Torts, Cyber Torts and Product Liability SHU PDF

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Torts and Cyber Torts The Legal Environment of Business

The Basis of Tort Law

∗ What is tort law? Tort law provides remedies for the “invasion of various protected interests.” ∗ Personal safety, protection of property, and intangible interests, such as personal privacy, family relations, reputation and dignity.

Damages ∗ Two types : 1. Compensatory 2. Punitive

Damages

∗ Compensatory damages: compensate or reimburse a plaintiff for actual losses ∗ Make plaintiff whole and put him or her back in the same position had to tort not occurred ∗ Special damages: compensate for monetary damages ∗ Medical expenses, lost wages and benefits (now and in the future), extra costs, the loss of irreplaceable items, and the costs of repairing or replacing damaged property.

Damages

∗ General damages: compensate people, not companies, for things like pain and suffering. ∗ A jury might award general damages for physical and emotional pain and suffering, loss of companionship, loss of consortium (losing the emotional and physical benefits of a spousal relationship), disfigurement, loss of reputation, or loss of impairment of mental or physical capacity.

Damages

∗ Punitive damages: punish the wrongdoer and deter others from similar wrongdoing. ∗ Given when the wrongdoer’s behavior is so bad that it warrants harsh punishment. ∗ Used in intentional tort cases, but can be available in other tort actions.

Intentional Torts Against Persons

∗ Requires intent of the tortfeasor (the one committing the tort). ∗ Must intend to commit an unlawful act. ∗ Evil or harmful motive is not required.

Intent

(1) A volition or desire that one’s action will have some consequence (specific for each tort); or, (2) The knowledge with substantial certainty that some consequence (specific for each tort) will occur. 8

Principle of Double Effect ∗ To be morally good, a human act must agree with the norm of morality on all three counts: its nature, motive, and circumstances. ∗ An act that is bad in itself cannot become good or indifferent by a good motive or good circumstances, and much less by indifferent ones. Nothing can change its intrinsically evil nature. ∗ No person is ever allowed voluntarily to will an evil act. ∗ Therefore, we must always reject the false principle, “the end justifies the means.” 9

Principle of Double Effect ∗ How responsible are we for our voluntary actions? Are we obligated to make sure that every single consequence of each of our acts will be morally good, or at least not bad? ∗ If so, then the scope of human activity becomes so limited as to make life unlivable. ∗ One who accepts a job when jobs are scarce cuts someone else out of a livelihood; a doctor who tends the sick during a plague exposes himself to the disease; a teacher who gives a competent examination knows someone will probably fail. 10

Principle of Double Effect ∗ The principle of double effect is the solution to this moral dilemma. ∗ It is based on the fact that evil must never be voluntary in itself, must never be willed as end or as means, nor may it be voluntary in cause, as a foreseen but unwanted consequence, unless it can somehow be reduced to an incidental and unavoidable by-product in the pursuance of some good act the person is rightfully seeking. ∗ Though I am never allowed to do evil, I am not always bound to prevent the existence of evil. ∗ In sum, the end does not justify the means. 11

Principle of Double Effect ∗ Elements: ∗ The act to be done must be good in itself or at least indifferent. ∗ The good intended must not be obtained by means of the evil effect. ∗ The evil effect must not be intended for itself but only permitted. ∗ There must be a proportionately grave reason for permitting the evil effect. 12

Principle of Double Effect

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Intentional Torts Against Persons

∗ The law assumes that individuals intend the normal consequences of their actions. ∗ Thus, forcefully pushing another—even if done in jest and without any evil motive—is a tort if injury results, because the object of a strong push can ordinarily be expected to result in an injury.

Assault and Battery

∗ Assault is any intentional and unexcused threat of immediate harmful or offensive contact, including words or acts that create in another person a reasonable apprehension of a harmful or offensive contact. ∗ Can be completed even if there is no actual contact with the plaintiff, as long as defendant’s conduct creates a reasonable apprehension of imminent harm in the plaintiff.

Battery

∗ Completion of the act that caused the apprehension to the plaintiff is called a battery. ∗ Battery is a harmful and offensive contact with another that is unexcused. ∗ For example, Stallone threatens to shoot Ivan with a gun, then shoots him. The pointing of the gun is the assault; the firing of the gun (if the bullet hits Ivan) is the battery.

Battery ∗ Contact can be harmful or offensive. ∗ Physical injury need not always occur. ∗ Contact can involve any part of the body or anything attached to it, for example, a hat or other item of clothing, a purse, or a chair where one is sitting. ∗ Offensive contact is determined by the reasonable person standard.

Battery

∗ Contact can be made by some force that the defendant sets in motion, such as throwing a rock or poisoning food. ∗ Defense: self defense or defense of others.

False Imprisonment

∗ False imprisonment = intentional confinement or restraint of another without justification or consent. ∗ Physical barriers, physical restraint, or threats by physical force. ∗ Businessmen and women can face a lawsuit if they detain someone for suspected shoplifting for an unreasonable period of time. ∗ Shopkeeper’s privilege: can detain someone for questioning only for a reasonable period of time.

Intentional Infliction of Emotional Distress

∗ IIED: intentional act of extreme and outrageous conduct resulting in severe emotional distress to another that results in boldly harm. ∗ To be actionable, (capable of serving as the ground for a lawsuit) act must be extreme and outrageous to the point that it exceeds the bounds of decency accepted by society.

Intentional Infliction of Emotional Distress

∗ Involves truly outrageous behavior. ∗ Acts causing indignity or annoyance alone usually are not enough ∗ But repeated annoyances (such as those experienced by someone being stalked) coupled with threats are enough. ∗ Speech about a public figure? First Amendment’s guarantee of freedom of speech limits IIED claims.

Defamation

∗ Defamation of character: wrongfully hurting a person’s good reputation. ∗ General duty not to make false, defamatory statements of fact about others. ∗ Libel: defaming someone in writing or other form and publishing it. ∗ Slander: defaming someone orally. ∗ Also — a false statement of fact made about a person’s product, business, or legal ownership rights to property.

Defamation

∗ Defamation? or freedom of speech? Is what was said was fact or opinion? ∗ Negative statement of opinion about another person is not defamation, unless the statement is false and represents something as fact. For example, “Jane cheats on taxes,” versus, “Jane is a bad person.” ∗ False statement must be published, or communicated to others.

Defamation

∗ If Fred writes Alan falsely accusing him of embezzling money, that is not defamation (libel) because it is written to him. Even if Fred says it to him, it’s nothing. ∗ But if a third party overhears it, it is defamation. ∗ Defamatory statements made over the Internet = actionable. ∗ Damages for libel: general damages for disgrace and humiliation. ∗ Damages for slander: special damages requiring the plaintiff to show actual economic or monetary losses.

Defamation

∗ Slander per se no proof of special damages is required. ∗ Most states, the following four types of utterances are considered slander per se: ∗ A loathsome disease ∗ Done something inappropriate while engaging in a profession or trade ∗ Committed or has been imprisoned for a serious crime ∗ Imputing un-chastity towards a woman

Defenses to Defamation

∗ The truth. ∗ Privileged speech: person is a public figure, unless actual malice (statement is made with knowing falsity or recklessness). ∗ Absolute or qualified: ∗ Absolute privilege: judicial proceedings ∗ Qualified privilege: employers statements regarding employee evaluations.

Invasion of Privacy

∗ Four acts qualify as invasion of privacy: ∗ Appropriation of identity: taking someone’s name or likeness for commercial purposes without permission. Right to privacy includes the right to your identity. ∗ Intrusion upon seclusion: invading someone’s home, computer or bank account without authority

Invasion of Privacy

∗ False light: publication of information that places a person in a false light. ∗ Public disclosure of private facts: publicly discloses private facts about an individual that an ordinary person would find objectionable or embarrassing.

Right of Publicity as a Property Right

∗ In many states, appropriation is known as the right of publicity. Rather than protecting a person’s right to be left alone, this right aims to protect an individual’s financial interest in the commercial exploitation of his or her identity. ∗ It allows public figures, celebrities, and entertainers to sue anyone who uses their images for commercial benefit without their permission.

Fraudulent Misrepresentation

∗ Misrepresentation: making a false statement in order to lead someone to believe in something that is different from something that actually exists. ∗ Made accidentally, because persons who make them are unaware of the existing facts. ∗ Need intent to deceive.

Elements

∗ Misrepresentation of material fact knowing that the facts are false or reckless disregard for the truth. ∗ Intent to induce someone to rely on the misrepresentation. ∗ Justifiable reliance on the misrepresentation by the deceived party. ∗ Causal connection between the misrepresentation and the injury suffered. ∗ Damages.

Fraudulent Misrepresentation

∗ Mere puffery is not fraud. For example, it is fraud to claim that the roof of a building doesn’t leak when one knows that it does. The facts are objectively ascertainable. ∗ But whereas seller’s talk, such as “I am the best accountant in town,” isn’t fraud because the person is being subjective. ∗ Occurs only when there is reliance on a statement of fact.

Business Torts

∗ Business torts apply only to wrongful interferences with the business rights of others. ∗ Two categories: ∗ Interference with a contractual relationship ∗ Interference with a business relationship

Wrongful Interference with a Contractual Relationship ∗ Three elements: ∗ A valid, enforceable contract must exist between two parties. ∗ A third party must know that the contract exists. ∗ The third party must intentionally induce a party to the contract to breach the contract. ∗ For example, an opera singer contracted to sing at a place for several years. Someone who knew of the contract, enticed her to refuse to carry out the agreement, and began to sing for him. That was a tort because it interfered with the relationship between the singer and the original place.

Wrongful Interference with a Business Relationship

∗ Businessmen and women devise schemes to attract customers. ∗ But they cannot unreasonably interfere with another’s business in an attempt to gain better share of the market. ∗ Difference between competitive practices and predatory behavior (actions undertaken with the intention of unlawfully driving competition out of the market).

Wrongful Interference with a Business Relationship ∗ For example, say that there were two shoe stores at the mall: Joe’s Shoes and Bruno Magli. Joe’s cannot place someone at the entrance of Bruno Magli diverting customers to themselves by claiming that they have better prices. ∗ Doing this would be a wrongful interference with a business relationship because it would interfere with a prospective economic advantage. ∗ If this were permitted, then Joe’s would be taking advantage by reaping the benefits from Bruno Magli’s advertising.

Defenses

∗ No liability for the tort of wrongful interference with a contractual or business relationship as long as the interference was justified or permissible. ∗ For example, Rosario’s Meat Market advertises so effectively that it induces Sam’s Restaurant to break a contract with Costco to supply its meat. This is not wrongful interference because public policy favors free competition through advertising over any instability that such competitive activity might cause in contractual relations.

Intentional Torts against Property

∗ Trespass to land, chattels (personal property), conversion, and disparagement of property. ∗ Real property = land and things permanently attached to the land. ∗ Personal property = all other items, basically moveable.

Trespass to Land

∗ Person, without permission, enters onto, above, or below the surface of land that is owned by another, or causes anything to enter onto the land. ∗ Common types: walking or driving over someone’s land, shooting a gun over another’s land, throwing rocks at or spraying water on a building that belongs to someone else, building a dam across a river, thereby causing water to back up on someone else’s land, and constructing one’s building so that it extends onto someone else’s property.

Trespass Criteria, Rights and Duties

∗ Posted trespass signs establish as a trespasser anyone who ignores these signs. ∗ Even without signs, someone who is there to commit a crime is an implied trespasser. ∗ Trespasser = liable for any damage done to the property. ∗ “Attractive nuisance” doctrine: may be liable for injuries sustained by young children on the property if they were attracted to it, like a swimming pool.

Defenses Against Trespass to Land

∗ Trespass to land = wrongful interference with another person’s real property rights. ∗ Sometimes entering onto another person’s property is warranted, therefore not a trespass. For example: ∗ Someone in danger and needs to cross your property. ∗ Someone invited (licensee) and allowed to enter for the landowner’s benefit, like a meter reader. ∗ Purchasing tickets to a sporting event permits you to enter ∗ Any license is revocable, however, at the will of the owner.

Trespass to Personal Property

∗ Wrongfully takes or harms the personal property of someone else, (also called, trespass to chattels). ∗ Harm means not only destruction of property, but also anything that diminishes its value, condition, or quality. ∗ Trespass to personal property = intentional meddling with someone’s personal interest in the property.

Conversion

∗ Conversion = someone takes personal property of another and permanently deprives them of it. ∗ Can recover the full value of the property.

Disparagement of Property

∗ Disparagement of property = falsehoods made about another’s product or property, rather than another’s reputation (as in the tort of defamation). ∗ Slander of quality (trade libel) = publication of false information about another’s product, alleging that it is not what its seller claims.

Slander of Quality

∗ Trade libel = business owner has to show the improper publication caused a third party to stop dealing with them and the business owner lost money. ∗ Improper publication: can be both slander of quality and defamation of character.

Negligence

∗ Most common types of lawsuits. ∗ Occurs when someone suffers injury because of another’s failure to live up to a required duty of care.

Negligence

∗ Risk must be foreseeable. ∗ Elements: ∗ Duty: defendant owed a duty to care to plaintiff ∗ Breach: breached that duty ∗ Causation: breach caused the plaintiff’s injury ∗ Damages: plaintiff suffered a legally recognizable injury

Duty of Care and Breach

∗ Basic principle = people are free to act as they please so long as their actions do not infringe on anyone else’s actions. ∗ Negligent act: action or failure (omission) to act.

The Reasonable Person Standard

∗ ∗ ∗ ∗

Courts will look to the reasonable person standard. More objective. How society views a person should act. If the reasonable person existed, he would be careful, conscientious, even tempered, and honest.

Duty of Landowners

∗ Landowners = reasonable care to protect individuals coming onto their property. ∗ Landlords must exercise reasonable care to ensure tenants or guests are not harmed in common areas, such as stairways, entryways and laundry rooms.

Duty to Warn Business Invitees of Risks

∗ Retailers and other firms: duty to exercise reasonable care to protect these business invitees (customers). ∗ Business owners: negligent for failing to exercise reasonable care against foreseeable risks.

Obvious Risks Provide an Exception

∗ Some risks are so obvious that an owner need not warn of them. ∗ For example, a business owner does not need to warn customers to open a door before walking through it.

Obvious

Exception

The Duty of Professionals

∗ Professionals are held to a higher standard than the reasonable person standard. ∗ Professionals = superior knowledge.

No Duty to Rescue

∗ No negligence for failing to come to the aid of a stranger in peril. ∗ For example, you see a person about to step in moving traffic obviously unaware of a bus coming their way. No duty to warn. ∗ Same is for someone who is an expert in certain things. ∗ Have a special relationship with that person? Duty to rescue!

Causation

∗ If a person breaches a duty of care and someone suffers injury as a result of that, the person’s act must have caused the harm for it to be negligence. ∗ If the injury would not have occurred without the defendant’s act, then there is causation-in-fact.

Causation

∗ Causation in fact = determined by using the butfor test: “but-for” the wrongful act, the injury would not have occurred. ∗ Actual cause-and-effect relationship between the act and the injury suffered. ∗ In theory, causation-in-fact is limitless. ∗ Law establishes limits through proximate cause.

Proximate Cause

∗ Proximate cause, or legal cause = the connection between an act and an injury strong enough to justify imposing liability. ∗ Asks whether injuries sustained were either “foreseeable,” or rather, too remotely connected to the incident to trigger liability.

Palsgraf v. Long Island Railroad Co.

Palsgraf v. Long Island Railroad Co.

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Palsgraf v. Long Island Railroad Co.

∗ Facts: Mrs. Palsgraf was standing on a Long Island Railroad train platform when two men came running to catch a train. The second man was carrying a small package containing fireworks. ∗ A guard attempted to help him aboard the train. The man dropped the package on the tracks and it exploded. ∗ The shock of the explosion caused a scale at the other end of the platform many feet away to fall, striking and injuring her. ∗ Palsgraf brought a personal injury lawsuit against Long Island Railroad and won. The railroad company appealed.

Palsgraf v. Long Island Railroad Co.

Palsgraf v. Long Island Railroad Co. ∗ Issues ∗ How is the duty of due ca...