courts explicityly adopt a combined view under which recovery is permitted if the plaintiff establishes either(a) that the product failed to perform as safely as an ordinary consumer would expect when it is used in an intended or reasonably foreseeable manner; or (b) that the product’s design was defective under the feasibility analysis d. Scientifically unknowable risks (dangers not foreseeable at the time of marketing): no matter what test is used for defect, must look at information available at time of manuf. Or release • If the danger feasibly may be eliminated, the manuf. Must do so before continuing to market the product or face liability for selling defective product • If the risk cannot be eliminated, the product is unavoidably unsafe. Manuf. Must then provide a suitable warning or, if the danger outweighs the benefits from the product, discontinue distribution altogether. • A manuf. Is under a duty to take reasonable steps to warn earlier purchasers of already marketed products about defects that only recently became discoverable. 3. Inadequate warnings: defects may arise from packaging and inadequate instructions, warnings, labels, etc. Inadequate warnings may make a product defective when the dangers are not apparent to consumers and users. a. unexpected dangers: The danger must be something that a reasonable user would have no reason to expect or anticipate in the product Ex: manuf of flight of steps does not have duty to warn of dangers posed by use of steps w/o handrail b/c danger is obvious If danger unexpected by D b/c could not be anticipated, most courts analyze using negligence standard. b. Unavoidably unsafe products: products, like knives, are not defective b/c no way to make safe • Cannot avoid liability for a design defect by giving adequate warning. • In states following feasible alternative test, an adequate warning may suffice to avoid liability only if the product’s deign is not defective under the test. • In states following consumer expectation test, the obviousness of a danger may well make the product nondefective. There, no need to warn to avoid liability. c. What makes warning adequate? • Warning attached to an unreasonably dangerous product may be inadequate if it doesn’t specify the risk the product presents, if it is inconsistent with how the product is to be used, or if it does not give the reason for the warning • Every foreseeable danger need not be warned against b/c list of “foolish” practices warned against would be so long it would render all the warnings useless. • Warning must reach the person at risk from the danger -Learned intermediary exception – in case of pharmaceuticals, an adequate warning need reach only the prescribing physician except for oral contraceptives warning must go to ultimate consumer. 4. who is liable? • any party who causes the product to enter the stream of commerce or passes it on in the stream of commerce…all participants in the marketing of the product may be held strictly liable • assembler of component parts – manuf responsible for safety of all component parts • successors in interest to manuf of defective products: usually co which purchases the assets of a prior manuf, w/o expressly or impliedly assuming its liabilities, is not liable for defects in predecessor’s products but if deal was merger or continuation of old corp, if buying co agreed to assume the seller’s liability, or if the sale was a fraudulent attempt by the seller to escape liability, then liability Note: A few courts hold the new co liable when it has continued the product line in question – rationale: reaping benefits of the prior manuf activities 5. Who can sue? -Ultimate consumer or user -Bystanders (person hit by car whose brakes where defective) -Rescuers 6. Defenses a. Contributory negligence -Unreasonable misuse b. Comparative fault c. Assumption of risk – injured party must actually have known of the particular danger involved and freely decided to face it. d. Disclaimers – contractual disclaimers of liability generally have been held invalid as against public policy at least as to products liability claims involving personal injury arising out of consumer transactions. May be o.k. between two business concerns with relatively equal bargaining positions BREACH OF WARRANTY 1. express warranties: whatever seller represents to purchaser about the product (by advertising or otherwise) may be an express warranty and if warranty is breached (the product is not as represented) causing damage or injury to the purchaser relying on the representation, that purchaser has a direct action against seller on the K. 2. Implied warranties: assurance (implied in law) from the seller to the buyer that the product purchased will do no harm in normal use. a. UCC provisions: • fitness for particular purpose-where seller knows or has reason to know that the buyer is purchasing goods for a particular purpose, and is relying on the seller’s skill or judgement in supplying appropriate goods, there is implied warranty that goods are fit for that purpose • merchantability – where goods are supplied by one who deals in goods of the kind warranty is implied that they are generally fir for normal use Defenses to warranty action 1. contributory negligence 2. disclaimers 3. notice requirements – must give timely notice of breach 4. statute of limitations WORKERS’ COMPENSATION 1. exclusive remedy against employer 2. must arise out of and in the course of employment DEFAMATION PFC at c.l. 1. publication by D 2. to 3rd party 3. of a defamatory statement 4. causing harm to P PUBLICATION TO A 3RD PARTY 1. any 3rd person sufficient • remarks made by supervisor to his superiors that defame the P/employee are published by this purpose but may be protected by privilege • dictation to private secretary for purposes of transcription – some courts see secretary as alter ego and thus no publication just getting thoughts on paper-so privileged b/c of confidential relationship 2. any action by D that causes statement to be communicated to 3rd person is a publication • words, gestures, conduct: marching P handcuffed through store to security office action which would be publication 3. publication must be intentional or negligent: • if P has reason to foresee someone else would overhear or read communication 4. Three types of D a. original publisher: anyone who has any part in orignal publication is treated as an original publisher b. republishers: at c.l., republisher is someone accurately repeats someone else’s defamatory statement • rationale: last utterance may do more harm than the first • if original defamtion is libel, any republication (even oral) is libel and putting oral defamation (slander) into writing makes the repetition libel • failing to remove a defamation posted on one’s premises by someone else may also constitute a negligent republication • original defamer’s liability is increased by whatever harm the repetition causes if the republication was intended by original defamer or reasonably foreseeable. • Absolute privilege is applied for person who has legal duty to republish i.e. executor who is under legal duty to probate a will even if it contains defamations • Disseminators: (libraries, dealers or distributors of books, etc.) have limited liability. Only held to standard of due care – if have no knowledge of defamation in material or reason to know not liable HARM TO REPUTATION 1. Defamatory meaning • Must tend to lower P’s reputation in estimation of community where published or deter others from associating with the P • Must injury in the eyes of a substantial and respectable minority of community where published • How the words were reasonably understood by 3rd persons and not on what the speaker meant • In determining the meaning of statement, courts look at the fair and natural meaning the statement will be given by reasonable persons of ordinary intelligence. 2. “of and concerning” P • colloquium – P must establish the colloquium (some persons to whom the statement was published reasonably interpreted it as applying to P (i.e. fictional novel where characters are recognizable as real people) • use of wrong name – i.e. D reports “Artemus Jones” person supposedly fictitious was cavorting with woman ½ his age, and real Artemus Jones could be him • P must be living person, corporation, partnership, or other legally recognized entity • Individual claims arising from group defamations: no individual member of a class defamed may bring an action unless the group is so small that the statement may reasonably be interpreted as applying to each member. Size of group is key factor 3. False Facts • Truth is complete defense • P must prove falsity • Opinions are not actionable: facts can be proven false Causation • Same as for negligence: cause in fact and proximate cause Damages and other remedies 1. libel – general damages • rationale: b/c of permanency of form, possible extent of dissemination there is greater likelihood of harm; thus general damages are presumed 2. libel per quod – innocent on its face but becomes defamatory when liked up with certain extrinsic facts • some follow general libel rule other presumes general damages only where libel would have been actionable as one of the 4 types of slander per se 3. slander – must show special damages (damages actually suffered by P and not presumed by law i.e. loss of employment, • once special damages proved may recover general damages as well (harm to reputation) 4. slander per se – actionable per se for damages Four categories of per se • crime: where D claims P has committed serious,, morally reprehensible crime or been incarcerated for such • disease: currently loathsome, communicable disease • ineptitude in trade or profession • unchasity: also includes impotency and homosexuality DEFENSES 1. Consent 2. Truth 3. Common law absolute privileges: • Legislative privilege: all federal and state legislative members are absolutely privileged to utter defamations whil one the follr of ther legislatures or in committee sessions • Judicial privilege: any participant in a judicail proceeding is absolutely privileged to utter defamations in the course of the proceeding provided there is some relevancy • Spouse 4. Common law conditional or Qualified Privileges: exists when the potential speaker needs to be encouraged to speak. Difference b/w conditional and absolute is that can be lost through bad faith or abuse • Protection of private interest: must be protectable interest(must have reasonable belief that some important interest in person or property is threatened); defamation published must bear some reasonable relevancy to the interest sought to be protected; and person must have reasonable belief that person published to was in a position to protect or assist in the lawful protection of that interest. • Protection of public interest Conditional privilege may be lost through bad faith or abuse • Publication must be no greater than to carry out the purposes for which the privilege is recognized 5. CONSTITUTIONAL PRIVILEGES: in certain instances, the interest in freedom of expression is held to outweigh the inerest in protecting reputations, and in these cases, defamations may be privileged as a matter of constitutional law. NY Times v. Sullivan • Status of P controls constitutional standard: 3 categories of P (1) public official (2) public figure (3)private person A. public officials: those persons within the heirarchy of government who have (or appear to have) substantial responsibility over government affairs have the status of public P’s in defamation actions • rationale: it is important that members of the public be able to speak freely about – and criticize-the behavior of its public officials w/o running the risk of being held liable for every false defamatory statement (NY Times v. Sullivan) • does not encompass all public employees • police: b/c of high visibility and considerable authority to act with force, most courts have held even low ranking officers public officials • Principals and teachers – courts split over this B. Public figures : a person who is not a public official may be deemed a public figure (1)P achieved such pervasive fame or notoriety that P becomes a public figure for all purposes and contexts(sports figure, movie star) (2) P voluntarily enters or is drawn into a particular public controversy and thereby becomes a public figure for that limited range of issues. • Rationale: although persons who are not in government do not have as direct a control over the lives and destinies of the public, there is much private power in this country that does exert great influence and that is not as easily scrutinized or removable by the electorial process. It is importan that the public be able to commment freely on these persons as well. Constitutional Standard for Public P: actual malice (knowledge of falsity) or reckless disregard for its truth • Rationale: the public interest in good faith debate regarding public persons outweighs the interest in protecting their reputations. But no public interest in served by a publication made with “knowing or reckless falsity” and hence there is no constitutional protection in such case. • Knowing or reckless falsity: P must show that the D was subjectively aware that the statement was false or was subjectively reckless as to its truth when making the statement • Proving knowing or reckless falsity: P must prove actual malice with convincing clarity – mere preponderance is not enough 6. Private P • Constitutional limitation: to protect freedom of speech and press (1st amendment) liablility without fault cannot be imposed where a matter of public concern is involved. • Public concern: presumptively everything that is published in media is of public concern INVASION OF PRIVACY Intrusions into P’s private life or affairs 1. PFC • highly offensive intrusion by D into P’s private life • intent or negligence • causation 3. protected area of seclusion: must be area of life which P can reasonably expect will not be intruded upon by one in D’s position 4. Types of intrusions: any behavior that intrudes on the plaintiff’s solitude may be actionable 5. Must be highly offensive: on reasonable person standard 6. Intent: it is sufficient if the D intended the intrusion into the P’s affairs although she did not intend it to offend the P. 7. No publication is necessary Defenses: • Consent: conduct must not exceed the scope of consent Public disclosure of private facts – one who gives publicity to a matter concerning the private life of another is subject to liability to the other for invasion of his privacy if the matter publicized is of a kind that (a) would be highly offensive to reasonable person and (b) is not of legitimate concern to the public 1. PFC • Highly offensive public disclosure by D of private facts about P • No legitimate public interest • Fault in making disclosure • Causation 2. Private Facts • Things in public record are not private facts • Public occurrences: if fact occurs in public, not covered • Voluntary public figures – no right to privacy concerning reports of their public activities and appearances • Involuntary public figures – still may be privileged if news worthy 3. Must be highly offensive 4. Disclosure must involve publicity – communication to public at large or enough individuals that likely to reach general public 5. P must show that not newsworthy • Newsworthiness has broad interpretation and applicable to any matter to which there is “legitimate public interest” 6. Fault – the fault element is related to the action that gave rise to the highly offensive disclosure DEFENSES 1. TRUTH IS NOT A DEFENSE 2. CONSENT 3. CONSTITUTIONAL PRIVILEGE • Matters of public record – absolute privilege: rationale – the public interest in free reporting of such matters outweighs any interest in privacy on the part of those whose names appear in the records • Qualified privilege: if matter lawfully obtained from the gov’t, is truthful, and prohibition is not necessary to further a state interest of the highest order defendants are privileged to publish information APPROPRIATION OF PLAINTIFF’S NAME OR LIKENESS 1. PFC • Unauthorized use by D of P’s name or likeness for a commercial purpose • Causation 2. right of publicity v. right of privacy – celebrity name or likeness has commercial value so entitled to damages not so much for invasion of privacy but rather for interference with right to publicity. 3. Right of publicity • California – statute and c.l. coexist §3344 provides “any person who knowingly uses another’s name, voice, signature, photograph, or likeness, in any manner…for purposes of advertising or selling, …w/o such person’s prior consent…shall be liable for any damages sustained by the person or persons injured as a result thereof” (personality or persona) * don’t have to be alive * look a like, sound-a-like if could cause confusion between real person and impersonator • New York – must be alive, no c.l., statute only DEFENSES 1. Newsworthiness – where P is public figure or is a currently newsworthy figure, publication of name or likeness is not actionable as long as use is not for the purposes of trade or advertising. • No constitutional privilege allowing media to film or broadcast an entire commercial entertainment or performance w/o consent of the participant. May be of public interest but this does not give the media privilege to impair the performer’s right of publicity • Newsworthiness privilege to promotional materials depicting noncurrent events: use of photo with promotion can not be from former newsworthy event w/o permission Damages • For celebrity P, damages for appropriations include reasonable value of the use of name or likeness. • For private P, emotional harm is likely to be the main element FALSE LIGHT 1. PFC • Publication by D that place P in false light (knowing or reckless falsity if “newsworthy” matter) • Causation 2. Publication: dissemination to a reasonable number of 3rd persons is required 3. Falsity required: the false light in which the P is placed must be highly offensive to a reasonable person 4. Fault: 1st amendment protects media (and other) defendants from liability from some false light publication • Newsworthy matters: newsworthy statements by the media that put P in a false light are not actionable unless the “knowing or reckless falsity” standard is met. 5. Causation 6. Damages: recover for damage to reputation, for any emotional distress suffered, and for pecuniary damages MISREPRESENTATION Fraudulent Misrepresentation/Deceit PFC 1. misrepresentation by D 2. D had knowledge or reason to know falsity 3. Intent to induce P’s reliance 4. Causation – actual reliance 5. Justifiable reliance 6. Damages • Puffing is not actionable • Misrepresentation must be material • Fraudulent concealment of facts can be sufficient misrepresentation except where: bill of sale marked “as is” and P has knowledge or notice of the facts concealed • D does not have duty to disclose(distinguished from active concealment) except for: • Fiduciary relationship • Half-truths – must clarify • New information – when finds out contradicts something said earlier • Reliance – when made false statement and knows D is relying on it ECONOMIC HARMS Inducement to Breach PFC 1. Party inducing must have knowledge of K 2. Action (inducement) must be malicious (benefiting D a expense of P or injury to P) 3. Causation 4. Special damages 2 Types of Knowledge 1. constructive knowledge – available thru public notice 2. actual knowledge – service K’s, etc. Exceptions to general rule 1. underlying K is void or against public policy 2. attorney may tell party that K not good for them “Yellow Dog” rule – K clause that does not allow employees to be part of labor union – changed by statute which prohibited the enforcement of “yellow-dog” K Defenses 1. privilege: D will not be liable if there was proper justification for the interference and only reasonable methods were employed. This requires proof that both the ends and the means were justifiable. • Ends: privilege may arise from acts undertaken for a social good or to protect the D’s own interests….mixed motive does not defeat privilege if predominant motive was legitimate safety concern D can protect existing economic interest but not prospective advantage • Means: even if interference is justified, the D is never privileged to use unethical or wrongful means. INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE 1. PFC No existing contract Intent to disrupt potential K Causation Special damages 2. Legitimate means to win business o.k. 3. Unlawful or tortious means create liability UNFAIR COMPETITION • Parent of anti-trust, trademark, false advertisement PFC Inference with trade Done w/o just cause or excuse Personal intention to harm Causation Special damages Violations • Predatory pricing (selling below cost) • Group boycott – encouraging group not to do business with competition • Group as consortium attempting to monopolize • Price discrimination Checklist for issues: Products liability Manufacturing defect Design defect Duty to warn Workers’ compensation Arising out of in course of employment Defamation Private citizen/private concern – s/l w/o fault Private citizen/public concern – negligence & actual malice for punitive Public figure/private concern – actual malice Public figure/public concern -actual malice Intrusion of privacy Appropriation of name or likeness Public disclosure of private facts Intrusion of seclusion False light Misrepresentation Intentional Negligent Unfair competition Predatory pricing Group boycott Group as consortium attempting to monopolize Interference with contract Negligent interference w/prospective economic advantage