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ASHBASH TORTS II OUTLINE

BROWNE BARBOUR SPRING 2016

VICARIOUS LIABILITY

GENERAL
 Definition:
o A theory of recovery that will allow you to have someone else pay
o Refers to any number of different situations in which the tort liability incurred by one party is
imputed to another party
 Not a cause of action itself
 Refers to a special relationship between the defendant and the tortfeasor

 Indirect Tort Liability:


o Vicarious liability is indirect tort liability, meaning that the “responsible” tortfeasor really has not
done (or failed to do) anything for which the law of torts imposes any legal responsibility
o The P in every vicarious liability situation must first allege and prove a tortious act by the active
tortfeasor (i.e. direct liability), and then allege and prove the existence of some special
relationship or other legal basis for imputing that liability vicariously to the responsible tortfeasor
(i.e. indirect liability)
 Example:
 Employee of an auto repair shop negligently puts a tire on car. Employer can be held
vicariously liable for the negligence of the employee

 Justification:
o Sole justification for imposing vicarious liability is typically the existence of some type of “special
relationship” between the “active” and the “responsible” tortfeasors.
 Policy for Vicarious Liability:
1. Provide financial responsible defendant against who the plaintiff’s damages could be appropriately
assessed and ultimately recovers
2. Companies are involved in systematic and continuous activity, where risks are more typical and
characteristic of the activity
3. The special relationship between the active tortfeasor and the responsible tortfeasor

 Types of Special Relationships:


o Respondeat Superior
 Employee-employer
 One of the most important
o Independent Contractor
 Someone being hired to do the job
o Joint Venture/Joint Enterprise
 Business venture with a pecuniary interest
o Bailment
 Mom and Dad
 Parent-Child
o Master-servant
o Spousal
 Holding a spouse liable depends on the jurisdiction
o Principal agent
 No contract or employment relationship, just have to be doing something on behalf of
another. Do not need a written or oral agreement.
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 Apparent authority I enough to give rise to that relationship

RESPONDEAT SUPERIOR
 Respondeat Superior means “let the master respond” or “look to the person higher up”

 General Rule:
o Employers are held vicariously liable for the tortious acts committed by their employees if the
tortious act occurs within the scope of the employment relationship
 Employers can be held liable even if they didn’t command the action and if they could not
foresee the act occurring
 Does not matter how detailed or specific the orders were
o I.e., an employer CANNOT insulate themselves from liability by having a well
established policy manual

 Reasons to Hold Employer Liable:


o The employer should bear the risk of loss within certain limits for the employee’s harmful conduct
in the course of his work are that the employer:
 Has control over the business, including the work of employees; and
 Stands to profit from the employee’s services
o Policy Reasons:
1. Financially responsible
2. Control over the employees
3. Employers benefit from the employee’s actions (so they bear the risk)
4. Provides incentives for employers to take safety precautions

 Indemnity and Contribution


o Indemnity:
 Allowed for the employer to recover from the employee (full amount and the burden shifts
to the employee)
 Not normally sought
 The master, employer, principal can seek indemnity from the servant, agent, or employee.
 Indemnity award will only be collectable if the servant, agent, or employee has
assets or liability insurance of his own
o Contribution:
 Allowed IF the employer is held liable then they can receive partial amount from the
employee to pay his proportional share

 Scope of Employment:
o An employer may be held liable for the acts of his employee if the employee was acting within the
scope of employment
 “Acts necessary to the comfort, convenience, health, and welfare of the employee while at
work.”
o Factors:
1. General character of the employment
2. The nature of the employee’s tortious act
3. The purpose of the employee’s act; and
4. The time and place of the injury
o Example:
 Using personal car for business does NOT take someone out of the scope of employment

 The Going and Coming Rule:

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o The general rule is that an employee is outside the scope of his employment while engaged in his
ordinary commute to and from his place of work
 An employee who is en route or going home from work is OUTSIDE the scope of
employment
o Based on several theories:
 The employment relationship is suspended from the time the employee leaves his job until
he returns
 During the commute, the employee is not rendering services to his employer
o Commuting should not be confused with work-related travel

o EXCEPTIONS:
1. When an employee endangers others with a risk arising from or related to work
2. Where the employee is rendering a “special service/errand” to which the employer
consented
3. Where the employee is rendering an “incidental benefit” to the employer that is not
otherwise common to the ordinary commute
4. Where the employee is subjected to a “special hazard” not common to the ordinary
commute

o Foreseeability Test
 One-way to determine whether a risk is inherent in, or created by, an enterprise is to ask
whether the actual occurrence was a generally foreseeable consequence of the activity.
 In the context of the particular enterprise an employee’s conduct is not so unusual or
startling that it would seem unfair to include the loss resulting from it among other costs of
the employer’s business.
 Example:
 The test has been applied to employees who got into car accidents on the way home
after drinking alcohol at work

 Slight Deviation Rule


o The time when an employee temporarily leaves that employment to engage in some errand of
purely personal nature

o Frolic v. Detour
 Frolic:
 The pursuit of the employee’s personal business as a substantial deviation from or
an abandonment of the employment
o Departure from the employee’s scope of employment that is completely
unrelated to the employment and is of a purely personal nature for which
the employer will not be vicariously liable
 Outside the scope of employment
 Exceptions:
o Acts that are necessary to the comfort, convenience, health and welfare of
the employee while at work

 Detour:
 Deviation that is sufficiently related to the employment to fall within the scope of
employment
o Minor deviation from the employee’s regular employment duties that still
sufficiently relates to the employer’s business to justify imputing vicarious
liability to the employer for injuries inflicted upon the plaintiff by the
employee
 Incident to Employment:

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1. Smoking
2. Drinking
3. Using the toilet
4. Getting coffee

o Factors to determine slight or substantial deviation:


1. Employee’s intent
2. The nature, time, and place of the deviation
3. The time consumed in the deviation
4. The work for which the employee was hired
5. The incidental acts reasonably expected by the employer
6. The freedom allowed the employee in performing his job responsibilities

 Vicarious Liability for Intentional Torts (Dual Purpose Test)


o Respondeat superior is not limited to negligent torts
o Employer may be held liable for the intentional torts of his employee when they are reasonably
connected with the employment and within its scope.
o If an employee asserts an intentional tort, then it is presumed outside the scope of employment
 Exceptions:
 If the actual responsibilities of the employee are such that it would be foreseeable
for the employer that an intentional tort might occur
o At least part of the employees action MUST be in furtherance of the business
 I.e., bouncers, police officers, bill collectors

o Dual Purpose Test:


 Justifies imputing vicarious liability to the employer
 Liability even for an employee’s intentionally tortious acts can still be imputed vicariously
to employer if at least part of the employee’s actions were intended to further the
employer’s business

 Punitive Damages
o The principal is liable for punitive damages only if the principal authorized or ratified, was reckless
in employing or retaining the agent, or the agent was employed in a managerial capacity and was
acting in the scope of employment.
 Punitive damages are only imposed against tortfeasors who engage in certain types of
aggravated misbehavior that is either intentional or otherwise in wanton disregard for the
plaintiff’s safety.
o Majority Rule:
 Against punitive damages in vicarious liability actions
o Minority Rule:
 For punitive damages
 Policy: where the employer has become directly involved in authorizing or
subsequently ratifying types of aggravated misconduct
o Some will allow if you are in a managerial role

INDEPENDENT CONTRACTORS
 General Rule:
o One who arranges for work to be done by an independent contractor IS NOT vicariously liable for
the contractor’s torts
 Those who enter into a contract to have work performed are not vicariously responsible for
the tortious acts of independent contractors

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 Any person who hires an independent contractor cannot be held liable for injuries inflicted
by the tortious actions of an independent contractor

 Who is an Independent Contractor?


o An independent contractor may be defined generally as someone who performs work for hire for
the defendant but who is not considered to be an employee
 Usually persons who are perceived to be operating their own business and hence not
subjected to the employers right of control over the manner, means, or details of the work

 Test:
o Decisive test for determining whether a person is an employee or an independent contractor is the
right to control the physical details of the work
o Right to Control Factors:
 Determines if the person is an independent contractor
1. Extent of control
2. Distinct occupation or business
3. Kind of occupation
4. Skill requirement
5. Supplier of tools, supplies, place of work
6. Length of time of employment
7. Payment by time or job

 EXCEPTIONS:
1. Nondelegable duties
 Certain responsibilities that courts will not permit to be delegated to an independent
contractor
 Responsibilities owned by an employer are deemed so important to the community that the
employer should not be permitted to transfer these duties
 The duty can be delegated to another but the responsibility remains with the owner
 Operates, not as a substitute for liability based on negligence, but to assure that
when a negligently caused harm occurs, the injured party will be compensated by
the person whose activity caused the harm and who may therefore properly be held
liable for the negligence of his agent, whether his agent was an employee or an
independent contractor

2. Apparent Authority
 One who expressly or impliedly represents that another party is his servant or agent may
be held vicariously liable for the latter’s negligent acts to the extent of that representation.
 Allows an injured party who reasonably relies on the representation to hold the
party who made the misrepresentation liable.

3. Inherently Dangerous Activities/Intrinsically Dangerous Work


 By the NATURE, the work presents a special danger that simply cannot be eliminated even
by the exercise of the greatest degree of care
 I.e., blasting with explosives or spraying poisons
o Courts have refused to apply the independent contractor rule to injuries
inflicted upon plaintiff’s during the performance of certain types of
intrinsically dangerous work activities, such as blasting or spraying poisons
 Negligence Collateral to Risk:
 The exception for inherently dangerous activities does not apply when the
independent contractor’s negligence is deemed collateral to the inherent risk of the
activity
 It is not recognizable in advance as particularly likely to occur or as calling for
special precaution
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4. Peculiar Risk of Harm
 One that involves some degree of special danger that is uniquely different from the
ordinary foreseeable risks associated with the particular work activity in question
 Peculiar risks related to a particular work activity involve those which are not
routine and which ordinarily are unforeseeable
 Of harm that is different from the ordinary risks associated with the activity in
question
 Must be different in kind from the ordinary risk
o I.e., Gun range
 Employer may be vicariously liable for injuries to plaintiff’s that arise from work that
involves a peculiar risk of such harm

5. Illegal Activities
 One who contracts for performance of an illegal act is vicariously liable for any damage
even if the agent is an independent contractor

6. Negligence in the Selection of the Contractor


 If a company is negligent in selecting the contractor or in giving improper directions or
equipment or in failing to stop any unreasonably dangerous practices that come to its
attention, the company will be held liable for its own negligence, which has combined with
that of the contractor

7. Work will Create a Nuisance


8. Employer is Charged by Law with the Duty Breach
9. Done in a Public Place

JOINT ENTERPRISE/VENTURE
 Generally:
o Where the defendant has agreed in advance of the tortious activity to participate with the other
person in a specific activity which subsequently produces an injury to the plaintiff

 4 Elements of a Joint Enterprise:


1. An agreement, express or implied, among the members of the group;
2. A common purpose to be carried out by the group;
3. Community of pecuniary interest in that purpose, among the members;
4. An equal right to a voice in the direction of the enterprise, which gives an equal right of control

 Joint Enterprise Theory:


o Imposes liability vicariously upon one person who is engaged in the same activity with another
person committing the tortious act
 Most commonly applied in automobile accident cases
o Joint ownership without more usually is not enough to impose vicarious liability; there must be
some business purpose involved
 HAVE TO SHOW there is some profit motive
 If you can’t, you lose

BAILMENTS
 Generally:
o Under the CL in most states, a bailment does not make a bailor vicariously liable for the acts of the
bailee in the use of the chattel
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 CL rule has been altered in many states by decision or by statute, especially with respect to
automobiles
o EXCEPTIONS:
1. Family car doctrine
2. Graves Amendment
 Preempts state law and provides that there is no vicarious liability for injury or
damage arising out of the use of a vehicle rented or leased by someone in the
business of renting or leasing motor vehicles
3. Omnibus Clause
 Extends the coverage of the policy to any person using or responsible for the use of
insured vehicle, providing the actual use is with the permission of the named
insured

 Family Purpose/Car Doctrine:


o The owner of an automobile is held vicariously liable when the car is negligently driven by a
member of the immediate household
 The owner is not liable for his own negligence; he is vicariously liable for the tortious acts of
the driver
o To be liable:
 The head of the household need not own the vehicle, but must furnish it for the use,
pleasure, and business of himself or a member of the family
 Car must be driven with the permission of the owner
o Courts have held the parents of teenage drivers liable even when the teenager was exceeding the
scope of permission
o In general, it is limited to automobiles but courts have extended it
 Was extended to include a family motorboat

 Negligent Entrustment:
o DISTINGUISH FROM VICARIOUS LIABILITY
o Cases in which the plaintiff is arguing that the employer/owner/bailor was itself negligent in some
way.
 The owner/bailor may be liable in entrusting the chattel to the bailee
o Example:
 Owner knew the driver was frequently intoxicated
 Father funded the purchase of a car for his son whom he knew to be an irresponsible driver
 Shotgun given to a young child

 Automobile Consent Statutes


o Makes the owner of a car vicariously liable for injury caused by the negligent operation of the
vehicle as long as it is being used with the owner’s consent
 Problems that arise under these statutes:
1. What constitutes consent
2. What happens when the scope of the consent is exceeded
3. Whether “owner” includes conditional sellers who have legal title but no power to
control the vehicle

IMPUTED CONTRIBUTORY NEGLIGENCE


 Second Restatement of Torts
o A driver’s negligence will not be imputed to a passenger, UNLESS the relationship between them
is such that the passenger would be vicariously liable as a defendant for the driver’s negligent acts
 Only a master-servant relationship or a finding of joint enterprise will justify the imputation
of contributory negligence

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 Both Ways Test
o “If negligence can be imputed, contributory negligence will be also”
 The negligence of another person is imputed to P whenever the negligence of the other
person would have been imputed had the P been a D
 Most courts have rejected this test
o Test has been under a slow but steady attack
o Many automobile consent statutes have been construed ONLY to impose
vicarious liability and not vicarious contributory liable

 Smalich v. Westfall:
o RULE:
 A third party’s contributory negligence is NOT imputed to a plaintiff, UNLESS the plaintiff
would be vicariously liable for the negligent acts of the third person
o A car driven by Westfall but owned by Smalich ran into Stephanna Blank’s car. Smalich was a
passenger in her car and died as a result of the accident. Smalich’s estate brought a wrongful death
suit against Blank and Westfall.
 Court held:
 A third party’s contributory negligence does not bar a plaintiff’s recovery unless the
plaintiff would be vicariously liable for the negligent acts of a third person.
 Thus, a driver’s negligence will not be imputed to a passenger unless the passenger
would be vicariously liable for the driver’s negligent acts. Court limits such
occasions to when the driver and passenger are engaged in a joint enterprise or
when the driver is the servant of the passenger.
 Smalich and Westfall cannot be characterized as either one of these relationships.
Therefore, Westfall’s contributory negligence is NOT imputed to Smalich and
Smalich’s estate is entitled to recover from Blank.

 Imputed Contributory Negligence has been largely rejected in the following areas:
1. Driver and Passenger
 A passenger in a car can be charged with contributory negligence of his own if he, for
example, grabbed the wheel, distracted the driver by untying the strings of her bikini top, or
gave directions to turn the wrong way down a one-way street
2. Husband and Wife
 The contributory negligence of one spouse is no longer imputed to bar recovery by the
other on the basis of the marital relation alone
3. Parent and Child
 CL had no similar rule of legal identity as between parent and child
 Child always has been held to be entitled to the separate ownership of his own property, to
the enforcement of his causes of action, and to be liable as an individual for his own torts

 Imputed Contributory Negligence REMAINS viable in a few areas: Restatement (Third) § 5


1. Employer and Employee
 The contributory negligence of the employee will be imputed to the plaintiff employer
 There was an accident between a delivery truck and a motorcycle. Company that
owned the truck and employed the truck driver sued the motorcyclist to recover for
the damages to the truck and the worker compensation benefits paid to its driver.
Jury found both the truck driver and motorcyclist negligent and assigned
percentages of fault.
 Percentage o fault of the truck driver WAS imputed to his employer.
2. Derivative Claims
 When a claim is held to be derivative in nature (loss of consortium or wrongful death) the
contributory negligence of an injured party usually will be imputed to the plaintiff because
plaintiff’s claim derived from that of the injured party

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 If the spouse of the motorcyclist brought a loss of consortium claim, motorcyclists
contributory negligence would be imputed to spouse and would either defeat the
claim or reduce the damages
 Similarly, the contributory negligence of a decedent not only affects his estate’s ability to
recover in a survival action, it is imputed to the beneficiaries in a wrongful death action
and will affect their recovery as well

 Example of Imputed Contributory Negligence:


o Igor is Dr. Frankenstein’s chauffer. Igor drives Franken to his lab one day, then the limo collides
with a car driven by Mary. Franken is injured. His accident was due to both Igor AND Mary’s
negligence. Franken sues Mary. Mary can raise the defense of contributory negligence; not
Franken’s personally, but Igors.
 What happens?
 Igor’s negligence will be imputed to Franken on the basis of the principle-agent
relationship between them

STRICT LIABILITY

GENERAL
 Strict Liability
o D must pay damages although they did not act intentionally or with unreasonable care
o Not looking to establish intent in strict liability
 Can be held liable even if there is no intent
 Can be held liable even if there is no negligence
o HAS to involve either animals or an abnormally dangerous activity

o ELEMENTS:
 The nature of D’s activity imposes an absolute duty to make safe;
 The dangerous aspect of the activity is the actual and proximate cause of P’s injury; and
 P suffered damage to person or property

ANIMALS
 Generally:
o Imposed on those who keep, possess, or harbor the animal – not just the owner
o BUT FOR:
 Innocent, negligent or reckless conduct of a third party OR
 Action of another animal OR
 Operation of a force of nature (aka act of God)
o ONLY strictly liable when the damage results from the type of risk that made the animal
dangerous in the first place

 3 Basic Categories:
1. Pets and domesticated animals
2. Wild animals
3. Livestock and other farm animals

 Domesticated Animals:
o Definition:
 Animals who are “by custom devoted to the service of mankind at the time and in the place
in which they are kept”
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o Common law rule:
 Domestic animal is entitled to one bite
 Not necessarily true
o If the owner knows, or has reason to know, that the animal has vicious propensities, it is sufficient
to classify the animal with wild ones and impose strict liability

o “Species-Specific”
 General rule is that you cannot just rely on the specific breed of the dog to establish it is
dangerous
 Need other evidence
o Vicious = “dangerous propensity abnormal to its class”

o Burden of Proof:
 P has to prove that the owner knew or SHOULD have known of the domestic animal’s
dangerous propensities
 If P cannot prove that, P must prove negligence to recover

o Leash Laws
 If a person is injured due to the failure of the owner to comply with a leash/muzzle
ordinance, negligence per se may apply
 If the muzzling of the dog would not have prevented the injury, where the dog
knocks the person down instead of biting them, P must prove negligence based on
conduct

 Wild Animals:
o Definition:
 Wild animals are animals that are not “by custom devoted to the service of mankind at the
time and in the place in which they are kept”
 Includes animals that belong “to a category which has not been generally
domesticated, and which is likely, unless restrained to cause physical injury”

o Landowners are NOT responsible for harm done by wild animals on their property UNLESS they
reduce the wild animal to possession or control or introduce a non-indigenous animal into an area
 Owner of a wild animal is not strictly liable, generally, for harm caused by the wild animal
to a willful or negligent trespasser, even if the trespasser had no reason to know that the
animal is there, UNLESS the keeper kept the animal for the purpose of attacking and
harming intruders
o Owner or possessor of a non-domesticated animal is subject to strict liability for all harm done by
the animal
o
o § 506 – Wild animals are not by custom devoted to the service of mankind at the time and in the
place in which they are kept
 Exception:
 No strict liability for trespasser when there was a warning sign of wild animals
o When displayed to the public like a circus or zoo by legislative permission it
is negligence NOT strict liability
o § 508 – Possessor of wild animal is not liable for harm done after it is out of the owner’s possession
and returned to its natural state/wild. The animal must be indigenous to the area to be considered
returned to the wild.

o Whether or not the animal is actually tame or aggressive is not the issue so much as what harm
can reasonably be expected to result from a wild animal of the kind that caused P’s harm
o Some courts apply a negligence standard rather than strict liability
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 Think public zoos
o Customs of the community determine the classification of the animal
 In Burma, elephants are domesticated animals (no strict liability)

 Trespassing Animals (Livestock):


o 4 theories:
 1. Common law strict liability
 The owner of animals of a kind likely to roam and do damage is strictly liable for
their trespass
 2. Fencing out statutes
 If P fenced his land properly there was strict liability when animals broke through
the fence
o Otherwise there was liability only if the owner of the animals was negligent
 3. Fencing in statutes
 Required the owner of the animals to fence them in or otherwise restrain them, and
made the owner strictly liable if he did not do so
 4. No liability without fault
 Requires proof of negligence

o Wild Animals – Strict Liability


 Owner is strictly liable for injuries caused by wild animals, even those kept as pets
o Owners are liable for the property damage done by barnyard animals
 Cattle, horse, sheep, hogs, goats, fowl, turkeys, chicken
o Domestic Animals – Knowledge Required
 No strict liability on owners whose domesticated animals have caused harm to another’s
property (must prove negligence)
 If owner has knowledge of that particular animal’s dangerous propensities, liability
attaches
o Cats, dogs

o Highway Exception:
 No strict liability if cattle is being driven and they escape onto adjacent property
 Cattle must be in transition
o Possessor of land is not liable when someone intentionally or negligently trespasses upon the
land for the harm done by the wild or domesticated animals he keeps on the land

 Personal Injuries
o Persons Protected
 Licensees and Invitees – Landowner Strict Liability
 Strict liability for injuries inflicted by wild animals or abnormally dangerous
domestic animals kept by the landowner on his land will usually be imposed
o Public Duty Exception
 Where landowner is under a public duty to keep the animals (public
zookeeper); in such cases negligence must be shown

 Trespasser’s Must Prove Negligence


 Strict liability is NOT imposed in favor of undiscovered trespassers against
landowners.
o Trespasser’s cannot recover for injuries inflicted by wild animals or
abnormally dangerous domestic animals in the absence of negligence
 Intentional Use of Vicious Watchdogs
 Landowner who protects property from intruders by
keeping a vicious watchdog that he knows is likely to cause
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serious bodily harm may be liable even to trespassers for
injuries
 Based on intentional tort principles

ABNORMALLY DANGEROUS ACTIVITIES


 General:
o Restatement § 519
1. One who carries on an abnormally dangerous activity is subject to liability for harm to the
person, land or chattels of another resulting from the activity, although he has exercised the
utmost care to prevent the harm
2. This strict liability is limited to the kind of harm, the possibility of which makes the activity
abnormally dangerous

 What is the activity?


o Looking specifically at the activity – what is it that you are doing that is creating this potential or
probability of harm
 Focusing on the activity
o Activity may be abnormally dangerous if it involves a substantial risk of serious harm to person
or property even when reasonable care is exercised

 TEST:
1. Activity must create a foreseeable risk of serious harm even when reasonable care is exercised;
and
2. Activity is not a matter of common usage in the community

 Policy Reasons:
1. Makes individuals responsible
 If you are going to engage in these dangerous activities, you should pay
2. The court, not the jury, decides whether an activity is subject to strict liability
 In other words, this liability is analogous to negligence per se, but it is not called negligence because
a court makes a judgment that value to the community is sufficiently great that the mere
participation in the activity is not to be stigmatized as wrongdoing in the negligence sense

 Non-Natural Use:
o Person will be held liable for non-natural use of his land that causes harm to another.
 Uses that are not for the purpose or introduce something that was not naturally on the
property
o Factors:
1. Character of the thing or activity in question
2. Place and manner in which it is maintained
3. Relation to its surrounding

o Landowner may use his land for anything in the course of ordinary enjoyment
 The person who brings onto his land anything likely to do harm if it escapes, must keep it
safe, or it is otherwise responsible for all the damage which is the natural consequence of its
escape
 Rylands v. Fletcher
o The court decided that anyone who brings onto their land something that is
likely to do mischief if it escapes, is prima facie answerable (strictly liable)
for any damage that it does if it escapes
o Natural v. Non-natural
 Non-natural uses are those uses that are for the purpose of
introducing something that was not naturally on the land
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o In Rylands, because the use was non-natural, the defendants acted at their
own peril and are liable for any damage that ensued

 Ultra-hazardous Activities
o An activity that necessarily involves a risk of serious harm to the persons, land chattels of others
which cannot be eliminated by the exercise of the utmost care and is not a manner of common
usage
 Depends on the nature and location
o Ultra-hazardous = abnormally dangerous activities
o Examples:
1. Blasting
2. Transporting toxic chemicals
3. Crop dusting
4. Testing of rockets
5. Firework displays
 In some of these cases, there is no strict liability because injuries must RELATE to
the dangerous propensities of the activity

 Activities held to be abnormally dangerous:


o Blasting
 Most jurisdictions impose strict liability for blasting if it is done in an urban or residential
area
o Transportation and storage of toxic chemicals and inflammable liquids, pile driving, crop dusting,
fumigation with toxic gases, testing of rockets, fireworks displays, operation of a plutonium
production facility, operation of hazardous waste disposal sites, operation of oil wells, and storage
of large quantities of water and other liquids
 Some of these are NOT subject to strict liability

 Factors to Consider (Restatement § 520)


1. Existence of a high degree of risk of some harm to the person, land or chattels of others;
2. Likelihood that the harm that results from it will be great;
3. Inability to eliminate the risk by the exercise of reasonable care;
4. Extent to which the activity is not a matter of common usage;
5. Inappropriateness of the activity to the place where it is carried on; and
6. Extent to which its value to the community is outweighed by its dangerous attributes

 Common Usage
o Car accidents kill and injure people and damage more property than any of the other activities
listed, yet driving is not subject to strict liability because it is NOT abnormal
 Transmission of electricity and natural gas are considered matters of common usage and
thus not subject to strict liability

 Location
o Many differences in cases is attributed to the location of the activity
 Can be inappropriate for the location

LIMITATIONS ON STRICT LIABILITY


 Defenses:
1. Unforeseeable act of God
2. Assumption of the risk
3. Plaintiff causes accident
4. Not within scope

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 Exceptions under the rule of Strict Liability:
o Risk of harm posed by the activity has to be the harm that is actually suffered
 Foster v. Preston Mill Co.
 RULE:
o Imposition of strict liability due to an ultra-hazardous activity is limited to
consequences from the activity that result from the risk that makes the
activity ultra-hazardous
 Blasting operations conducted by Preston Mill Co. frightened a mother mink owned
by Foster and caused the mink to kill her kittens.
 In Washington, there is strict liability in blasting cases whether the damage is
caused by trespassory or non-trespassory invasions
 Court held:
o Although blasting is an ultra-hazardous activity, the risk of the activity that
makes it ultra-hazardous is NOT that the vibration or noise will cause
nearby wild animals to kill their young
 It is the exceedingly nervous disposition of mink, rather than the
blasting operations, which must bear the responsibility of the loss
o What makes blasting ultra-hazardous is the risk that property or persons
may be damages or injured by coming into direct contact with flying debris
or by being directly affected by vibrations of the earth or concussions of the
air
o Act of God
 Golden v. Amory
 RULE:
o Strict liability will not be imposed where the harm results from an act of God
that the defendant had no reason to anticipate
 D owned a hydroelectric plant and constructed and operated a dike. P’s owned real
estate along river where dike was located. Hurricane caused river to overflow,
damaging the plaintiff’s real estate. D cannot be held liable for injury caused by
floodwaters
o What if D’s reservoir overflows because the owner of another reservoir
upstream suddenly releases a large quantity of water?
 Act of a third party over whom D has no control does NOT give
rise to liability even where D’s activity is subject to strict
liability
o Assumption of the Risk
 Sandy v. Bushey
 RULE:
o An individual is strictly liable for keeping an animal that he knows has
vicious tendencies unless the plaintiff voluntarily or unnecessarily puts
himself in the way of the animal
 P used D’s pasture to grain his horse where D’s horse was. P was graining his horse
away of the other horses and D’s horse came up and kicked P, seriously injuring him.
Evidence showed that D knew his horse had vicious tendencies prior to the incident.
 Court held:
o P’s contributory negligence will not bar recovery UNLESS P voluntarily or
unnecessarily puts himself in the way of the animal.
o Here, P was not near D’s horse and did not incite the horse or put himself at
risk. Since D knew of his horse’s vicious tendencies, D is strictly liable.

 Legal Sanction

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o Statutory sanction for D’s conduct frequently has been held to preclude the application of strict
liability, on the ground that D cannot be held strictly liable for doing properly what the law has
authorized him to do, although he will still be liable for any negligence
 Custodian of a public zoo may be held not subject to strict liability for harm done to the
animals kept in it
 This has been held to be true for gas/electric conduits laid in the street under legislative
authority as well as for common carriers required by law to ship wild animals or
explosives
 Protection from strict liability has also been extended to a contractor doing such work as
blasting for the state

PRODUCTS LIABILITY
OVERVIEW
 Products Liability:
o Umbrella term for the liability of a manufacturer, seller, or other supplier of chattels, to one who
suffers physical harm caused by the chattel

 3 Theories of Recovery
1. Strict Products Liability
2. Negligence
3. Breach of Warranty

 Proper Defendant:
o Anyone in the ORIGINAL CHAIN of distribution – can sue anyone in this chain
 P is not limited solely to who sold the product to them
 Ex: Original manufacturer, wholesalers, retailers
o These sellers generally have a right of indemnity from the manufacturer if
the latter were the one solely responsible for the existence of the defect
o Rule of strict liability limited to commercial sellers – those in the business of selling the product
 Not necessary that the sale of the product be the seller’s main occupation, so long as it is
part of the seller’s regular business
o Sellers of USED products cannot be held strictly liable
 EXCEPTIONS:
 There was a defect that could be reasonably discovered upon inspection, OR
 Defect was created by the used product seller
 Majority Rule:
 Imposes at most a negligence standard on sellers of used products, at least when all
they do is resell the product without change
o Owners of defective products can be held negligent but not strictly liable
 Proper Plaintiff:
o The party who suffers an injury
 Do not have to be a purchaser of the product – just a user of the product
 Liability
o Whether the liability rests upon negligence, warranty or strict liability in tort, it applies to all types
of products
 Product is not limited to those used by human beings
 Animal feed, veterinary medication that may foreseeably cause harm only to
property are within the liability
 Almost every PL suit involves a negligence count

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DEVELOPMENT OF THEORIES OF RECOVERY

 NEGLIGENCE
o Negligence is conduct that falls below the standard of care established by law for the protection of
others against unreasonable risk of harm
o General Rule:
 Imposes negligence liability upon all sellers of chattels –whether damage is to person or
property, whether the manufacturer produced the whole product or a component part,
and whether or not the injured person was the immediate purchaser

o ELEMENTS
1. Existence of a legal duty owed by D to that particular P;
2. Breach of that duty;
3. Actual and proximate cause; and
4. Damages

o Plaintiff’s like the negligence route over strict liability


 Easier to prove
 Easier to prevail by showing D did something wrong than that there is something
technically defective about the product
o P cannot recover if they failed to exercise due care in using the product OR if they used the product
in spite of awareness of the defect

o Negligence escapes the privity limitation:


 Privity rule protected the manufacturer who dealt with consumers only through dealers
and retailers, and therefore undermined important incentives for the manufacturer to
construct products carefully
 Majority Rule Now:
o No privity of contract required
 MacPherson v. Buick Motor Co.
 RULE:
o A manufacturer of articles that are not inherently dangerous but that may
become dangerous when improperly constructed owes a duty of care to
anyone beyond the purchaser who might foreseeably use the articles, when
it is reasonable to expect no further tests will be performed
 Overturned the privity rule for negligence actions involving defective products
 Court ruled:
o The lack of privity of contract would NOT bar the claim
o “If the nature of a thing is such that it is reasonably certain to place life and
limb in peril when negligently made, it is then a thing of danger”
 Key is now the foreseeability of harm to the remote user of the
product, to whom a duty is now owed by the manufacturer to use
due care in the construction of the product

o Duty:
 Duty to FORESEEABLE users
 Duty to:
 Warn of risks inherent in the use of the product
 Not to place defective products in the market
 TEST:
1. Knowledge of a probable danger – not merely possible

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2. Knowledge that in the usual course of events the danger will be shared by others
other than the buyer
3. Can be inferred from the nature of the transaction
4. Knowledge is not always sufficient
o Must test for the proximity or remoteness of the relation

o Breach:
 A breach is conduct that fails to meet the requisite standard of care
 To prove, P must show:
1. Negligent conduct by D leading to
2. The supplying of a defective product by D
 Look for breach in:
1. Manufacturing of the product
2. Inspecting or testing of the product (for a party that has a duty to do that)
3. Advertising or selling
o I.e., failing to warn about dangerous attributes
 Often times breach is hard to prove in negligence cases

o Causation:
 Actual cause + promise cause
 Actual:
o But for cause/substantial factor
 Proximate Cause:
o Foreseeability test
 Not enough to just have a defective product – have to have a connection between the
product and the injury

o Damages:
 Actual injury/physical harm
 If P suffers only economic loss (product does not work as well as expected or
requires repairs), most courts do not permit recovery under negligence

o Defenses:
 Typical negligence defenses apply here:
1. Contributory negligence
2. Comparative negligence
3. Assumption of the risk
a. Express
b. Implied

o Retailers:
 Retailers will generally have no duty to inspect a product, so typically it will be hard to get
them for negligence, UNLESS they knew or should have known
 Recall, complaints, returns, etc.
o Repairs:
 An individual who undertakes to make a repair owes a duty to use care to those who may be
foreseeably injured in case the repair is negligently made
 Liability for physical injury arising out of a failure to repair turns on whether the contractor
gave an undertaking
 When there is an assurance to an owner that a repair has been made even though nothing
has in fact been done, many modern courts have found misfeasance and thus a breach of
duty even to third parties

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 If D commences performance and then omits to complete performance, he has
committed misfeasance just as if he had performed negligently and will likely be
liable
 WARRANTY
o Overview
 Breach of Warranty
 Warranty is an expressed or implied representation about a quality or attribute
of a product. If the product does not live up to those representations, and a loss or
harm results, a breach of warranty claim arises
 Basis of liability is strict liability
 Therefore, if you have that a warranty was made then D is liable
 General Rule:
 One engaged in the business of selling a product, who, by advertisement, labeling or
otherwise, makes a representation about a material fact regarding a product they
sell, is subject to liability for the physical harm caused to a foreseeable user who
justifiably relies upon that representation, even if:
o There is no privity of contract between the seller and the consumer, and
o The misrepresentation was not made negligently or fraudulently

o Express Warranties
 General Rule:
 Manufacturer is liable under the principle that they represented something one way,
and there was no other way for the customer to know otherwise
o There was a reasonable reason to rely on what the manufacturer
represents in regards to their products
 Caveat Emptor:
 Buyer beware
 Factors:
1. If there was an expressed statement
2. The goods were NOT fit for their ordinary purpose
3. Plaintiff justifiably relied on the representation
4. Need to have a causal connection – the warranty caused the loss
o Usually shown through reliance
 Express Warranty Analysis
1. What were the representations made?
2. Were they made to the ultimate user?
3. Did the consumer understand this warranty?
4. Did the consumer rely on these warranties?
5. Were these representations false?
6. As a result of the falsity, did injury result?

 Baxter v. Ford Motor Co. MAJORITY RULE


 Rule:
o A manufacturer is liable to a consumer for breach of an express warranty,
even if there is no privity between the manufacturer and the consumer
 Facts:
o Baxter bought a car from St. John Motors that was manufactured by Ford.
Catalogs distributed by Ford contained statements that “all of the new Ford
Cars have a Triplex shatter-proof glass windshield” and that the glass was
“so made that it will not fly or shatter under the hardest impact.” A pebble
cracked Baxter’s windshield, causing pieces of glass to go into his eye and
resulting in the loss of one of his eyes
 Court held:
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o A manufacturer is liable to a consumer for breach of an express warranty,
when the manufacturer made explicitly representations about the goods,
even if the consumer bought the goods from a third party.
 Promise of Safety
 Promise of safety must be a specific one in order to constitute a warranty
 Consumer Protection Acts:
 Their violation usually is pled along with violations of express warranty claims
 Statutes first drafted to redress a grievance to the public at large and therefore
avoid some of the basic requriements of tort law, including reliance and proof or
damage
 Remedies:
o Refund of purchase price, punitive damages, and attorney’s fees
 If P seeks personal injury damages:
o Courts are split on whether it is enough for P to allege that D made a
misrepresentation pertaining to a fact about safety
 Some say P is not required to show they relied
 Some argue reliance and actual damages should be required
o Implied Warranties
 Types of Implied Warranties:
1. Implied Warranty of Merchantability
2. Implied Warranty of Fitness for Particular Purpose
 Purely economic loss is recoverable in implied warranty actions

 Implied Warranty of Merchantability


 General Rule:
o A seller warrants its goods are fit for the ordinary purpose for which the
goods are used
 Merchantability:
o The thing sold is reasonably fit for the general purpose for which it is
manufactured and sold
 Not based on representation by the seller
 Limitations:
1. Can be disclaimed
2. Must give notice

 Implied Warranty of Fitness for a Particular Purpose


 General Rule:
o If a buyer, expressly or by implication, makes known to the seller the
particular purpose for which the good is required and it appears that he has
relied on the seller’s skill or judgment, an implied warranty arises
 Limitations:
1. Can be disclaimed
2. Must give notice

 Consumer Product Safety Act


 Created a federal agency, the Consumer Product Safety Commission, that has
regulatory power over consumer products that are not already subject to safety
regulation by other federal agencies
 CPSC is empowered to establish and enforce uniform safety standards for
consumer products and to ban products from the market if they create a risk of
unreasonable risk of injury to consumers
 Section 2072:

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o Provides a federal tort remedy to persons who are injured as a result of a
knowing violation of a safety standard or a rule of the CPSC
o Warranty Defenses:
 Disclaimer of Remedies
 Must be conspicuous
 Must not be unconscionable

 Contractual limitations on personal injury damages resulting from a breach of warranty for
consumer goods are prima facie unconscionable

 Disclaimers:
 Henningsen v. Bloomfield Motors, Inc.
o RULE:
 Disclaimers of implied warranties for the sale of goods and
consequent limitations on liability are invalid if unfairly procured
(not brought to buyer’s attention or are unclear)
o P bought a new car from Bloomfield motors and ten days after the purchase,
the steering wheel spun in her hands and the car crashed. The contract had a
disclaimer on the back in small writing that said D’s liability for breach of
any warranty would e limited to replacement of defective parts.
 Court held:
 Public policy warrants an invalidation of D’s disclaimer
because it would be unjust to force a buyer to relinquish any
claim for personal injury in the purchase of a car
 Also, P were not even aware of the disclaimer

 STRICT LIABILITY
o Overview
 D sold the product, the product was defective and caused P harm
 Defect existed when it left D’s hands
 Enters the market without a substantial change
 Substantial change would be a question of fact

o Prima Facie Case:


1. D is a commercial supplier;
2. D produced or sold a defective product;
3. The defective product was the actual and proximate cause of P’s injury; and
4. P suffered damages to person or property

o Types of Strict Liability


1. Manufacturing defect
2. Design defect
3. Warning defect
 Each type has elements/factors. STILL must prove the underlying elements of
products liability!

o Greenman v. Yuba Power Producs, Inc.


 RULE:
 By placing a product on the market, a manufacturer becomes strictly liable for a
defect in the product that causes injury to the ultimate user of the product
 Explicitly abandoned warranty law for tort

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 “A manufacturer is strictly liable in tort when an article he places on the market,
knowing it is to be used without inspection for defects, proves to have a defect that
causes injury to a human being.”
o P does not have to prove an express warranty to recover
 It is implicit in a product’s presence on the market that the
manufacturer of the product represents that the products will do the
job it was built to do.

o § 402A. Special Liability of Seller of Product for Physical Harm to User or Consumer
1. 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
2. The rule stated in subsection (1) applies although
a. The seller has exercised all possible care in the preparation and sale of his product,
and
b. The user or consumer has not bought the product from or entered into any
contractual relation with the seller

 402 A – EXPLAINED
 Subsection 1
 If there have been substantial alterations to the product, 402 A does not apply
o Breach of warranty or negligence may work but will fail under 402 A
 Have to be a merchant of that business
 Subsection 2
 Exercising all possible care is NOT a defense
 Privity is NOT relevant
o Not having a relationship with the seller or manufacturer of the product
does not matter. What matters is whether you suffered an injury as a result
of the defective product

 Restatement Third of Torts §§ 1, 2 – Product Defectiveness


 § 1. Liability of Commercial Seller or Distributor for Harm Caused by Defective
Products
A. One engaged in the business of selling or otherwise distributing products who sells
or distributed a defective product is subject to liability for harm to persons or
property caused by the defect
 § 2. Categories of Product Defect
1. A product is defective when, at the time of sale or distribution, it contains a
manufacturing defect, is defective in design, or is defective because of inadequate
instructions or warnings. A product:
A. Contains a manufacturing defect when the product departs from its
intended design even though all possible care was exercised in the
preparation and marketing of the product;
B. Is defective in design when the foreseeable risks of harm posed by the
product could have been reduced or avoided by the adoption of a reasonable
alternative design by the seller or other distributor, or a predecessor in the
commercial chain of distribution, and the omission of the alternative design
renders the product not reasonably safe;
C. Is defective because of inadequate instructions or warnings when the
foreseeable risks of harm posed by the product could have been reduced or
avoided by the provision of reasonable instructions or warnings by the
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seller or other distributor, or a predecessor in the commercial chain of
distribution, and the omission of the instructions or warnings renders the
product not reasonably safe

 Food Cases
 No more distinction between the product itself and the container in which it is sold
1. The two are now treated as one
o If a bottled beverage explodes, it is no longer makes any difference whether
it is due to a defect in the beverage or in the bottle

PRODUCT DEFECTS
 MANUFACTURING DEFECT
o General Rule:
 Product departs from its intended design even though all possible care was exercised in the
preparation and marketing of the product
 Occurs when a product that injures a person does so because there is a flaw that is
not in the general product line – it is a failure of quality control
o Very few cases contain only a manufacturing defect claim

o Standard of comparison between a defective and a non-defective product is the manufacturer’s


own intended design
 Strict liability applies since care in preparation does not matter
 Manufacturers can set their level of quality control based on the expected number of
accidents whose costs can then be spread among product users as a component of
the price

o Burden of Proof
 P not required to prove negligence
 P can still face significant burdens
o Proving existence of defect may be difficult if the product was destroyed in
the accident
o Defect must be traced back to the sale of the product by the target
defendant, so that a defect resulting from later alteration of the product by
the retailer would not result in liability for the manufacturer
o Must prove that the product defect (not SIMPLY the product) caused the
injury
o P can expect to face charges that the injury resulted not from the product
defect but rather from contributory negligence or misuse of the product

 DESIGN DEFECT
o General Rule:
 The foreseeable risks of harm posed by the product could have been reduced or avoided
by the adoption of a reasonable alternative design by the seller or other distributor, or
predecessor in the commercial chain of distribution, or the omission of the alternative
design renders the product not reasonably safe
 Entire product line is challenged
o § 402 A
 “Defective condition unreasonably dangerous”
 Defective condition:
o Condition not contemplated by the ultimate consumer, which will be
unreasonably dangerous to him
 Unreasonable danger:
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o
Dangerous to an extent beyond that which would be contemplated by the
ordinary consumer with ordinary knowledge common to the community
 Became known as the consumer expectations/consumer contemplation test

o Design Defects Tests


 Risk Utility Test
 Balances the dangers and the benefits of a products design
o Balances the ACTUAL dangers not the FORESEEABLE dangers
 Considered factors such as:
1. The utility of the product
2. The seriousness of the dangers posed by the product
3. The availability of safer substitute products
4. The ability to design a safer product that would still be useable and
affordable
5. The user’s ability to avoid the danger by being careful
6. The user’s awareness of the dangers of the product
7. The manufacturer’s ability to spread the loss through the price of the
product
 Other Factors:
o State of the art
 Refers to the existing level of technological expertise and scientific
knowledge relevant to a particular industry at the time a product is
designed
o Foreseeable Product Misuse
 Restatement Third § 2 – foreseeable product misuse must be
considered in determining whether an alternative design should
have been adopted
 Plaintiff HAS to prove the alternative feasible design and that the design could have
made a difference

 Consumer Expectations Test


 “A product is defective if it is dangerous to an extent”
o Ordinary consumer does not want a product that hides a latent or not well
known danger that is impossible anticipate and guard against
 Ex: Mr. Greenman’s Shopsmith lathe was defective because an
ordinary consumer would expect it to hold the wood being turned in
place, rather than coming apart and allowing the wood to fly out and
strike the operator

o Alternative Safer Design


 In order to prove design defect, plaintiff must prove an alternative feasible design
 Test:
 Whether the danger actually avoided by the proposed alternative design would be
greater than:
1. Costs of the new design, AND
2. Loss of product utility from the new design, AND
3. New dangers created by the new design
 Factors:
1. Utility
2. Consumer preference
3. Obviousness of danger
4. Seriousness of the risk

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 What is a safer alternative design?
 Design change must result in an increase in safety sufficient to have prevented or
significantly reduced the harm to the plaintiff
1. This is the fundamental causation requirement
 New design should NOT introduce significant new dangers as the cost of
eliminating the risk that harmed P
 Design must be one the manufacturer could feasibly have adopted at the time the
product was marketed
1. Feasibility:
 Safety gain must be worth loss of utility so that the greater the gain
in safety, the more loss of utility can be tolerated
 Many safety features reduce the utility of the product by
making it harder or more inconvenient to use
 Must use technology that was available to the manufacturer given
the “state of art” at the time of manufacture
 Subsequent technological advances do not retroactively
make older products “defective”
 Alternative design must be economically viable in the marketplace
1. A proposed safety feature that would make the product too expensive to
market successfully would not be required

o Crashworthiness
 A difference existed at one time on the issue whether an automobile was defective if it had
not been designed to minimize injury to occupants during a collision
 Courts have held that if the risk of collision is foreseeable, the design must
reflect that
 Most crashworthiness or enhanced injuries cases involve automobiles, but not all do
 Snowmobile, motorcycle, riding lawnmower, etc.
 Crashworthiness claim against manufacturer requires proof that the defect ENHANCED
plaintiff’s injuries
 Jury may allocate fault between P for causing crash and manufacturer for enhanced
injury if P’s conduct was a proximate cause of the harm for which he is seeking
damages

o Category Liability and Products like Whiskey, Tobacco, and Butter


 § 402 A cautioned that products whose inherent characteristics made them dangerous
were NOT to be considered unreasonably dangerous
 “Good whiskey is not unreasonably dangerous merely because it will make some
people drunk, and is especially dangerous to alcoholics”
 “Good tobacco is not unreasonably dangerous merely because the effects of
smoking may be harmful”
 “Good butter is not unreasonably dangerous merely because it deposits cholesterol
in the arteries and leads to heart attacks”
 Restatement Third § 2
 Widely distributed products could only be subject to liability for defective design IF
a plaintiff proved that a reasonable alternative design was available
 The fact that these products have some dangerous side effects (smoke a cigarette and
something bad happens to you), these are qualities that are inherent in the products
themselves.
 Strict products liability will not apply for these products
 Categorical liability opens possibility that a jury could find that a product was defective
even though no alternative was available

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 That the product was so unsafe and had so little utility that it should not be
marketed at all

o State of the Art


 Key issue:
 Whether D can avoid liability by showing compliance with the “state of the art” at
the time the product was made
 State of the art:
 A label for the requirement for the best scientific and medical technology that is
practically and economically feasible at the time the product was made or marketed
o The product is evaluated in light of knowledge and technology available AT
THE TIME of manufacture rather than at the time of trial

o Open and Obvious Danger


 Most jurisdictions have rejected the obviousness of the danger as a bar to recovery and
instead consider it as ONE factor in the risk utility balancing test
 Example:
o In case where children were killed in fire they started while playing with
cigarette lighter, court ruled that obvious danger of cigarette lighter was
factor to be considered in risk utility analysis but was not determinative

o Prescription Drugs and Medical Devices


 Most jurisdictions have declined to apply strict liability to the design of prescription
drugs
 Follows § 402 A comment K
o Provided for no strict liability in the case of unavoidably unsafe products
 Restatement Third § 6(c)
 Imposes liability for harm caused by defective design, whether grounded in
negligence or strict liability, only if “the foreseeable risks of harm posed by the drug
or medical device are sufficiently great in relation to its therapeutic benefits that
reasonable health-care providers, knowing of such foreseeable risks and therapeutic
benefits, would NOT prescribe the drug or medical device for any class of patients”

o Food
 Courts are split on whether to impose strict liability on vendors of food when the suit is
based on an injury-producing substance in food
 “Foreign-Natural Test”
 Strict liability is only applicable if the injury-causing substance is a
piece of glass, wire, or other substance “foreign” to the food
 If the substance is natural, like bone fragments in meat, pits in
cherries, or shells in nuts, strict liability is NOT available and P must
prove negligence in the preparation of the food in order to recover
 “Reasonable Expectations”
o Regardless whether the injury-producing substance is natural or foreign,
strict liability will lie if the consumer of the product would not reasonably
have expected to find the substance in the food

o Allergic Reaction
 An allergic reaction to a drug/product may occur because of an individual’s unusual
susceptibility to an ingredient
 Since the product is reasonably fit for the ordinary user, might be said there is no
defect and no recovery
 Majority:

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 Handled this as failure to warn issue and imposed a duty on the manufacturer to
warn of possible adverse reactions only if it knew or should have known of the risk

 WARNINGS DEFECT
o Defect due to failure to warn
o Elements:
1. Manufacturer KNEW or SHOULD HAVE KNOWN about the hazard, and
 (Fault based standard)
2. Failed to take precautions in making the product to warn

o Warnings must be:


1. Available to the actual user
2. Understandable to the actual user
3. Sufficiently prominent to attract user’s notice
4. Sufficiently urgent given the gravity of the risk
5. Adequacy of a warning is left to the jury and they often rely on expert testimony

o Plaintiff must ONLY prove that the defendant did not adequately warn of a particular risk that was
known or knowable in light of generally recognized and prevailing best scientific and medical
knowledge available at the time of manufacture or distribution
o Manufacturer is NOT liable for failing to warn about dangers that could not have been discovered
or about uses of products that were not foreseeable
o Rule does not require that the manufacturer warn against unforeseeable and unreasonable uses of
the product, but it does require they alert the consumer to the more common dangers associated
with misuse

o Defective Design AND Inadequate Warning


 Cases often have claims based on both defective design and inadequate warnings
 Many courts have said that warning does not relieve D of liability for defective
design and that warning is one factor to consider in risk-utility analysis but
warnings alone will NOT save a product from being unreasonably dangerous
 Warnings are not a substitute for a reasonably safe design

o Obvious Dangers and Generally Known Risks


 No duty to warn of obvious dangers OR of risks that are generally known
 Example:
o Diving into shallow water of above ground swimming pool
o Risk that milk will cause lactose intolerant consumers to experience
temporary gas and related stomach discomfort is widely known
 Restatement Third § 2(c)
 No duty because warning will not reduce risk and may diminish significance of
warnings about non-obvious risks
o Jury should decide if reasonable minds may differ as to whether risk is
obvious or generally known

o Allergic Reactions and Hypersensitivity


 Duty to warn IF the ingredient is one to which a substantial number of people are allergic,
and the ordinary consumer would not anticipate its presence
 Proving that a substantial number are affected is P’s burden
 Severity of harm is a factor to consider
 Example:

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o Peanut butter does not need to have any further warning about peanut
allergies beyond the name of the product since peanuts are clearly expected
by the consumer and those with peanut allergies are aware of the danger
 Some national fast food chains have a warning on their menu that
their food is fried in peanut oil since the ordinary consumer might
not suspect that an order of French fries could contain peanut
residue

o Adequacy of Warning
 Determination of whether the warning was adequate is usually left to the jury who in turn
rely on expert testimony

o Sophisticated Users
 Extent of expertise of the known user should be taken into account
 Example:
o Plastic pipe manufacturer did not have duty to warn gas company or its
employees because it was common knowledge among workers that failure
to take certain precautions would greatly increase danger from static
electricity build up

o Learned Intermediary Rule


 In cases involving pharmaceuticals, most courts hold that warnings and instructions should
be provided to the physician, who is a “learned intermediary” between the drug company
and the patient and the best person to understand the patient’s needs and assess the risks
and benefits of a particular course of treatment
 Physician then decides what warnings to pass onto the patient in light of their
condition and needs and using the physician’s judgment
 Also applies to medical devices

 Situations where there is no physician:


 Do not apply learned intermediary rule where manufacturer knows there is no
doctor to provide warning to patient or where patient is expected to take an active
role in selection of a product
 Duty to warn:
o Satisfied by a warning to the consumer rather than the learned intermediary
 Restatement Third § 6(d)(2)
o Warning must be given directly to patient in situation where health-care
provider’s role is diminished by circumstances

 Law is not settled on situations where products are marketed directly to the general
public rather than physicians
 Ex: drug that treats baldness, allergies, etc.
 Restatement Third § 6
o Leaving to developing law whether warnings must be given directly to
patients in circumstances where governmental regulation mandates direct
information or where manufacturer is advertising to public

 Manufacturer would NOT be liable if a drug proved to have a dangerous side effect that
testing did not and could not have discovered in advance of the product’s marketing

o Presumption that Warning Will be Read and Heeded


 In many jurisdictions, plaintiff is entitled to a presumption that user would have read and
heeded an adequate warning

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 Assists P in proving causation after P has proved an adequate warning
 D’s evidence may be so strong that court finds, as a matter of law, that an adequate
warning would not have been heeded

o Post-Sale Duty to Warn


 Some courts impose duty on manufacturer to provide post-sale warnings about risks that
are discovered or develop after sale
 Restatement Third § 10
o Post-sale duty to warn determined by balancing factors, including
obviousness of danger, its seriousness, the burden on the manufacturer to
locate those who should be warned, and the likelihood of harm
o Post-Sale Duty to Recall
 VERY FEW courts have extended a manufacturer’s post-sale obligations beyond a duty to
take reasonable steps to provide warnings
 Traditionally, product recall has been a function of federal administrative agencies
rather than tort law
 Most courts have declined to impose such a duty

PROOF
 Claims of Defective Products
o To maintain a claim for a defective product, P must prove:
1. The product that injured P was, in fact, manufactured by D
2. The product was defective and P was injured as a result
3. The defect was present in the product at the time of sale, not introduced by a distributor or
installer or repairer
o These elements can be proven by circumstantial evidence and P need NOT prove that all other
possibilities did not cause the injury

 Effect of Government Safety Statute or Regulation


o Paralleling negligence per se, most jurisdictions provide that a violation of a safety statute or
regulation makes the product defective as a matter of law
o Where product complied with government safety standards:
 Most jurisdictions permit D to introduce evidence of compliance with government
standards on question whether the manufacturer was negligent, or, in a strict liability case,
whether the product was defective
 Evidence of compliance with government standards is something jury may consider but is
NOT bound by

 Res ipsa loquitor has no application to a strict liability case since negligence is not in question but the
inferences are the core of the doctrine are applicable to strict liability
o In other words:
 The fact that the product failed in a way that caused injury may, in a proper case, give rise to
a permissible inference that it was defective and that the defect existed when it left the
hands of D
o As with Res Ipsa Loquitor cases in negligence cases, P must provide sufficient evidence to exclude
other causes of accident not attributable to product malfunction
 Generally, under those circumstances, P is not required to prove a specific defect
 Referred to as the “general defect theory” or the “malfunction theory”

 Rule on Excluding Evidence of Product Improvements to Prove Defect


o Most states do NOT permit the evidence of subsequent improvements to prove negligence or other
culpable conduct

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 Example:
 Federal Rule of Evidence 407 – evidence of subsequent remedial measures not
admissible to prove negligence, defect or need for warning but may be admitted to
prove ownership, control or feasibility of precautionary

 Defect Arises Long After Purchase


o P might have a problem establishing the product was defective or unreasonably unsafe
 It has been said that the seller does NOT warrant that a product will not eventually wear
out

DEFENSES
 PLAINTIFF’S CONDUCT
o Traditional Strict Liability Rules
 Contributory negligence is NOT a defense

o Comparative Negligence
 Most jurisdictions have extended comparative negligence to strict liability products actions
(reduces P’s recovery only to the extent that his own lack of reasonable care contributed
to his injury)
 A few have either refused to recognize comparative fault in products liability OR
have limited it to situations where P assumed the risk
o Assumption of Risk
 When P voluntarily confronts a known hazard, the Second Restatement and some courts
would bar the claim
 Other courts would subject P to the same fault apportionment as in comparative negligence
and limit recovery

o Product Misuse
 General Rule:
 Manufacturer is NOT liable for injuries resulting from abnormal or unintended use
of his product that was reasonably foreseeable

 Product Misuse: Unforeseeable


 A product is not defective if it is safe for normal use
 Therefore, “unforeseeable misuse” of a product leading to injury does NOT result in
strict liability because the product is not defective
o Seller is not liable
 Unforeseeable misuse may be an indication that the product is not defective at all
 Product Misuse: Foreseeable
 Foreseeable misuse imposes on manufacturer a duty to protect the user
o Foreseeability is objective test and will go to the jury on reasonability of
reasonable prudent person
 Manufacturer may have a duty to design the product to avoid harm from the misuse

 Evidence concerning misuse of a product could be used to argue:


1. There was no defect in the product (failure of prima facie case)
2. That any defect in the product did not cause P’s injury (no causation)
3. That P’s unreasonable conduct in contributing to the accident should reduce P’s
recovery (affirmative defense of comparative fault)

 PREEMPTION AND OTHER GOVERNMENT ACTIONS


o Analysis:

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1. Decide if Congress intended to invade area where state’s have jurisdiction
2. Decide if it is expressed or implied
3. Look at plain meaning of the statute (express)

o Express Preemption:
 In statutory schemes where Congress has made its intent to preempt state law clear, the
courts have no choice
 State law is preempted by federal law and the manufacturer need comply only
with the federal statute and the regulations issued under it

o Implied Preemption:
 Where congress has NOT made its intent clear, the courts must determine whether
preemption is warranted and which claims are to be preempted
 Requires case by case analysis because the statutes themselves vary and because
some claims under a given statute may be preempted while others are not under
what are sometimes called “frustration of purpose preemption” and
“impossibility preemption”
 Can also occur when a tort claim would create a situation where it would be impossible for
D to comply BOTH with what the plaintiff in the tort claim is arguing should have been done
and with what the federal law requires

o Government Contractor Defense


 Contractor could be immune from liability from an allegedly defective product if the
manufacturer could show that:
1. The United States approved reasonably precise specifications,
2. The equipment conformed to those specifications, and
3. The contractor warned the US about the dangers in the use of the equipment that
were known to the contractor but not to the US
 Contractor has burden of proving each of the elements of the defense
 Defense is available EVEN IF product was based on a design originally developed for
another buyer as long as the US approved the aspect of the design that P’s claims are
defective

DEFENDANTS OTHER THAN PRINCIPAL MANUFACTURERS/HARM OTHER THAN PERSONAL INJURY


 OTHER SUPPLIER’S OF CHATTELS
o Used Products
 Many courts decline to impose strict liability on sellers of used products, but not all do

o Lessors and Bailors of Chattels


 Restatement Third § 20
 Including lessors in defining an entity that “sells or otherwise distributes” a product

o Retailers, Wholesalers, and Distributors


 Most jurisdictions extended strict liability to these sellers in the chain of distribution
 Restatement Third § 20
 Includes all sellers in the chain of distribution, including retailers and wholesalers,
in the same category as product manufacturers
 Uniform Product Liability Act
 Would hold retailers and wholesalers liable only for their own acts of negligence
unless the manufacturer was out of business or unreachable through judicial
process

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o Occasional Sellers
 A seller who does not hold himself out as having any knowledge or skill in the commercial
sense will NOT be subject to strict liability
 Restatement Third § 1
 Applies only to those engaged in the business of selling or otherwise distributing the
type of product that injured the plaintiff

o Owners
 Owner of a product may be subject to liability for negligence, but NOT for strict liability
since the owner receives products from the stream of commerce; the owner does not place
the product in the stream of commerce merely by offering it to a guest

o Manufacturer of Component Parts or Raw Materials


 Maker of a component part not subject to further processing or substantial change in the
manufacturing process is likely to be subject to strict liability if there is a defect in that part
or material
 May also be liable if he substantially participates in integrating the component or
raw material into a defective product

o Corporate Acquisitions/Successor Liability


 Generally, the successor corporation is liable only if it agreed to assume liability, the
transfer was a fraudulent one, the two corporations merged, or the successor is essentially a
continuation of the original company

o Pharmaceutical Product Liability


 Failure to warn claims against a brand-name manufacturer are allowed, but claims against a
generic drug manufacturer or the manufacturer of an FDA approved medical device
generally are barred

 SERVICES
o Typically not subject to strict liability
 Do not involve a group of consumers needing protection from a remote and unknown
manufacturer
o Predominant Factor Test
 When the transaction has characteristics of both a sale and a service
 Courts will not apply strict liability if the transaction is predominately a service with only
an incidental transfer of goods
 Example:
o No SL because repair of truck steering mechanism was predominately a
service transaction

o Even if strict liability does NOT apply, one who renders a service to another is under a duty to
exercise reasonable care in doing so and is liable for any negligence to anyone who may
foreseeably be expected to be injured
o Some services may be considered “abnormally dangerous”

o Health Care Providers


 No strict liability for health care providers whose patients were injured during course of
treatment by various products, including breast implant, hip prosthesis, electro-surgical
grounding pad, hypodermic needle, spinal rod, and joint implants.
 Hospital is not subject to strict liability for a product provided to a patient during
the course of her treatment

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o Blood, Blood Products and Human Tissue
 Most jurisdictions exempt the providers of blood and blood products and usually human
tissue from SL
 Usually done by statute
 Protection extends not only to the physician or other healthcare provider, but also
to a commercial supplier
 Suppliers only liable if P can prove negligence

o Other Circumstances:
 Animals
 A living animal sold commercially in a diseased condition is a product
 Charts and Maps
 Mass production and marketing of aeronautical charts requires D to bear the costs
of accidents caused by defects in them
 Books and Games
 Restatement Third § 19
o Although a tangible medium such as a book, itself clearly a product, delivers
the information, P’s grievance in such cases is with the information not with
the tangible medium
 Computer Software
 9th circuit suggested in dicta that it though California would apply SL to computer
software that “fails to yield the result for which it was designed”
 Electricity
 Pennsylvania:
o Electricity is a service while passing through transmission lines but becomes
a product after it passes through the meter to the user’s abode
 Judge decides whether the situation sits within the statutory definition or is one to which SL
should apply

 HARM OTHER THAN PERSONAL INJURY


o Economic Loss Resulting From Personal Injury
 Lost wages and medical expenses are common forms of economic loss that result from
personal injury to P and are recoverable, along with P’s other losses, in a strict liability
action.
 Most jurisdictions also allow loss of consortium claims based on personal injury

o Economic Loss WITHOUT Personal Injury or Property Damage


 Products liability law was developed largely to provide compensation to P’s who suffered
personal injury or property damage, so it’s applicability to other types of harm is limited
 An action in strict liability does not lie when the product itself simply did not perform as
expected.

o Damage to Property
 Section 402 A covers damage to property as well as persons and most courts have agreed
with this extension of strict liability beyond personal injury
 When the product itself is destroyed by a defect in it most courts treat this as an economic
loss not recoverable in tort
 When defective product is used in the process of manufacturing another product and that
other product is ruined as a result, treated as damage to property and recovery allowed
under strict liability

o Economic Loss Limitation


 Prohibits recovery for pure economic loss based on strict products liability

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 Pure economic loss:
 A loss resulting from the failure of the product to perform, unaccompanied by
personal injury or damage to other property
o Can only be recovered in action for breach of express/implied warranty
 Reasoning:
 Issues of personal injury and safety require the fixed and unavoidable standards of
tort law, while issues of product performance may be left to the private ordering of
the parties
 Only covers damage to the product itself – damage to other property is covered by the tort
rule
 EXCEPTION:
 A few courts have recognized an exception to the rule that excludes recovery for
pure economic loss when the alleged defect creates an “unreasonable risk” of injury
to persons, even though no one was actually injured.

LEGISLATION AND PRODUCTS LIABILITY

 Tort Reform in the State Legislatures and Congress


o Moved from product liability-specific statutes to more broadly applicable tort reform legislation
 Mostly in the areas of:
 Caps on damages, modification or elimination of joint and several liability, changes
in the standards for awarding punitive damages, changes in the collateral source
rule, and regulation of attorney contingency fees
o No general federal product liability legislation has been considered since 1998 and is unlikely to
arise as an issue in the foreseeable future

 Tort Reform in the 21st Century


o State legislatures have remained active in considering and enacting tort reform during the 21 st
century
o Debate about who will make America’s tort laws – courts or legislatures

NUISANCE
OVERVIEW
 Nuisance Definition:
o Word refers to a kind of interest invaded, a type of damage or harm
 It is NOT a type of conduct on the part of D or a condition created by D
o Nuisance is a field of liability rather than a particular tort

 2 Fields of Liability
1. Public Nuisance
2. Private Nuisance
 Rare for elements of both public and private nuisance to be found in a single claim

 Basis of Liability
o Intent
 Occurs when D knows that his conduct interferes with P’s use and enjoyment of her
property, or is so substantially certain to result from his conduct
 A person who intentionally creates or maintains a private nuisance is liable for the resulting
injury to others regardless of the degree of care or skill exercised by him to avoid such
injury
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o Negligence
 When D has not intentionally interfered with the protected property interest, but has failed
to exercise reasonable care to avoid interference
o Strict Liability
 May be imposed when D’s activity is abnormally dangerous or ultra hazardous or poses an
extreme danger to P’s enjoyment and use of his property

 Basis of liability matters because damages and available defenses may be affected by the basis of the
claim
o Sometimes liability can be grounded on all three theories

 Elements of Nuisance:
1. Unreasonableness
 The harm caused by the conduct is serious and the financial burden of compensating for
this and similar harm to others would not make the continuation of the conduct not feasible
2. Substantial Harm
 Means more than a trifle, significant injury must occur
 Substantial is if it changes the condition of the land, there is measureable economic loss, or
it causes only personal injury
 If it only results in annoyance or discomfort, that must be severe in order to amount
to substantial interference
 Concept of substantial harm is difficult and requires a balancing test
 Compare the extent of harm to different factors
 Greater the magnitude of harm, more likely the court will find the conduct to be a nuisance
3. Recurrence
 Courts will look to the continuing nature of the activity
 Not a conclusive factor – must be considered with others like magnitude of the harm

 Balancing Test
o Gravity of the harm against the utility of D’s conduct
 Factors:
1. Amount of harm caused by the activity
2. Capacity of each party to bear the harm and shift the loss
3. Nature of the clashing land use
4. Nature of the locality
5. Which activity has priority in time

 Circumstances that establish doctrines in Nuisance Law


o Hypersensitivity – the harm must be of a kind that would be suffered by a normal person in the
community
o Sensitive Uses of Land
o Locality – a nuisance may be merely a right thing in the wrong place, like a pig in the parlor instead
of the barnyard
o Right to Farm Statutes
 Enacted in all 50 states – prevent new residents from restricting established agricultural
practices
 Intent is to prevent the encroaching urban population from destroyed farmland by placing
the blame on plaintiffs who “come to the nuisance,” and therefore should not be given a
remedy at law

 PUBLIC NUISANCE
o § 821B definition:
 An unreasonable interference with a right common to the general public.

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 Circumstances that may sustain a holding that an interference with a public right is
unreasonable include the following:
a. Whether the conduct involves a substantial interference with the public health,
public safety, public peace, public comfort or public convenience, or
b. Whether the conduct is proscribed by a statute, ordinance or administrative
regulation, or
c. Whether the conduct is of a continuing nature or has produced a permanent or
long-lasting effect and, to the actor’s knowledge, has a substantial detrimental
effect upon the public’s right
o Requirements:
1. Must be a public right
 Common to all members of the general public
 Does NOT need to effect the entire community, so long as the nuisance will interfere
with those who come in contact with it in the exercise of a public right or it
otherwise affects the interest of the community at large

o Proper Party Plaintiff


 Public representative will likely bring the action for public nuisance
 Since a public right is being threatened and, frequently, the conduct is a minor
crime, the public official is the most appropriate plaintiff
 Pubic official may bring a criminal action to prosecute the crime and then seek civil
damages and injunctive relief

o Private Action for Public Nuisance


 Where a private individual may bring a private action on public nuisance.
 2 conditions:
1. The private individual has suffered special harm in that their harm is
different in kind from the general public and not just different in degree;
2. The private individual has suffered a private nuisance in conjunction with
the public nuisance

o Examples:
 Public Health – pollution or swamp, keeping a diseased animal
 Public Safety – vicious dog, crack house, storage of explosives
 Public Comfort – blocking a public road way or bad odor

o Expanding Realm of Public Nuisance – actions have been brought in these areas
 Street Gang Violence
 Court found that citizens had suffered particular damage through activities that
constituted a public nuisance
 Handgun Liability
 Congress passed the Protection of Lawful Commerce in Arms Act: required the
dismissal of any pending or future claims based upon a general tort theory of
liability
 Methamphetamine Production
 Court rejected the county’s public nuisance claim against pharmaceutical
manufacturers premised on the use of their products in methamphetamine
production

 PRIVATE NUISANCE
o Definition:
 Unreasonable interference/non-trespassory invasion of another’s interest in the private
use and enjoyment of land

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 A tort to an owner/possessor of land
 Interference might be with:
1. Physical condition of the premises – as by blasting or vibration that damages a
house
2. Health of the occupant – as by unsanitary conditions on adjoining property
3. With his comfort or convenience – as by smoke, odors, noise or heat
4. With his peace of mind – as in the case of a nearby funeral home
5. Threat of future injury may be treated as a present menace and interference with
enjoyment – as in the case of stored explosives or a vicious dog
 Typically involves the problem of conflicting land uses

o Elements:
1. P has an interest in the land that has been substantially and unreasonably interfered with
2. D behaved in an intentional, negligent or abnormally dangerous manner

o Proper Plaintiff
 Possessor (adjoining or neighboring)
 Owners
 Estates

o Examples:
 Noise – unusual or sustained
 Light – shining excessive light or absence of light
 Dust
 Smoke
 Smells

o Distinguished from Trespass:


 Trespass to land:
 Claim that protects the possessor of land’s exclusive right of possession. If D
interferes with that right, trespass action is appropriate remedy
 If there is no physical invasion, trespass to land is NOT available as a claim.
 Did not require a physical entry onto P’s premises, although it might accompany a trespass
 Do not have to establish trespass for nuisance

o Nuisance Per Se (at law)


 An act, occupation or structure which is a nuisance at ALL times and under any
circumstances, regardless of locations or surroundings
 Legal business CAN NOT be a nuisance per se
o Nuisance Per Accidens (in fact)
 Those which become nuisances by reason of their location, or by reason of the manner in
which they are constructed, maintained, or operated
 Manner in which it is being operated creates the problem
 May be created or maintained without negligence
 Most private nuisances per accidens or in fact are intentionally created or maintained, and
are redressed by the courts without allegation or proof of negligence

DEFENSES
 Contributory Negligence
o Intentional private nuisance – contributory negligence NOT a defense
o Negligence – most courts say contributory negligence eliminates or reduces recovery

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o Strict Liability – contributory negligence of P failing to discover the danger is NOT a defense BUT if
P discovers the danger and deliberately proceeds to encounter it, his contributory negligence or
assumption of risk may affect his recovery

 Self-Help to Abate a Nuisance


o Only available to those to whom the condition is a nuisance
1. Public nuisance may only be abated by a private individual in the instance that the nuisance
causes or threatens special damage to the individual, apart from the general public
2. Abating a nuisance will NOT excuse unnecessary or unreasonable damage
3. Abating a nuisance does NOT justify inflicting personal injury or breach of the peace
4. Individual exercising self help must notify the wrongdoer of the existence of the condition
and demand the condition’s removal prior to exercising the privilege
o Use of force must be REASONABLE in light of the threatened harm

 “Coming to the Nuisance”


o Old Rule:
o If you come to the nuisance, you cannot complain about the nuisance since it was there
when you arrived.
 P would be barred from recovery
o Court created an exception
o MAJORITY RULE:
 P is NOT barred from recovery from either a public or private nuisance by the sole
fact that he “comes to the nuisance” by buying property adjoining it
o Moving to the nuisance is one factor to be taken into consideration when
determining whether P experienced substantial harm
o Prescriptive rights:
o In private nuisance, you might develop some prescriptive rights but will NEVER develop
prescriptive rights in public nuisance
 Cannot say “I’ve been doing this for 10 years, I can keep doing it”
o Majority Rule:
 One cannot acquire a prescriptive right to maintain a public nuisance, no matter
how long it has continued, even though P brings suit for damages personal to
himself
o Indemnity:
o Spur Industries, Inc. v. Del W. Webb Development Co.
 RULE:
o When the public develops land in the vicinity of a public nuisance, the action
creating the nuisance must be created by the party responsible for its
creation, however, said party is entitled to compensation
 Webb purchased land after the initial presence of the cattle farm. Webb developed
homes and attracted buyers to purchase lots on the property. Sued Spur for public
nuisance because of flies and odor from the cattle.
 Court said Spur may be enjoined from operating its cattle operations but Webb must
indemnify Spur for a reasonable amount of the cost of moving or shutting down
since Webb brought people to the nuisance to the foreseeable detriment of Spur.

NUISANCE REMEDIES
 Damages
o Usually remedy preferred by most courts
o Formula for determining loss:
 Fair market value of the land before injury – fair market value immediately after nuisance
o Types of Damages:
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 Temporary
 Permanent
 Where a nuisance is of such a permanent and unabatable character that a single
recovery can be had, including the whole damage past and future resulting
therefrom, there can be but one recovery
 Punitive
 P must prove that D’s conduct was intentional, gross, willful or wanton
 Injunction
o Generally appropriate where a nuisance would otherwise persist after trial
 Money damages not appropriate
o Conditional Injunction:
 Conditions an injunction on payment of damages; stops until you can impose a mechanism
to reduce or eliminate the problem
 Courts can grant an injunction until the nuisance stops or until money damages are
paid to P
o Balancing of the equities – determines if injunction is the best remedy
 Compares the value of the business against the needs of P
 Factors:
1. Character or extent of the harm suffered by or threatened to P
2. Good faith or intentional misconduct of D or his efforts avoid injury to D
3. Financial investments of the parties and the relative economic harm each will suffer
from grant/denial of injunction
4. Interest of the general public in the continuance of D’s enterprise

OTHER TORTS INVOLVING INVASION OF INTERESTS IN REAL PROPERTY


o 2 other torts that arising on behalf of a landowner because of damage to his interests in the land
o Interference with the Support of Land

o Interference with the Use of Water


 Covers 3 types of water:
1. Water in a watercourse or lake in or adjoin the land (riparian rights)
2. Ground water (subterranean or underground water)
3. Surface waters (from precipitation)

 Riparian Rights
 3 legal theories:
1. Natural flow theory – right to have water flow as it was wont to flow in
nature, qualified only by the right of each riparian owner to make a limited
use of it
2. Reasonable use theory – right to be free from unreasonable uses that cause
harm to the proprietor’s own reasonable use
 Adopted in majority of American states – largely majority rule
3. Prior-appropriation rule – beneficial use of water is the basis of the right
to it and that priority of use is the basis of the division of it between
appropriators when there is not enough for all
 Adopted largely in western states
 Ground Water Rights
 3 theories:
1. English rule of absolute ownership
2. American rule of reasonable use, a rule of correlative rights, and
3. The rule that an “underground stream” is treated like a surface stream
 Surface Waters
 General agreement that landowner can use as much of them as he needs
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DEFAMATION

NATURE OF A DEFAMATORY COMMUNICATION

o Defamatory Communication Definition


o False statement of fact (not an opinion) made to a third party that tends to lower the plaintiff’s
reputation in the community, to lower the esteem where he is held, or that deters others from
associating with him
 Damages P’s reputation – 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
o May be communicated by:
 Innuendo, figure of speech, expressions of belief, allusion, irony or satire, or by works
spoken in jest if not so understood

o Action of defamation will lie ONLY if the statement is both defamatory and false
o Issue of defamation is embedded in time, place, and culture

o Elements of Defamation
1. A false and defamatory statement concerning another;
2. An unprivileged publication to a third party;
3. Fault amounting at least to negligence on the part of the publisher; and
4. Either actionability of the statement irrespective of special harm OR the existence of special harm
caused by the publication

o Common Law Elements


1. A defamatory statement;
2. That is made of and regarding the plaintiff;
3. That is published to others; and
4. That (depending on the type of defamation involved) causes injury

o False or Defamatory Statement


o Judge’s role: to determine whether the communication could bear a defamatory meaning
o Role of Jury: to determine whether the defamatory meaning was the one in fact conveyed

o “Of or Concerning the Plaintiff”


o Defamatory statement MUST refer to P
o Can either be explicit or implicit
 Explicit - When P is identified by name or as the subject of the statement
 Implicit - P does NOT have to be named
 Statement is actionable if P is identified as the subject of the statement

o Proper Plaintiff:
 Living
 NO defamation for the dead since there is no living person whose reputation is
affected
o BUT defamation of the dead may defame the living – could affect a relative
 Company – if it affects the business
 Can maintain an action for defamation that makes others question its honest, credit,
efficiency, or other business or moral character
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 Non-Profit – if it affects the gift
 Defamation can affect its character or operations and may deprive it of gifts or other
sources of revenue

o When Groups are Libeled Against


 § 564A
 One who publishes defamatory matter concerning a group or class of persons is
subject to liability to an individual member of it if, but ONLY if,
o The group or class is so small that the matter can reasonably be understood
to refer to the member, or
o The circumstances of publication reasonably give rise to the conclusion that
there is particular reference to the member
 Large Group:
 Libeled class is LARGE - none can sue even though the language used is inclusive
 Small Group:
 Libeled class is SMALL and each and every member of the group is referred to, any
individual member may sue
 Numerical Approach to Group Libel
 Applied by some jurisdictions
 § 564A comment b
o Groups that are generally successful in pursuing group libel actions number
25 or less
 A minority of jurisdictions have begun to question the numerical approach
o Size is not determinative but is an important factor
o The dead CAN defame
 I.e., defamatory statement in will

o Special Harm or Actionable Without Special Harm


o How to Prove Actionability:
1. Are the words capable of a defamatory meaning?
2. Would the jury understand the statement as defamatory?

o Special Harm = something in addition to reputational harm


 I.e., loss of a marriage or income

o General v. Special Damages


 Special: pecuniary losses
 Loss of gift, job, business, etc.
 General: No pecuniary
 Humiliation, mental suffering, reputation

o Pleading Defamation
o If defamation is not plain on its face, P must plead the context that makes the words or conduct
defamatory
o P must plead:
1. Defamatory words
 The words/statement
2. The Publication
 Term of art – the communication of the words to a third person, someone other than P
3. Inducement
 Have to bring in extrinsic facts to show that the words or conduct were reasonably
understood to convey a meaning defaming P
4. Colloquium
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 Formal allegation that the words were spoken of and concerning P
5. Innuendo
 An allegation of the particularly defamatory meaning conveyed by the words
6. Special damages
 Plead them when they are necessary to the cause of action; will not always have to
prove special damages
o Colloquium and Innuendo must be reasonable in the light of the words spoken and the facts
pleaded in the inducement
 If the words, together with the facts, do not fairly support the defamatory meaning pleaded,
no cause of action is made

o Colloquium
o Reference to P need not be to him by name if it is reasonably understood as referring to him
 If words are NOT reasonably understood to refer to P there is NO defamatory imputation
identifying P
o When P is not expressly identified, issue is whether a reader with knowledge of the surrounding
circumstances could have reasonably understood that the words referred to P
 Fewer the number of persons who are possessed with knowledge of the surrounding
circumstances that identify P, the less damages that may be awarded
o Standard against which the material is read or understood changes with the medium

o Burden of Proof
o P has to allege in his complaint the statement is false
o D has burden to raise affirmative defense
 Truth is an affirmative defense

LIBEL AND SLANDER

o § 568
o Libel consists of the publication of defamatory matter by written or printed words, by its
embodiment in physical form or by any other form of communication that has the potentially
harmful qualities characteristic of written or printed words
o Slander consists of the publication of defamatory matter by spoken words, transitory gestures or by
any form of communication other than those stated in Subsection (1)
o The area of dissemination, the deliberate and premeditated character of its publication and the
persistence of the defamation are factors to be considered in determining whether a publication is a
libel rather than a slander

o Distinction between Libel and Slander:


o Biggest difference lies in the requirement of proof of damages
o Slander:
 Necessary to prove “special damages” (i.e. pecuniary loss)
o Libel:
 Did not require special damages to be actionable

o LIBEL
o Definition:
 Originally concerned written or printed words
 § 568
 Libel consists of the publication of defamatory matter by written or printed words,
by its embodiment in physical form or by any other form of communication that
has the potentially harmful qualities characteristic of written word
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o Damages:
 Damages are PRESUMED
 Do NOT have to prove special damages

o Libel Per Se v. Libel Per Quod


 Libel Per Se:
 Defamatory on its face – no additional facts needed to show that it is defamatory
 Libel Per Quod:
 If it is not defamatory on its face and requires special proof of damages
o Requires extrinsic facts to make it defamatory
o P must allege and prove these extrinsic facts

o SCOTUS has held that a criminal libel statute is unconstitutional IF it imposes a penalty for
making a true statement about a public official
 However, a criminal libel prosecution of public (and private) persons IS sustainable if
“calculated falsehood” is proved

o SLANDER
o Definition:
 Originally oral
 § 568
 Slander consists of the publication of defamatory matter by spoken words,
transitory gestures or by any form of communication other than those covered by
libel
o Damages:
 MUST prove special damages
 Must show nexus between the statement and harm to P’s relationship
 Courts require proof of loss of something of material value as the result of the
damage to P’s reputation from the slander
o If no pecuniary loss is shown, it is NOT enough that P suffered acute mental
distress or serious physical illness
 Loss of friends, becoming ill and rumors spreading are not enough

o Slander Per Se v. Slander Per Quod


 Slander Per Se
 Actionable without proof of damage and existed when D suggested any of four
things:
1. Imputations of Major Crime
 Insufficient to accuse person of being capable of a crime or to have
criminal intent unless criminal act is charged
 Major v. Minor Crimes
 Formula: crime must be one involving “moral turpitude,”
defined as “an inherent baseness or vileness of principle in
the human heart.”
 The categorization of the crime does not control but rather the
character of the act charges
2. Suffered from a loathsome or venereal disease
 Almost no cases applying it this century
 The imputation that P has had even a venereal disease in the past is
not sufficient to be actionable without proof of damages
3. Business, Trade, Profession or Office

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 If the spoken words are likely to affect P in his business, trade,
profession or office, the probability of some “temporal” damage is
sufficiently obvious
 Limited to defamation of a kind incompatible with the
proper conduct of the business itself
 Person must be employed in the profession at the time the
statement is made
4. Serious sexual misconduct
 Principal application of this was a charge imputing un-chastity to a
woman
 American courts found the imputation was equivalent to a charge of
the crime of adultery or fornication, which involved moral turpitude
 Assumption has always been that the imputation of un-chastity is
not so damaging to a man and is not slander per se unless it is under
another exception
 Statements falsely describing a person as lesbian, gay or bisexual are
not defamatory per se

 Slander Per Quod


 Required proof of extrinsic facts known by the recipient of the communication in
order to be slanderous

o LIBEL V. SLANDER
o Factors:
1. The area of dissemination
2. The deliberate and premeditated character of its publication
3. The persistence of the defamation

o Radio v. TV Broadcast
 Most states have statutes that any broadcast defamation is treated as slander whether
there is a script or not
 Common law is libel

PUBLICATION
 Publication is a term of art in defamation cases
o Communication of the defamatory words to someone OTHER than the person defamed
 It is not enough that the words are spoken to P himself, even in the presence of others, if no
one else overhears them

o Communication must have been done intentionally or by a negligent act


 No publication when words are spoken by D directly to P with no reason to suspect anyone
can hear but they are in fact overheard by a concealed listener
 BUT when words are spoken so loudly that D can expect that someone may
overhear, D has published the defamatory imputation

 Instances of Publication
 No publication if the defamatory content is sent by D to P in a sealed letter that is
unexpectedly opened and read by a third person
o BUT there is liability if D knows, or should know, that P’s spouse or
secretary is in the habit of reading P’s mail, or in the circumstances would
likely read it, and the words are read by the person

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 There is publication when a telegraph company transmits a message or a third
party orally repeats a message
 Postal service does NOT make a publication when it delivers a letter
 No publication by a telephone company when its system it used for communication
purposes
o Same rule for an internet service provider

 You have a duty to remove anything that is known to be defamatory

 Republication
o Common Law Rule (MINORITY)
 Every sale or delivery of a copy of the publication created a new cause of action

o Single Publication Rule - Prevailing American doctrine


 The publication of a book, periodical, or newspaper containing defamatory matter gives rise
to but ONE cause of action for libel, which accrues at the time of the original publication,
and that the statute of limitations runs from that date
 True for broadcast or rebroadcast over radio, TV or movie
o However – when 100 different newspapers each publish in their own
editions a news report supplied by AP, there are 100 publications
 Quantity of the distribution will have a bearing on P’s damages

 If P repeats a defamatory statement made by D to P alone, D is not usually responsible for


this publication
 Exception:
o Compelled Republication – May occur if D should expect that P will have to
repeat the defamation as when discharged employee must explain why they
were fired

 Websites or Internet Publications:


 Texas Law:
o Single publication rule applied to a website or internet publication
 Website modification – P argued the modification and reposting should be a second
publication
o Mere addition of information to a website cannot serve as republication of
any supposedly defamatory material already on the website

 Primary and Secondary Publishers


o Secondary Publisher
 Not liable if it did not know about, and had no reason to suspect, libelous matter in the
publication
 Examples: vendor or distributor of a newspaper, magazine, or book

o Primary Publishers
 Liable
 If you do not know, there is a duty to research beforehand
 Newspaper and Book publishing companies are primary publishers
 Subject to strict liability even though it innocently took the defamatory material
from someone else without reason to be put on guard

o Wire Service Rule – used as a defense for primary publishers


 Republication of items received from wire services will NOT be subject to liability IF
1. The service was reputable
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2. Defendant did not know of the falsity
3. The story itself does not reveal its falsity
4. No substantial change was made to the story

o Radio and Television (Broadcasting)


 Some hold they are primary publishers, others hold they are secondary
 Restatement:
 A broadcasting station should be treated as an ORIGINAL publisher

 Effects on Internet/Wire Services


o Internet
 Cannot be held liable unless they provide content themselves
 BUT they may not even be held liable in those situations
o Wire Service
 Liable

 Qualified Privilege
o Under CL, employers enjoyed a qualified privilege when discussing matters related to
employment with individuals having a corresponding interest or duty
 Privilege can go away if employer acted recklessly or with malice

 Communications Decency Act of 1996


o Before this act, Internet Service Providers were classified as secondary publishers
o Grants broad immunity to ISPS – protection extends to ISP’s that are primary and secondary
publishers
o Section § 230 provides broad immunity to providers of an “interactive computer service” for
content posted by third parties.
 A computer matchmaking site may not be held liable for defamatory content posted in a
fictitious dating profile by someone posing as another person

BASIS OF LIABILITY

o New York Times Co v. Sullivan


o RULE:
 If a plaintiff is a public official or is running for public office, they can recover damages for
defamation ONLY by proving with clear and convincing evidence the falsity of the
defamatory statements and the presence of actual malice in the speaker

o Created more breathing space for First Amendment speech interests


o NY Times standard MUST apply in a suit by a public person but states are not required to do this in
a suit by a private person – are free to do so if they wish

o Actual Malice, Burdens of Proof, and the Press


o Actual Malice:
 Proof that the defendant KNEW that the statement was false or acted in RECKLESS
DISREGARD for truth or falsity
 Does NOT require a showing of mean spiritedness or ill will
 Reckless Disregard
 To constitute reckless disregard for the truth, there must be evidence that the
speaker entertained serious doubts as to the truth of their statement
 Serious Doubt Test – Subjective Standard

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o There must be sufficient evidence that D entertained serious doubts as to
the truth of his publication; publishing with such doubts shows a reckless
disregard for the truth

 Can look at D’s knowledge and actions or omission in respect of that knowledge
 Purposeful avoidance by the media may constitute actual malice while failure to
investigate is only negligence
 Negligence and profit motive are insufficient

o Fair Reporting
 Reporters Privilege (or “record libel”)
 Did NOT exempt D from liability unless his report was verbatim or a fair and
accurate summary
o There is now a constitutional requirement of fault in failing to make the
report fair accurate, but it remains a privilege
 Actual malice standard applies for reports on official actions providing a fair and
accurate rendition

 Public Meetings
o A privilege to report often attaches to info of public concern uttered at
public meetings
o Meetings need not be official but should be open to a wide segment of the
public
 Private Meetings
o Not included in the privilege

 Neutral Reportage Privilege – broader


 MINORITY RULE
o When a responsible, prominent organization makes serious charges against
a public figure, the First Amendment protects and accurate and
disinterested reporting of those charges, regardless of the reporter’s private
views regarding their validity. Press should not be, under the First
Amendment, required to suppress newsworthy statements merely because
it has serious doubts regarding their truth
o Literal accuracy is not a prerequisite. Must provide immunity from
defamation suits where the journalist believes, reasonably, and in good
faith, that his report accurately conveys the charges made
 4 Requirements of Neutral Reportage:
1. Charges in the article must either relate to a current public controversy or
create one in their own right
2. Charge must be made by a public official or figure, or by a prominent
organization
3. Charges must be made about a public figure or official
4. Reportage of the charges must be “neutral,” that is, accurately and
disinterestedly republished

o PUBLIC FIGURES AND PUBLIC OFFICIALS


o Public Figure:
 A person that by their statute, fame, credibility or personality commands attention from the
public

 Two Rationales for Imposing a Greater Burden on Public Figures:


1. Their “access to the media,” and

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2. Their assumption of risk

 Public figures can be limited (vortex) or universal (unlimited)


 Limited Public Figure Analysis
1. Determine if a public controversy exists
 Issue must be one publicly debated with foreseeable substantial
ramifications for nonparticipants
2. Whether P’s role makes him a limited public figure in the context of that
controversy
 Voluntary assumption of the risk is not essential – some people are
public figures even if drawn involuntarily into public controversy
 Universal public figures are a select group

 Involuntary/Voluntary Public Figure Examination


 Before P can be classified, as a matter of law, as a limited-purpose public figure, D
must prove 5 necessary elements:
1. P has access to channels of effective communication;
2. P voluntarily assumed a role of special prominence in the public
controversy;
3. P sought to influence the resolution or outcome of the controversy;
4. Controversy existed prior to publication of the defamatory statement;
5. P retained public-figure status at the time of the alleged information

o Public Official:
 Easier to identify than public figures
 People who have, or appear to the public to have, substantial responsibility for or
control over the conduct of governmental affairs
 Any person that has such apparent importance that the public has an independent
interest in the qualifications and performance of that person who holds that
position beyond the general public interest in qualifications and performances of all
governmental employees

o SPEECH OF PUBLIC CONCERN


o Speech involves public concern if it is on a public issue which is important to the general public in
that it invokes a substantial amount of independent and continuing public attention
 Issue must be publically debated with foreseeable and substantial ramifications for non-
participants
 If a person is considered a public figure or official, then the controversy is
considered to be public as well

o First Amendment provides significant protections for speech on matters of public concern
 True speech on these types of matters should generally be protected AT ALL TIMES
 Only reason to disregard the protections is if the speech is FALSE

o Gertz
 All plaintiffs, public or private, in cases of publish interest speech, may claim punitive and
presumed damages where actual malice is proved

o PRIVATE PLAINTIFF’S
o Private Figure:
 Absent clear evidence of general fame or notoriety in the community, and absent pervasive
involvement in the affairs of society, an individual should NOT be deemed a public
personality for all aspects of his life

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 Person does not become a public figure merely because he has become involved in
controversy
 When private individuals are defamed, state has a greater interest in providing
compensation for damaged reputations

o NO requirement of knowledge or reckless disregard in an action by a private person


 States are free to decide the appropriate standard of liability (SL, Negligence, or Actual
malice)
 Negligence is the most appropriate standard (42 jurisdictions apply negligence)
o P has the burden of establishing by a preponderance of the evidence that D
negligently published the defamatory statement
 If strict liability, then D must prove falsity
 Actual malice standard would NOT apply to private person plaintiffs who sued media D’s
 Do not have to prove actual falsehood if statement is not of public concern

o Damages:
 Private plaintiff who establishes liability under a less demanding standard than NYT may
recover ONLY damages that compensate him for actual injury
 Restricted to damages based on actual injury – injury MUST be proved
o Actual injury may be injury to reputation, personal humiliation, mental
aguish and suffering, or emotional distress
 No presumed or punitive damages when liability is not based on a showing of knowledge
of a falsity or reckless disregard for the truth
 Only awarded when actual malice is established

o SPEECH OF PRIVATE CONCERN


o Protection of private speech is not as imperative as protection of speech of public concern
o Damages:
 When defamatory statements do not involve matters of public concern, presumed and
punitive damages absent a showing of actual malice do not violate the First Amendment
 P does NOT have to prove actual malice to get punitives

o OPINION
o Generally, pure opinion is NOT actionable
 EXCEPTION
 Statement implies undisclosed, unascertainable, objective facts that are false and
defamatory – look at the context
 First Amendment does not automatically protect opinions from defamation laws
o Factors:
1. Specific language used;
2. Whether the state is verifiable;
3. General context of the statement; and
4. Broader context in which the statement appeared

o Privilege of Fair Comment – affirmative defense


 Afforded legal immunity for the honest expression of opinion on matters of legitimate
public interest when based upon a true or privileged statement of fact
 Privileged when it concerned matter of public concern, was upon true or privileged
facts, represented the actual opinion of the speaker, and was not based solely for
purpose of causing harm
 DID NOT extend to “a false statement of fact, whether it was expressly stated or implied
from an expression of opinion”

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o Restaurant Reviews
 Have prompted litigation
 Even if review statements could be reasonably regarded as asserting fact, the restaurant is a
public figure and P must show actual malice

o FALSITY
o Common Law Rule on Falsity:
 D must bear the burden of proving truth
o Media Defendant:
 When a media defendant publishes a matter of public concern, a private plaintiff may
ONLY recover damages by showing that the statement at issue is false and D is at fault
 The only reason to disregard First Amendment protections of speech on matters of
public concern is if the speech if false
o P bears burden of showing falsity
 Adds little to their burden – all private plaintiffs must first show D is
at fault

PRIVILEGES
o Absolute Privilege – Cannot be lost
o Judicial Privilege
 Judge has absolute immunity for defamatory words published in course of judicial
proceedings
 If trial is broadcast, judge, attorney and station are covered
 Witnesses, even though they testify voluntarily and not under subpoena
 Hearing of a sanity commission
 When proceedings of administrative agencies are found to be judicial in character
 LIMITATION:
 Once privilege is found to exist, ONLY limitation is that what is said MUST be found
to have some reasonable bearing upon or relation to the subject of inquiry
o Privilege does NOT extend to what is said outside of court

o Legislative Proceedings
 Privilege applied to members of Congress and of state legislatures in the performance of
their legislative functions
 Extends to hearings of the legislative body and to witnesses testifying at the hearings
 Local legislative bodies – like city councils
 Majority view is that they have an absolute privilege

o Federal Public Officials


 Immunity given to executive officers of the Cabinet from defamation while acting as their
duties permitted extended to federal agents of lower standing
 Rank is not determinant, rather it is the scope of the official’s duties
 If publication took place within the scope of the federal official’s office or employment, no
cause of action in defamation is available against the officer or the US
 No action in defamation is available since the US has not waived sovereign immunity in
respect to defamation
 Has led to attempts to frame the action in negligence, thus permitting the action
against the US

o State Public Officials


 High state officials have an absolute immunity in the discharge of their official duties
 Includes press releases to inform public of what they are doing
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 Some state courts have extended the privilege to officials of lower rank
 Many, however, hold that minor officials are entitled only to a qualified privilege

o Conditional or Qualified Privilege


o Allowed individuals some leeway in making statements regarding matters affecting their own
interest, the interests of others (where the statement is being made to the other to help protect
the other’s interests, when there is a common interest between the recipient and the speaker) or
where communication is to one who may act in the public interest
 Immunity from liability for libelous or slanderous statements communicated in the
execution of a political, judicial, social or personal obligation, unless it is demonstrated that
the statement was made with actual malice
 Statements must be made for reasonable manner and proper purpose
o CAN BE LOST
 If the privilege is abused, can be lost.
 Reckless disregard is the test for determining if privilege is lost
o E.g., if D acted maliciously
o Cannot claim a qualified privilege if D knows their defamatory statement is false or does not
believe it to be true

o Situations where qualified privilege exists:


1. Interest of the publisher
2. Interest of the others
3. Common interest of publisher and recipient
4. Communications made to one who may act in the public interest
5. Fair comment on matters of public concern

o Two requirements for qualified privilege


1. MUST have proper motive
2. Reasonable conduct in making the publication
 When the privilege attaches, and you engage in conduct that is outside the scope, is
defeasible and can go away

o Whether a privilege exists is a question of law – whether it is lost is question of fact UNLESS
reasonable minds cannot differ (does not go to the jury then)

o Protection of Publisher’s Own Interests


 Person has qualified privilege to make defamatory statements in a reasonable effort to
recover goods stolen from him; to collect money due him or prevent others from collecting
it; to protest against the mismanagement of a concern in which he has a financial interest; to
protect his own business against unfair competition; to protect his own personal safety; or
to defend any other legitimate interest

o Determining if the Privilege Should be Granted


 Weight is given to whether the information was requested by the recipient or was
volunteered

o Privileges that do not depend on measure of fault on D regarding falsity:


1. Fair Reporting
 Restriction is that the report must be accurate and fair or disinterested
2. Privilege to Provide Means of Publication
 If the author is privileged to publish his statement in a newspaper, the newspaper
itself can be no less privileged
3. Fair Comment

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 Allowed publisher to offer criticism on matters of public concern
 Criticism must be comment or opinion, NOT a misstatement of fact
 Must be fair- based upon true facts and express what an honest-minded person
might conclude
 Opinion does NOT have to be reasonable
 Privilege can be abused and lost IF criticism did not represent the actual opinion of
the critic, or if it were made solely for the purpose of causing harm to the person
criticized
 Defense of fair comment applies where a private person is defamed by
broadcasters

DEFAMATION GOES GLOBAL


 SPEECH Act
o A party may enforce a foreign defamation judgment in a domestic court if either:
1. The law of the foreign forum, as applied in the foreign proceeding, provides free speech
protection that is coextensive with relevant domestic law,
2. The facts, as proven in the foreign proceeding, are sufficient to establish a defamation claim
under domestic law
o Act was a response to perceived threat of “libel tourism”
 A form of international forum-shopping in which a plaintiff chooses to file a defamation
claim in a foreign jurisdiction with more favorable substantive law

REMEDIES
 Damages
o Damages confined to compensation for ACTUAL INJURY unless P establishes actual malice
 Actual Injury may include impairment of reputation and standing in the community,
personal humiliation and mental anguish and suffering as long as there is PROOF
o Presumed Damages:
 Common law position of presumed damages restored for publications NOT of public
concern
o Mitigation of Damages
 Provocation by P is generally regarded as admissible for mitigating punitives
 Minority rule says it can be considered in mitigation of compensatory damages
 Where the defamatory statement would not be believed, the resultant damages are reduced

o Libel Proof Plaintiff Doctrine


 To be applied with caution, since few P’s have SO BAD a reputation that they are not entitled
to obtain redress for defamatory statements, even if their damages cannot be quantified and
they receive only nominal damages
 Requirement of Relevance
 D may plead true damaging facts relevant to P’s reputation but those must be closely
related to the false ones

o Incremental Harm Doctrine


 P pleads that only part of a published work is defamatory
 If the defamatory portion does not go significantly beyond the harm done by the non-
pleaded portions (if the defamatory portion adds no more than “incremental” additional
harm), an action for defamation will NOT lie
 Scalia said this doctrine is a “bad idea”

o Bad Reputation
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 Evidence of a bad reputation may reduce the damages P can recover
 Evidence must relate to the content of the defamation claimed
 Rumors are admissible if shown to be sufficiently widespread to affect P’s
reputation

o Punitive Damages
 Freely awarded at CL if malice was shown
 Punitives allowed in private figure/private speech context

 Declaratory Relief
o Purpose is to obtain a judicial determination that the statement about P is false, and thus to
vindicate his reputation – to make him whole, as far as the law can

 Self-Help
o First remedy of any defamation victim is self-help
 Using available opportunities to contradict the lie or correct the error and minimize its
adverse impact on reputation
 Defamed party may make a response to the defamatory statement about him if he can find a
suitable medium for response
o Right of Response Statutes
 Several states have passed statutes requiring a public communications medium to give a
right of response to a person who claims that he has been defamed by it
o Retraction Statutes – in about 30 states
 Retraction, to be effective, must be unequivocal and not partial or hesitant and hypothetical
 Evasive and incomplete retraction MAY be grounds for punitive damages

 Injunctive Relief
o Prior restraint of a publication runs afoul of the First Amendment

PRIVACY
 What is Privacy?
o Protects your personal affairs – it is an “umbrella” tort with 4 branches
 General Rule:
o One who invades the right of privacy of another is subject to liability for the resulting harm to the
interest of the other

 4 Branches of Privacy
1. Unreasonable intrusion upon the seclusion of another
2. Appropriation of the other’s name or likeness
3. Unreasonable publicity given to the other’s private life
4. Publicity that unreasonably places the other in a false light before the public

 First Amendment Concerns


o Protection of the right to privacy potentially invades the First Amendment
o Zacchini v. Scripps-Howard Broadcasting Co.
 TV station broadcast human cannonball’s performance from blast off to landing.
 Had to balance individual’s interest with the medias
 Right of publicity protected an entertainer’s right to trade upon his or her talents to make a
living and protected society’s interest in the facilitation of creative energy
 Newsgathering is an important function but station should be required to pay damages

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 If there was no opportunity to earn money for the spectacle, performer’s incentive
to deliver the performance and audience’s opportunity to view it would diminish
 Constitution does NOT privilege media to broadcast copyrighted materials or private
exhibitions, such as sporting events, without compensation

o Concerns about the balance between free speech under the First Amendment on the privacy right
 Example:
 Vanna White case – dissent said right to publicity had become too expansive and
inconsistent with free speech notions where actionability rests simply on the
invocation of the “celebrity’s image in the public’s mind.”

 INTRUSION
o Involves the invasion of a person’s private space or affairs
 One who intentionally intrudes, physically or otherwise, upon the solitude or seclusion of
another or his private affairs or concerns, is subject to liability to the other for invasion of
his privacy, if the intrusion would be highly offensive to a reasonable person
 Example:
o When D intrudes into P’s home (e.g., by peering through P’s windows) or
eavesdrops on P’s conversations through microphones or wiretapping
 Nature and identity of the intrusion is very important
 What can be intruded upon?
 Place, conversation, private matters, penetration of a physical zone (video and
listening devices)
 You are allowed to re-tell and repeat things but recording things is an intrusion!
 Publication of the information is not necessary for intrusion by seclusion
o ELEMENTS
 Intrusion must be intentional and into a private place, conversation, or matter; and
 Highly offensive to a reasonable person
o Highly Offensive Factors
 Degree of the intrusion
 The context
 Conduct and circumstances surrounding the intrusion
 Intruder’s motives and objectives
 The setting in which he intrudes
 The expectations of those whose privacy is invaded
o Reasonable Expectation of Privacy
 People can have reasonable expectations of privacy in places they do not own
 Intrusion may be available where person cannot sue for trespass
o Example: public restroom
 Not all cases of trespass give rise to intrusion
 Expectation of privacy does not have to be complete, can be limited
 Examples:
o Doe v. Doe – there was limited, but reasonably, visual privacy in the
workplace
o De May v. Roberts – presence of unnecessary male observer at home delivery
of P’s child was an intrusion even though delivery was also observed by P’s
husband and the attending doctor and a woman assistant
 Public nature of the place bears on whether there was a reasonable expectation of privacy
 Where the interest protected is HIGHLY personal, for example of a sexual or intimate kind,
psychological tranquility is at stake and the expectation of privacy is at its highest
 BUT knowingly exposing oneself in public has no privacy right
o Situations Where You Don’t Normally Have Expectation of Privacy
 Ordinarily no liability for taking P’s photo in a public place
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 Farmer’s market in LA, courtroom, etc.

 APPROPRIATION
o The unauthorized use of one’s photograph in connection with an advertisement or other
commercial enterprise gives rise to a cause of action which would entitle the plaintiff, without
proving special damages, to a judgment of nominal damages, and to injunctive relief if and when the
wrong is persisted in by the offending parties
o ELEMENTS
1. Defendant appropriates (makes use of) Plaintiff’s name or likeness
2. Use was for Defendant’s own purposes or benefit, commercially or otherwise
3. Plaintiff suffered damages
 P does not have to show their name/likeness has value to recover
4. Defendant cause the damages incurred
 EXCEPTION:
o Tort will not apply when D’s use of P’s name/likeness is backed by a First
Amendment privilege

o Newsworthiness Privilege
 Privilege that can defeat a prima facie case, barring recovery
 Permits the use of P’s name or likeness when that use is made in the context of, and
reasonably relates to, a publication concerning a matter that is newsworthy or of
legitimate public concern
o Argument is that the article relates to a legitimate matter of public
concern, making it constitutionally protected speech
 Public or Private Matter?
o If purpose is primarily non-commercial = PRIVILEGED
 Privilege will apply
o If purpose is primarily commercial = NOT privileged
 Privilege will NOT apply
 Content matters because it will determine whether or not 1st amendment
protection applies for D
o Reporting crimes and convictions are typically matters of public concern
o Article that has commercial undertones may still be protected if it concerns
a legitimate matter of public concerns
 Commercial Speech: speech that proposes a commercial
transaction
 It is the content of the speech, not the motivation of the
speaker, that determines whether particular speech is
commercial
o Right of Publicity
 Protects the commercial value of a plaintiff’s personal image
 Requires the advantage be specifically commercial
 Governments interest is in providing P with a cause of action to protect his ability to
maintain public interest in his performance

 UNREASONABLE PUBLICITY TO PRIVATE LIFE


o Imposes liability for the publication of private facts when the matter publicized is a kind that:
 Would be highly offensive to a reasonable person; and
 Is not a legitimate concern to the public
o ELEMENTS
 Defendant must publicize
 Some private information about plaintiff
 The disclosure of the private information must be highly offensive to a reasonable person
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 The information disclosed must not be a matter of legitimate public concern

o Legitimate Public Concern


 Determined by looking at the community subjectively and whether the public is entitled to
this particular information
 Account must be taken of the customs and convention of the community
 Line should be drawn when the publicity cease to be the giving of information to which the
public is entitled, and becomes a morbid and sensational prying into lives for its own sake,
with which a reasonable member of the public, with decent standards, would say that he
has no concern
o Publication
 Publication of true information about P
 It is NOT an invasion of privacy to communicate a fact concerning P’s private life to a single
person or a small group of people
o Private Information
 Information must be confidential
 If the information is in the public domain, there is nothing to protect
 The recipient of the confidential information may have a duty to warn or protect persons
who may be injured at the hands of the provider of the information
o Example: Tarasoff case – duty of mental health professionals to warn or
protect third parties of dangers posed by patients
 If there is a tort duty to disclose information, NO liability for doing so
o Publicity
 One who INTENTIONALLY seeks publicity or puts himself in the private eye if often held to
be a public figure and to have no right to complain of publicity that reasonably bears upon
his public activity
 Ex: actor, professional athlete, inventor, etc.
 Can incidentally become actors in an event of public interest and become a public figure in
relation to that event
 Ex: P’s husband murdered before her eyes
 People captured on film incidental to newsworthy reports have NO cause of action
 Ex: P, daughter of Katie Holmes, was photographed with her mother outside of a
courthouse
o Breach of Confidentiality
 Duty of Confidentiality:
 Whenever personal data is collected under express or implied promise of
confidentiality or a legal obligation of confidentiality, the entity collecting it shall
maintain its confidentiality.
 May also be based on ethical standards like professional rules of conduct or law
 Some courts hold there is a distinction between breach of confidentiality and right to
privacy while others have not.
o Defense:
 Court has NOT held that truth is an absolute defense in a privacy case
 But, truth of statements can have an important impact on whether D is held liable
(other factors include whether the information was obtained lawfully and how it
relates to the public interest)
o Constitutional Law
 SCOTUS has stopped short of constitutionally condemning the law
 Where state’s interest is of a sufficiently high order
o “Where a newspaper publishes truthful information which it has lawfully
obtained, punishment may lawfully be imposed, if at all, only when narrowly
tailored to a state interest of the highest order”

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 FALSE LIGHT
o One who gives publicity to a matter concerning another that places the other before the public in a
false light is subject to liability to the other for invasion of his privacy if:
 The false light in which the other was placed would be highly offensive to a reasonable
person, and
 There is publicity that must be highly offensive and false

o ELEMENTS
 Defendant must publicize some matter that places plaintiff in a false light
 The false light must be highly offensive to a reasonable person
 Defendant must have had knowledge of or acted in reckless disregard as to the falsity of
the publicized matter and the false light in which the other would be placed

o False light suit can NOT be maintained unless there is evidence D made a misrepresentation of fact
that created a false impression on the public’s part regarding P
 If D simply satirizes P or makes obviously false claims in jest, tort will not lie
o D’s use of P’s own words CAN give rise to a false light claim
o Tort focuses not on the truth of falsity of a statement, but on whether a statement leads the public
to believe something false about the plaintiff

o Government’s interest is in providing P with a cause of action to recover for damages to reputation

o Actual Malice
 Public figures must prove ACTUAL Malice; private figures need only NEGLIGENCE
 Actual Malice: knowledge that the statement was false OR reckless disregard of
truthfulness of the statement
 Matters of public concern require ACTUAL MALICE
 Time Inc. says this – Gertz (defamation) did not require this, but Gertz is not
presumptive here
o Texas does NOT recognize false light invasion of privacy

 First Amendment and Intentional Infliction of Emotional Distress


o One of the rights of American citizenship is the right to criticize public men and measure
 Public officials and figures may sometimes be subject to “vehement, caustic, and sometimes
unpleasantly sharp attacks”
o First Amendment prohibits assigning liability for the tort of IIED, without more than sufficiently
outrageous conduct, in matters relating to public officials and figures
 Holding otherwise would unnecessarily assign damage awards political cartoonists and
satirists for caricatures that inevitably play up negative features of their subjects would be
O Public figure CANNOT recover damages for IIED without showing the publication was made with
actual malice
O Whether D is liable turns on whether the claimed speech is private or public
 If speech is public, First Amendment provides greater protection than if the speech is
private
 Speech is of public concern when it relates to any matter of political, social or other
community concern or when it is the subject of legitimate news interest and value to
P
 Private speech typically does not implicate issues of public importance that often warrant
heightened protection
O Even though Public speech is protected by the First Amendment, it is not limitless
 Public speech is still subject to reasonable time, place or manner restrictions and is not
protected when it occurs outside a personal residence or abortion clinic entrance

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MISUSE OF LEGAL PROCEDURE
 Misuse of Legal Procedure
o Tort created primarily for the purpose of protecting individuals against harms inflicted upon them
as the result of certain types of abuses of the legal system
 Injuries:
 Typically range from emotional distress and embarrassment to actual economic
losses
 Found on both the criminal and civil side
o Relates to some other case that was going on – the other case that was being prosecuted is either
criminal or civil in nature

 Malicious Prosecution
o Focuses on D’s motive in wrongfully initiating some type of legal action against P that was
inappropriate from the very beginning
 Remedy for people who were wrongfully subjected to criminal or civil prosecution
o ELEMENTS
1. A criminal prosecution initiated by D;
2. A lack of “probable cause” for the criminal prosecution;
3. Common law malice by D;
4. A termination of the prosecution in favor of the accused; and
5. Special damages

o Criminal Prosecution Initiated by the Defendant


 Element may be met by:
1. Indictment or information
2. The issuance of criminal process to bring the accused before a magistrate whose
function is to determine whether he is guilty or is to be held for later determination
3. Arrest on a criminal charge
 D must have taken an active role in actually initiating that charge in addition to merely
causing a formal criminal charge to be brought against the accused
 D’s malicious prosecution must be the proximate legal cause of commencement of legal
charges

o Lack of Probable Cause


 Requires that some reasonable basis must exist for believing that the accused has
committed the crime charged
 Person who initiates the criminal proceedings must make a good faith effort to investigate
all of the facts surrounding the alleged criminal activity
 Objective and subjective test when determining whether they had actual knowledge or
should know under the circumstances

 Mistake of Fact:
 Prosecutor must have reasonable grounds for NOT believing that the accused is
guilty of the criminal charge
o If prosecutor does NOT honestly believe that the accused was guilty, no
probable cause
 Reasonable mistake will NOT destroy probable cause
o D’s subjective knowledge is question of fact for jury

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 If a reasonable person would investigate further to make more certain of the facts
before instituting criminal proceedings and the prosecutor fails to do so, he may be
found to have acted without probable cause

 Mistake of Law:
 Layman who institutes criminal proceeding on facts that do not constitute a crime
mat be held to have acted without probable cause if he failed to consult an
attorney before initiating the charges
o May be circumstances where such conduct is reasonable
 Some courts hold that even a reasonable mistake of law will not support probable
cause

 Effect of Various Occurrences on Determination of Probable Cause


 Action of Magistrate on Preliminary Hearing
o Discharge is conclusive of LACK of probable cause UNLESS it was not on the
merits or was based on testimony of the accused at the hearing
 Outcome of Proceedings
o Abandonment by the prosecutor is evidence of LACK of probable cause
o Conviction is usually held to be conclusive on existence of probable cause
o Acquittal does not have any effect
 Advice of Counsel
o Conclusive on the issue of probable cause IF the advice is sought in good
faith and is given after a full and fair disclosure of the facts within the
accuser’s knowledge and information

o Common Law Malice


 Does NOT necessarily mean hatred, spite or ill will, but rather a purpose in initiating the
prosecution other than that of bringing a criminal to justice
 Malice is constituted when D has used the prosecution to extort money from the
accused, to recover property from him, to collect a debt, or to compel performance
of a contract
 Look to primary objective of D – element usually left to the jury
 Jury are to be instructed that lack of probable cause may be evidence of the
existence of malice, but that malice is not evidence of probable cause

o Termination in Favor of the Accused


 Must be an actual termination of the underlying criminal proceeding and termination must
be in favor of the accused
 Element met by discharge by magistrate at a preliminary hearing, grand jury refusal to
indict, a nolle prosequi, dismissal, failure to prosecute for lack of evidence, quashing of
indictment, acquittal
 NOT met by an indecisive termination or by the impossibility of bringing the accused
to trial
 § 674 – test that turns on the “circumstances under which the proceedings are withdrawn”

o Damages
 P must have suffered from damage from the prosecution – it is assumed that some damage,
such as harm to reputation, will necessarily follow
 Same is true of humiliation and other mental suffering
 May be recovery of special damages that P can prove
 Ex: arrest or imprisonment, discomfort or injury to health, and expenses incurred in
defending the criminal damages
 Punitive Damages CAN be awarded at the discretion of the jury
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 Malice is an ingredient in the determination of punitive damages

 Wrongful Institution of Civil Proceedings


o Malicious prosecution is often expanded to cover not only criminal prosecutions but also frivolous
or unwarranted civil actions
o Elements are generally the same for both – major difference is damages

o ELEMENTS
1. Prior proceedings terminated in favor of the present plaintiff,
2. Absence of probable cause for those proceedings
3. “Malice”
 Malice = a purpose other than that of securing the proper adjudication of the claim
in which the proceedings are based

o Damages:
 NOT presumed, must be proven
 Jurisdiction are split on what the rule should be for damages
 English Rule
o MUST prove special injury
 American Rule
o Does NOT require a showing of a special injury
 Special Injury: harm to P’s fame, person or liberty, or property
 Proof of special injury prevents tons of unnecessary litigation
 Harm normally resulting from arrest or imprisonment
 Harm to reputation, expense that he has reasonably incurred in defending himself
against the proceedings, any specific pecuniary loss that has resulted from the
proceedings, any emotional distress that is caused by the proceedings

 Abuse of Process
o Involves various types of legal process which, although properly initiated against P, nevertheless
should NOT have been brought at all because of D’s improper motive in doing so

o ELEMENTS:
 P must plead and prove:
1. An ulterior purpose; and
2. An act in the use of process which is improper in the regular prosecution of the
proceeding

o Ulterior Purpose
 Refers to D’s true (i.e., subjective) motivation for causing the process to be issued, and that
purpose must be for something other than that for which the process was designed to be
used
 Can be proven directly – where D made a demand for some collateral advantage over P
 Can be implied from D’s use and disposition of the process once an unfair advantage over P
has been obtained

o When Abuse of Process is NOT Available:


 For merely filing a frivolous action, absent proof that the claim was filed for a collateral or
ulterior purpose
 Procurement or issuance of process with malicious intent, or without probable cause, is
not actionable

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 Action for medical malpractice to coerce a settlement by tying a physician up in litigation
with its attendant time away from practice may establish malice but does not constitute
abuse of process
 Not delimited by the requirements of malicious prosecution
 Abuse of process action may proceed without termination of action in favor D, an
essential element of malicious prosecution

o Tort of Spoliation of Evidence


 Integrity of litigation process depends upon availability of accurate and reliable information
being made in evidence
 Expectation of a preservation of evidence
 Jurisdictions are split
 Can result in a tort in some jurisdictions
 In most jurisdictions, results in an adverse inference
o Adverse inference is a rule you can raise when the other party has
documents that no longer exist

MISREPRESENTATION

INTRODUCTION
 Three Forms of Misrepresentation:
1. Negligent Misrepresentation
2. Fraud/Deceit (Intentional)
3. Innocent Misrepresentation

INTENTIONAL MISREPRESENTATION
 ELEMENTS:
1. Misrepresentation made by D of material, past or present fact;
2. Scienter;
3. An intent to induce P’s reliance on the misrepresentation;
4. Causation (actual reliance on the misrepresentation);
5. Justifiable Reliance by P on the misrepresentation; and
6. Damages

 § 526. Liability for Fraudulent Misrepresentation (Deceit)


o One who fraudulently makes a misrepresentation of fact, opinion, intention or law for the purpose
of inducing another to act or to refrain from action in reliance upon it, is subject to liability to the
other in deceit for pecuniary loss caused to him by his justifiable reliance upon the
misrepresentation

 Misrepresentation
o D must make a misrepresentation to P
 D’s actions may constitute a misrepresentation
 Intentionally concealing something will be treated as if D affirmatively misstated that fact
o Requires representation
 If D says nothing and remains silent, there is no claim

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o Usually there is a requirement that false representation be of material past or present fact.
 Misrepresentation of opinion MAY be actionable in certain cases
 Material:
o A matter is material if it is one to which a reasonable man would attach
importance in determining his choice of action in the transaction in question
 Something you would want to know before making the transaction

 False representations are ONLY actionable if they are based on existing facts
 A statement that a third party has the intention to do something can constitute an
assertion of fact if the individual making the statement intended the recipient to
understand the statement as an assertion of fact
 Misrepresentation as to an individual’s state of mind is a misrepresentation of fact
and is actionable

o Failure to Disclose Material Fact:


 Common Law – almost never misrepresentation
 Modern Law – failure to disclose by itself does not constitute misrepresentation

o Duty to Disclose Occurs in: (§ 551)


1. Fiduciary relationship between the parties
2. Matters known to him that he knows to be necessary to prevent his partial or ambiguous
statement of the facts from being misleading
3. Subsequently acquired information that he knows will make untrue or misleading a
previous representation that when made was true or believed to be so
4. The falsity of a representation not made with the expectation that it would be acted upon, if
he subsequently learns that the other is about to act in reliance upon it in a transaction
with him
5. Facts basic to the transaction, if he knows that the other is about to enter into it under a
mistake as to them, and that the other, because of the relationship between them, the
customs of the trade or other objective circumstances, would reasonably expect a disclosure
of those facts

o Non-Disclosure
 D who does NOT have a duty to disclose known facts to P will not be liable for fraud based
on his mere concealment of those facts from P
 D who conceals a material fact will ONLY be liable for fraud if he also utters a falsity,
half-truth, or misrepresentation of a material fact

o Fraudulent Misrepresentation
 Individual may NOT be held liable for fraudulent misrepresentation if he reasonably
believes his representation is accurate
 Misrepresentation made on insufficient, although reasonably believable grounds
does NOT amount to fraud
 A belief might be sufficiently unreasonable that the court will determine that the belief is
not in good faith and thus not realistically held by D

o § 550. Liability for Fraudulent Concealment


 One party to a transaction who by concealment or other action intentionally prevents the
other from acquiring material information is subject to the same liability to the other, for
pecuniary loss as though he had stated the nonexistence of the matter that the other was
thus prevented from discovering
 Commonly applied in 2 situations:

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1. When D actively conceals a defect or other disadvantage in something that
he is offering for sale to another
 D is subject to liability if he paints over and so conceals a defect in a
chattel or a building that he is trying to sell to P and thus induces P to
buy it in ignorance of its defective character
2. When D reads a K to P and omits a portion of it
 Or if D stacks aluminum sheets he is selling as to conceal defective
sheets in the middle of the pile

 Scienter – culpable state of mind


o P must prove that D made the representation knowing it had to be false or that it was made with
reckless disregard as to its truth or falsity

o Requires P to prove that D:


 Knew the statement was false,
 Made the statement without belief in the truth (not confident in accuracy of their
statement);
 Made the statement in reckless disregard of the truth

o § 526. Conditions Under Which Misrepresentation is Fraudulent


 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 representation that he states or
implies, or
c. Knows that he does not have the basis for his representation that he states or
implies

 Intent to Induce Reliance


o D must have intended to induce P or a class of person to which P belongs to act/refrain from acting
in reliance of the misrepresentation

 Causation
o P must prove that the misrepresentation played a substantial part in inducing him to act as he did.
 P must prove actual reliance

 Justifiable Reliance
o P’s reliance must be justified
 Reliance of P on representation of fact is almost always justified
 P does not have a duty to investigate a statement by D to determine if it is true or
false
o But P may not overlook the obvious
o If P does his own investigation and relies upon his own investigation rather
than the statements of D, no claim for misrepresentation
 P cannot rely on an obvious falsehood
o If the statement is so obviously wrong that people should see the falsehood,
P cannot rely – obviousness of the falsehood would make reliance similar to
assumption of risk
o Court must determine whether the falsity of the statement relied upon was
detectable by ordinary observation. Court takes into account:
 Intelligence and experience of P and the relationship between the
parties involved
 Materiality:

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 P must show that the fact that he relied on was material to the underlying
transaction

o Reliance on false statements, opinion, value or quality will be viewed as unjustified


 Opinion:
 Expression of an opinion cannot constitute fraud because an opinion is too
indefinite to be relied upon
 General rule is that opinions are not actionable, BUT
o If the person stating it is saying something they genuinely don’t believe, then
it becomes an actionable fact
o If they misrepresent a fact and make assertions that someone can
reasonably rely on, then it can be actionable
 Look to see if it an opinion, fact, or opinion that can be interpreted as
a fact
 “Puffing,” or offering a favorable but exaggerated opinion of a product, by a
manufacturer will NOT constitute actionable fraud based on a misrepresentation of
the quality of a product IF the seller and buyer possess relatively equal bargaining
power
o There is increased likelihood that a manufacturer’s puffing will result in
actionable fraud when the puffing relates to a quality of the product a buyer
would find material to his decision to purchase the product

 EXCEPTIONS:
 D has Superior Knowledge
o If the D making a false representation of opinion has a superior knowledge
of the subject, reliance by P without such knowledge might be justified
 Statements of Law
o Treated as statements of opinion if they are merely predictions as to the
legal consequences of facts.
o May NOT be justifiably relied upon unless statement is made by a lawyer
(superior knowledge rule operates).
 Statement of law that includes express or implied misrepresentation
of fact is actionable
o Example:
 D falsely states that the house she is offering for sale conforms to the
city pluming and electrical requirements. Liability exists.

o General Rule:
 Fraud cannot be predicated upon misrepresentations of law or
misrepresentations as to matters of law. Misrepresentations
concerning the legal effect of an instrument have been held to NOT
be actionable.
 Reasoning:
 Every man is presumed to know the law and no man, at least
without special training, can be expected to know the law
o § 545: Misrepresentations of Law
 If a representation as to a matter of law in a business transaction is a
representation of fact the recipient is justified in relying upon it to
the same extent as though it were a representation of any other fact
 If the representation as to a matter of law in a business transaction is
a representation of opinion as to the legal consequences of facts
known to the maker and the recipient or assumed by both to exist,

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the recipient is justified in relying upon it to the same extent as
thought it were a representation of any other opinion
o If a representation concerns the legal effect of facts not disclosed or not
otherwise known to the recipient, it may justifiably be interpreted as
implying that there are facts which substantiate the statement
o If a representation as to a matter of law in a business transaction is a
representation of fact, the recipient is justified in relying upon it to the same
extent as though it were a representation of any other fact

 Statements of Future Events


o Viewed as statements of opinion and may NOT be justifiably relied upon.
o Exception exists if the statement of future events is characterized as a
statement of “present intent,” which is viewed as a statement of fact/
 Limited to cases where D has control over future event
o Example:
 D promises to pay P $50 per month installments for the next two
years.

 Damages
o P may ONLY recover if he has suffered actual pecuniary loss as a result of the reliance on the false
statement
 If misrepresentation was made by D directly to P, most courts give the benefit of the
bargain measure of damages

o § 549. Measure of Damages for Fraudulent Misrepresentation


1. The recipient of a fraudulent misrepresentation is entitled to recover as damages in an
action of deceit against the maker the pecuniary loss to him of which the misrepresentation
is a legal cause, including
a. The difference between the value of what he has received in the transaction and its
purchase price or other value given for it; and
b. Pecuniary loss suffered otherwise as a consequence of the recipient’s reliance upon
the misrepresentation
2. The recipient of a fraudulent misrepresentation in a business transaction is also entitled to
recover additional damages sufficient to give him the benefit of his contract with the maker,
if these damages are proved with reasonable certainty

 Defenses
o Contributory Negligence does NOT bar recovery when the misrepresentation is intentional

 Advantages to Action in Deceit over a Contract Action for Breach of Promise


1. Deceit may avoid statute of frauds
2. May avoid difficulties of the parol evidence rule, which prevents any promise not integrated into a
written K from being regarded as part of the K
3. May avoid the defense that the promise was without consideration
4. May avoid defense that the K was an illegal one
5. May avoid defense of the statute of limitations, since a longer period may be applicable in the deceit
action, or the statute may run only from P’s discovery of the fraud
6. May avoid a limitation of liability contained in the K itself
7. May avoid a defense against the K action, such as infancy
8. May avoid the necessity of joining parties to a joint K in one action

NEGLIGENT MISREPRESENTATION

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 ELEMENTS:
1. Misrepresentation made by D in a business or professional capacity;
2. Breach of duty toward particular P;
3. Causation;
4. Justifiable reliance by P upon the misrepresentation; and
5. Damages

 § 552. Information Negligently Supplied for the Guidance of Others


1. One who, in the course of his business, profession or employment, or in any other transaction in
which he has a pecuniary interest, supplies false information for the guidance of others in their
business transactions, is subject to liability for pecuniary loss caused to them by their justifiable
reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or
communicating the information.
2. Except as stated in Subsection (3), the liability stated in Subsection (1) is limited to loss suffered
a. By the person or one of a limited group of persons for whose benefit and guidance he
intends to supply the information or knows that the recipient intends to supply it; and
b. Through reliance upon it in a transaction that he intends the information to influence or
knows that the recipient so intends or in a substantially similar transaction.
3. The liability of one who is under a public duty to give the information extends to loss suffered by
any of the class of persons for whose benefit the duty is created, in any of the transactions in which
it is intended to protect them.

 § 311
1. One who negligently gives false information to another is subject to liability for physical harm
caused by action by the other in reasonable reliance upon such information, where such harm
results:
a. To the other, or
b. To such third persons as the actor should expect to be put in peril by the action taken
2. Such negligence may consist of failure to exercise reasonable care
a. In ascertaining the information, or
b. In the manner in which it is communication

 Business Relationships
o Recovery allowed where D’s statements are made in the course of his business or profession and D
had a pecuniary interest in the transaction
 Action generally confined to misrepresentations made in commercial setting

 Liability to Third Persons


o D is liable for negligent misrepresentation to a limited group of persons whom D either:
 Intended to reach with the information, or
 Whom D knows the recipient intended to reach
o D is under a duty of due care only to those persons to whom the representation was made or to
specific persons who D knew would rely on it

o Restatement § 531:
 A person who makes a misrepresentation is liable to the person or class of persons the
maker intends, or “has reason to expect” will act in reliance upon the misrepresentation
 Foreseeability alone is NOT sufficient
o Tortfeasor must have information that would at least lead a reasonable
person to conclude that there is an “especial” likelihood that it would
influence persons in P’s position

o Book Publisher

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 Publisher does NOT have a duty to investigate the accuracy of the contents of the books it
publishes
 First Amendment protects the ideas and expressions contains in books
 No duty found in following cases:
 P’s decedent died of malnutrition following diet set forth in D’s book, P sued D for
failure to warn of surf conditions in a travel book, etc.

o Endorsements
 Company that endorses a product may be liable to a purchaser who, relying on the
endorsement, buys the product and is injured because it is defective and not as represented
in the endorsement.
 If D represented to the public that it had “superior knowledge and special
information” about the shoes in giving it’s seal of approval, D assumed a duty to fully
and properly test and inspect the shoes

o Accountants Can Be Liable in Negligence


 Accountant can be held liable to a party who relies to its detriment upon a negligently
prepared financial report if the relationship between the parties is so close that it
approaches privity
 Absence of privity alone should not bar negligence actions by relying third parties

 To establish that a relationship with an accountant approaches privity, P must prove:


1. That the accountant was aware that the financial reports were to be used for a
particular purpose,
2. That the accountant knew that P would rely on the reports for that purpose, and
3. That there was some conduct linking the two parties, proving that the accountant
understood the reliance

 Other Elements:
o Causation, justifiable reliance, and damages are analyzed the same as under Intentional
Misrepresentation

 § 552B. Damages for Negligent Misrepresentation


1. The damages recoverable for a negligent misrepresentation are those necessary to compensate the
plaintiff for the pecuniary loss to him of which the misrepresentation is a legal cause, including
a. The difference between the value of what he has received in the transaction and its
purchase price or other value given for it; and
b. Pecuniary loss suffered otherwise as a consequence of the plaintiff's reliance upon the
misrepresentation.
2. The damages recoverable for a negligent misrepresentation do not include the benefit of the
plaintiff's contract with the defendant.

INNOCENT MISREPRESENTATION
 § 552C. Misrepresentation in Sale, Rental or Exchange Transaction
1. One who, in a sale, rental or exchange transaction with another, makes a representation of a
material fact for the purpose of inducing the other to act or to refrain from acting in reliance upon
it, is subject to liability to the other for pecuniary loss caused to him by his justifiable reliance upon
the misrepresentation, even though it is not made fraudulently or negligently.
2. Damages recoverable under the rule stated in this Section are limited to the difference between the
value of what the other has parted with and the value of what he has received in the transaction
 Caveat:

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 No opinion as to whether there may be other types of business transactions in
which strict liability may be imposed for innocent misrepresentation

 Minority View:
o An innocent representation may be actionable if the declarant has the means of knowing, ought to
know or has the duty of knowing the truth
 Majority View (stated above in § 552):
o Bring it under K law and rescind the K
 Give expectation losses
o When a party seeks rescission of a transaction on the ground of misrepresentation of a material fact
by the other party relief will be granted even though the misrepresentation was innocent

 § 402 B. Misrepresentation by Seller of Chattels to Consumer


o One engaged in the business of selling chattels who, by advertising, labels or otherwise, makes to
the public a misrepresentation of a material fact concerning the character or quality of a chattel
sold to him is subject to liability for physical harm to a consumer of the chattel caused by justifiable
reliance upon the misrepresentation, even though
 It is not made fraudulently or negligently, nd
 The consumer has not bought the chattel from or entered into any contractual relation with
the seller
o This is a STRICT LIABILITY rule for physical harm to the consumer, resulting from a
misrepresentation of the character or quality of the chattel sold, even though the
misrepresentation is an innocent one, and not made fraudulently or negligently.

DAMAGES

 Flexibility Theory
o Under flexibility theory, in fraud and deceit cases, P may recover either the benefit of his bargain or
his out of pocket expenses depending on the circumstances of the case

 Benefit of the Bargain/Expectation Damages – Deceit


o Theory is to compensate the P as thought the transaction had been carried out as represented
o Gives P the contract measure of damages
 Will result in greater damages

o Difference between the actual value of what P received and the value it would have been if it had
been as represented
 Value Represented (promised) – Value Received
 Subtract the actual value of the property from the amount paid by P
o Fraud By the Seller:
 The better the promise, the higher the damages

 Out of Pocket Losses (Minority) – Both


o Theory is to return P economically to the position he was in prior to the fraudulent transaction thus
allowing him to recoupment of actual losses but NOT expected gain
o Formula:
 Value of the object as represented – its actual value at time of sale

 Consequential Damages – Both


o P may recover for expenses resulting in extra expenses
 Ex: One who buys a horse represented to him as gentle may recover for personal injuries if
he is kicked by the horse
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o Damages recoverable as consequential loss under deceit may be BROADER than those under
negligent misrepresentation

INTERFERENCE WITH ADVANTAGEOUS RELATIONSHIPS

BUSINESS RELATIONS

 INJURIOUS FALSEHOOD
o Broad general principle of liability for any false and malicious statement resulting in pecuniary loss
to another
o ELEMENTS:
1. A false statement of a kind calculated to damage a pecuniary interest of the plaintiff
2. Publication to a third person
3. Malice in the publication
4. Resulting special damage to the P, in the form of pecuniary loss

o May consist of:


 Publication of matter derogatory to P’s title to his property, or its quality, or to his business
in general, or even to some element of his personal affairs, of a kind calculated to prevent
others from dealing with him, or otherwise to interfere with his relations with others to his
disadvantage

o Intentional Infliction of Harm and Causation


 Injurious falsehood requires malice involving a showing of knowledge that the statement
was false, or intent to harm P or affect his interests in an unprivileged manner
 Harm intended must have been either intended or the “natural and probable result” of
the publication of the false statement.
 Not sufficient that the harm is merely reasonably foreseeable

o Special Damages:
 General rule is that P must prove special damages but the modern trend is moving towards
reasonableness as a standard. Requires P to be specific only when it is reasonable to expect
him to do so.
 Ratcliffe v. Evans
o RULE:
 In a claim for injurious falsehood, the plaintiff need not prove special
damages
o General damages are sufficient to maintain the claim.
o Would be unreasonable for P to come forward with the prospective
customers to prove special damages
 Puntive and emotional distress damages are rarely available

o Injurious Falsehood and Defamation


 Same statement may both defame a person and disparage the goods he sells
 Distinction:
 If the statement made reflects ONLY upon the quality of what P has to sell, or the
character of his business as such, it is merely injurious falsehood and proof of
special damages is essential

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 If the statement imputes to P reprehensible personal characteristics or misconduct,
it is defamation

o Opinion v. Assertion of Fact


 Unfavorable Comparison Doctrine – Absolute Privilege
 Statement which takes the form of an unfavorable comparison of products, or which
“puffs” or exaggerates the quality of one’s own product is not ordinarily actionable
o Expresses an opinion, the truth or falsity of which is difficult or impossible
to ascertain
 Permits statements of comparison, that D’s goods are the best in the market, that
they are better than P’s, or other boasting or exaggeration, even though D is fully
aware that what he says is false, and the publication is made for the purpose of
injuring P by taking business away from him

 Facts
 If the statement is backed, or impliedly backed by fact, the statement may be
actionable.
 Implies that the party making the statement is fortified with the substantive facts to
make it; implies that they have the evidence to support its claim
o Ex: saying one’s product is, in general, better than another’s and asserting
that the other’s is only 40% as effective as one’s own
 Second statement is an assertion of fact
 Competition for business does not justify intentional false statements of fact
concerning the competitor’s business or product when the statements are not
confined to comparing the product or conduct of the competitor with that of P

o Conditional Privilege
 D has a qualified privilege to protect his own interests by the assertion of a bona fide claim
to any kind of property
 Example:
o Includes an assertion that P is infringing D’s patent, copyright, or trademark
rights by the sale of his product
 If an individual has an economic interest to protect, such as the ownership of land, he is
conditionally privileged to prevent performance of the contract of another threatening that
interest by asserting an honest claim in good faith

 Privilege can be defeated:


1. If D’s motive is shown to be actual malice, as motivated by a desire to do harm
2. If D has acted in bad faith, as where it is found that he did not honestly believe his
assertions to be true
 D will be liable for excessive publications to persons whom it is not reasonably necessary
to reach or if he includes statements that he knows to be untrue

 INTERFERENCE WITH EXISTING OR PROSPECTIVE CONTRACTUAL RELATIONS


o Includes interference with an existing contract either by causing third party not to perform his
contract with P, by preventing P from performing his own K or making that performance more
expensive or burdensome, or interference with prospective contractual relationships

o ELEMENTS:
1. D knew contract existed
2. Intentionally and improperly interfered with performance of K (except marriage0
3. Between another and third person
4. By inducing or otherwise causing third person not to perform K

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5. Pecuniary loss resulting to the other from the failure of third person to perform

o Factors to Consider when Determining Whether Interference is Improper § 767


1. Nature of the actors conduct;
2. Actor’s motive;
3. Interests of the other with which the actor’s conduct interferes;
4. Interests sought to be advanced by the actor;
5. Social interests in protecting the freedom of action of the actor and the contractual interests
of the other;
6. The proximity or remoteness of the actor’s conduct to the interference; and
7. The relations between parties

o § 766. Intentional Interference with Performance of Contract by Third Person


 One who intentionally and improperly interferes with the performance of a contract (except
a contract to marry) between another and a third person by inducing or otherwise causing
the third person not to perform the contract, is subject to liability to the other for the
pecuniary loss resulting to the other from the failure of the third person to perform the
contract
 Contracts Terminable at Will:
 Permits the third person to terminate the agreement at will
o Until he has terminated it, K is valid and D may not improperly interfere
with it
 The fact that it is terminable at will is to be taken into account when determining
damages
 Similar to interference with prospective contractual relations because of the future
interest

o § 766A. Intentional Interference with Another’s Performance of His Own Contract


 One who intentionally and improperly interferes with the performance of a contract (except
a contract to marry) between another and a third person, by preventing the other from
performing the contract or causing his performance to be more expensive or burdensome,
is subject to liability to the other for the pecuniary loss resulting to him

o § 766B. Intentional Interference with Prospective Contractual Relations


 One who intentionally and improperly interferes with another’s prospective contractual
relation (except a contract to marry) is subject to liability to the other for the pecuniary
harm resulting from the loss of the benefits of the relation, whether the interference
consists of
a. Inducing or otherwise causing a third person not to enter into or continue the
prospective relation or
b. Preventing the other from acquiring or continuing the prospective relation

o Malicious Interference
 Intentional interference without justification
 P has the burden to show all of the factors the making D’s interference improper

o § 774B. Intentional Interference with Inheritance or Gift


 One who by fraud, duress, or other tortious means intentionally prevents another from
receiving from a third person an inheritance or gift that he would otherwise have received
is subject to liability to the other for loss of the inheritance or gift
 Individual may maintain a claim for tortious interference with his inheritance
o Valuing the expectancy – depends on how egregious the conduct is
 Think about the expectancy interest

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 TEST:
o Whether there is a high degree of probability that the interest is going to be
conveyed or transferred

o Not protected:
1. Contracts that are illegal or against the public interest
2. Contracts to marry

o Justification for Interference


 A reasonable and disinterested motive for the protection of other individuals, or the
public, will justify intentional interference with contract
 Justification may arise from a contractual or property right or economic interest of
sufficient weight to take precedence
 Burden:
o Some place burden on P to show interference was improper or malicious
o Some place burden on D to show that interference was justified

o Damages
 Pecuniary loss
 Benefits of the contract or the prospective relation;
 Consequential losses
 For which the interference is a legal cause
 Emotional distress or actual harm to reputation
 If they are reasonably to be expected to result from the interference
 Injunctive relief
 In appropriate circumstances, may be granted against future violation
o But, courts are reluctant to grant injunction if it would enforce SP for a K of
personal services
 Punitive Damages
 Since the tort is an intentional one, punitive damages are recovered
o Punitives are awarded for outrageous conduct because of D’s evil motive or
his reckless indifference to the rights of others
 Awarded on the basis that D’s act is intentional and without justification

 TORTIOUS BREACH OF CONTRACT


o Party to a contract CANNOT be liable in tort for interfering with his own contract
 Interfering conduct must constitute an independent tort, such as fraud

o Bad Faith Denial of a Contract


 In a breach of K suit, the aggrieved party may NOT also maintain a tort claim against the
breaching party for its bad faith denial that the K ever existed
 Can only file claim for bad faith denial of K under limited circumstances
 Insurance K’s
o Not widely recognized anymore – needs to be in an insurance case
 Should not be cognizable for multiple reasons:
1. Goal of K remedy is to compensate P for the loss incurred as a result of the
breach
2. Tort prevents predictability and stability in commercial affairs
3. Maintenance of the tort maintains the potential for unnecessary additional
and excessive tort damages resulting from breach of K claims
4. Preference for legislative direction in the area of breach of K remedies

o Other Business Torts


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 Copyright and Patent Infringement
 Trademarks and Trade Names
 Trade Secrets
 Unfair Competition
 Other Statutes Involving Regulation of Business
 Labor Law
 Civil RICO

FAMILY RELATIONS

 Claims Based on Intentional Interference


o Alienation of Affections
 Cause of action arising from the willful and malicious interference with a marital
relationship
 Some statutes reserve this for immediate family members
 Relative MAY be privileged to interfere if relative acts primarily to advance what is
reasonably believed to be the welfare of the alienated spouse

1. Husband and Wife


 In some states, spouse may bring a claim against third party for alienation of
affections
o P must show that the spouse’s mental attitude and conjugal kindness were
converted by D
 Most courts have held it is not necessary to show act of adultery and
that D need not be a romantic rival
2. Parent and Child
 If a child is abducted or D intentionally deprives a parent of a child’s economic
services, precedent supports a claim
 Most courts have declined to create an alienation of affections remedy either on
behalf of a parent for the loss of a child or a child for loss of a parent
3. Criminal Conversation
 Tort in which a married person may recover both compensatory and punitive
damages by proving that the spouse and D engaged in sexual intercourse
4. Statutory Abolition of Actions
 Statutes, known as “Anti-Heart Balm” laws abolished tort actions based on
intentional interference with family relations that carry an accusation of sexual
behavior

 Claims Based on Negligent Interference


o Loss of Consortium
 CL:
 Husband was legally entitled to his wife’s earnings and services; courts protected
H’s right to these assets against negligent interference by third parties
 H may also be able to recover general damages for loss of companionship and sexual
relations
 Modern:
 Both spouses permitted to bring claim for loss of consortium
 Emphasis on damages has shifted away from economic loss to intangible loss
o Ex: loss of companionship and affection
 Derivative claim
 Subject to all defenses asserted against the spouse who was physically injured
 Parent and Child:

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 Courts have generally declined to allow claims for pure loss of companionship when
a child seeks a recovery from D who injured his parent
o Minority of states recognize this claim
 Claims by parents solely for loss of companionship of their injured child have
received similar treatment

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