Torts II Outline
Professor Bauman
A. Imposing liability on a party that may not be guilty of any negligence
1. the fault of the defendant is no longer the basis of liability
2. the defendant is held liable for a tort committed by another
3. to justify imposing liability look first at the relationship between the defendant and actual tortfeasor
B. Respondent
1. employer is liable for the torts committed by an employee while the employee is acting within the course and scope of employment
2. active negligence = fault; respondent superior = no fault
3. control theory: basis the imposition of liability on the employer’s right to control and direct the activities of the employee
a. looks at what the employee was doing and askes whether it was part of the employees job (within the course and scope of employment)
b. not a fault theory
4. enterprise theory- basis liability on the benefit to the employer’s enterprise provided by the employee’s conduct
a. benefit theory
b. looks more to the purpose of the employee’s activity (whether it was intended to benefit the enterprise in some way)
c. if the enterprise has to pay for torts committed by the employee the enterprise will have to absorb the cost resulting in increased prices (economic incentive to be safe and keep accidents down)
d. Policy bases: this approach looks for the deep pocket, the employer who can afford insurance and incorporate this price in to their product
e. provides compensation for victim by spreading the loss around society because the party responsible can lay the price off through their products
f. forces the enterprise to internalize the losses to others caused by its operations which provides an incentive for safety precautions
C. Employer/ Employee Relationship
1. Who is an employee?
a. an employee must be distinguished from an independent contractor
b. the general rule is that the employer is vicariously liable for torts committed by an employee within the course and scope of employment, but not tort committed by an independent contractor
c. the distinction is drawn based on the 10 factor test of the Restatement of Agency (no one factor alone is decisive)
1. the extent of control the master has over the work
2. whether or not the one employed is engaged in a distinct occupation or business
3. the kind of occupation (is the work usually done under the direction of the employer or by a specialist without supervision?)
4. skill required
5. whether the employer supplies the tools, instrumentalities and place of work
6. length of employment
7. method of payment, by the time or by the job
8. whether the work is part of the regular business of the employer
9. whether or not the parties believe they are creating the relation of master and servant
10. whether the principal is or is not in business
d. the most important of these factors are the extent of the control over the detail of the work exercised by the employer, and whether the work done by the agent represents a trade or business distinct from that of the employer
e. borrowed servant doctrine- the services of an employee may be loaned to another employer, if that employer is now in control of the employee, the employee may be the new employer’s “borrowed servant”
1. this matters for workers compensation and vicarious liability
2. should be consent on the part of the employee because changing the company you work for is a significant change of employment status
3. fact situation not to be decided as a matter of law
2. Scope of employment
a. going and coming rule- the commute is not generally within the course and scope of employment
1. this is a cost of the individuals decision to drive a car and will be dealt with by auto insurance
2. exception: employee is given a task to complete on the way to and from work for the employer (factual dispute)
3. exception: travel to the place of work creates a special hazard or contains special risks
b. frolic v. detour
1. frolic- occurs when the employee departs from the course and scope of employment to a significant degree in pursuit of the employee’s own interests
2. detour- less serious deviation from the course and scope of employment
3. the employer is vicariously liable for torts committed during detours, but not those committed during frolics
4. frolic and return- the frolic is over when the employee’s own business is completed and the employee returns to the business of the employer; usually the employee is not back within the scope of employment until actually back on the authorized route
3. Intentional torts
a. Employer is vicariously liable for the intentional torts of employees if:
1. the tort is within the scope of employment and in furtherance of the employer’s business; AND
2. the tort was foreseeable in view of the nature of employment
b. dual purpose doctrine- even if the EE was motivated by some personal interests, if EE is at all engaged in the furtherance of ER’s business, the ER may be held liable
c. some courts impose vicarious liability if the tort occurred during the performance of the employee’s duties for the employer
d. horseplay à always argued by ER to be outside the scope of employment, approach along the same lines as frolic v. detour
4. Vicarious liability for punitive damages
a. punitive damages require some form of malice
b. for vicarious liability, the problem is to establish that the principal, not just the agent, acted with malice
c. this requires that the principal must have directed the action of the agent, participated in it, or ratified it
d. this is not really vicarious liability because punitive damages are a punishment for more serious forms of misconduct
e. punitive damages are properly awarded if:
1. the doing and the manner of the act was authorized, or
2. agent was unfit and it was reckless to employ or retain, or
3. agent was employed in managerial capacity and was acting within scope, or
4. act was ratified or authorized
5. Independent Contractors
a. general rule: a principal is not vicariously liable for the negligent of an independent contractor
b. rationale: the principal is not in a position to control the manner in which the IC performs the work
c. If the principal does attempt to control the work, this may result in liability because the principal in fact acted without due care in its supervision of the contractor
d. Exceptions:
1. where the K requires intrinsically dangerous work
2. where the principal is charged by law with the duty breached
3. where the work will create a nuisance
4. where the work will involve peculiar risks of harm unless proper precautions are taken
5. where the act is illegal
e. Rationale for the exceptions:
1. non-delegable duties
2. as a matter of public policy we do let the principal evade certain duties by contracting out of the work
3. in these areas, we expect the principal to take special precautions to prevent injury
f. Problem p.648
6. Joint enterprise
a. members of a joint enterprise are vicariously liable for torts committed by other members of the group
b. elements:
1. an agreement among the members of the group
2. common purpose
3. community of (pecuniary) interest in that purpose
4. equal right of control on the enterprise
c. Social joint enterprises
1. the joint enterprise doctrine began with car trips where a passenger would be responsible for the negligence of the driver
2. this often resulted in imputing the drivers contributory negligence to the passenger
3. in recent years courts have limited the doctrine in the car and social setting by requiring some pecuniary interest
7. Joint venture
a. has the same elements as a JE but is explicitly a business or profit making association
b. a JV is distinguished from a partnership by the fact that it is usually for a more limited purpose, and exists for a limited period of time
c. In a JV the members of the group owe each other fiduciary duties with regard to the common purpose of the group
II.
Strict
Liability
A. Strict liability for animals
1. possessors of animals are strictly liable for harm caused by the trespass of their animals on the property of others
2. exception to the trespass rule: dogs and cats
3. possessors of wild animals (those not customarily domesticated in the region) are SL for al harm done by the animal as a result of the dangerous characteristic of the animal
a. question of locality as to what is ordinarily domesticated in the area
4. domesticated animals- a possessor of an ordinary domesticated animal is not SL for harm (other than from trespass) caused by the animal UNLESS:
a. the possessor knew the animal had a dangerous propensity, and
b. that dangerous propensity was the cause of the harm
B. Coase Theorem- Coase argued that if the assignment of rights were clear, and if the parties could costlessly negotiate, the efficient result would occur no matter how the law assigned rights and responsibility for damages
1. ex. Is it worthwhile to build a fence to keep the cows out of the corn?
a. social cost: who should bear the cost if the cows stray and eat the crops?
b. Will the party with responsibility build a fence?
c. Real world problems: transaction costs, free riders, distributive effects, common or public goods (consider these issues in determining negligence v. SL. Who will bear the cost?)
C. Strict liability imposed when one (Rylands v. Fletcher):
1. makes a non-natural use of the land
2. in the courts of the non-natural use brings or collects on the land something not there in its natural state, and
3. this material escapes from the land and causes injury to neighboring land and its possessors
D. Abnormally dangerous activities
1. Factors:
a. high degree of risk
b. likelihood that harm will be great
c. inability to eliminate risk using due care
d. activity is not a matter of common usage
e. activity is inappropriate in the locality
f. social value of the activity
g. *no one factor is decisive
E. Difference in negligence and SL
1. Important to understand!
2. You are negligent when B<PL
a. safety precautions have to be less than accident costs
b. if you don’t want to spend $100 to avoid $50 worth of accident costs you are in a negligence regime
c. in a SL regime the defendant is better off not spending the money in safety and paying off the accident when it occurs
d. SL results in the same level of care, the difference is who pays for the accidents
1. negligence à victim pays
2. SL à injurer pays but sill wont take safety precautions bec it is cheaper to just pay off the accident
3. SL does create incentives that negligence does not:
a. relocate activity
b. find a substitute
c. reduce amount or level of activity
4. Factor C, inability to eliminate risk using due care, has become the most dominant factor
III.
Products
Liability
A. Theories of recovery: deals with the problem of the liability of supplies of the products to users and others for losses caused by some defect in the product. 3 theories of recovery are used to attempt to impose liability:
1. negligence
2. breach of warranty
3. strict products liability
B. Privity
1. Winterbottom v. Wright- it was one time held that a manufacturer or seller of a product was not liable to a claimant injured by the product unless privity of K existed, that is, unless the claimant had purchased the product directly from the defendant
2. The result was often no remedy because the retailer was not negligent and the negligent manuf. was not in privity
3. Exceptions
a. Thomas v. Wincheste)- privity does not apply when a product is imminently dangerous to human life (manuf. à retailer à doctor à patient)
1. the court is concerned about unknowable liability to unknown parties
2. a product is imminently dangerous when it is foreseeable
3. in MacPherson v. Buick Motor the exception swallowed the rule when the ct held that a product is a thing of danger if it is foreseeable that the product is likely to cause injury if negligently made
b. independent cause- owners act of negligence causes one who is invited by him to use his defective appliance on the owners premises
c. one who sells or delivers an article which he knows to be imminently dangerous to life or limb to another without notice of its qualities is liable to any person who suffers an injury which might have been reasonably anticipated
C. Breach of Warranty
1. Most common types:
a. negligence in manufacturing the product
b. negligence in inspecting or testing the product ( by any party with a duty to do so)
c. negligence in the advertising or sale of the product, typically a problem of failure to warn about dangerous attributes of the product
2. Public policy arguments for SL:
a. manufacturer can best anticipate and guard against product hazards
b. manufacturer can best assure against losses
c. SL avoids the proof problems of negligence
d. Would in essence change the warranty of safety into a tort duty
3. Warranty can be thought of as an express or implied representation about the quality of attributes of a product.
4. If the product does not live up to certain requirements and loss results, a breach of warranty claim may provide recovery.
5. Type of loss:
a. if a dangerous condition of the product results in personal injury or physical damage to property, courts often merge breach of warranty and strict torts liability
b. if the product performs poorly resulting in economic loss, courts treat this breach as a commercial dispute and require compliance with UCC (notes in book on UCC)
6. abolition of privity limitation in implied warranty situations when dealing with sales to consumers of defective products
7. limitations on warranty:
a. the UCC imposes a requirement that the claimants give prompt notice of the breach to the manufacturer
b. the concept of warranty seems to require that the buyer have relied on the warranty in making the purchase
c. in spite of limitations on the ability to do so, sellers may still be able to limit or disclaim warranties
d. UCC itself limits privity of K
D. Strict Products Liability
1. Section 402A: Defendant is held strictly liable when:
a. defendant is in the business of selling the product
b. defendant in fact “sells” the product
c. at the time the defendant sells the product, the product is in a defective condition
d. the defective condition renders the product unreasonably dangerous
e. the defect is the actual and proximate cause of harm to the plaintiff
2. Comments:
a. comment g: meaning of defective condition
1. defect has to be in the product when it leaves the seller’s hands
b. comment I: meaning of unreasonably dangerous
1. more dangerous than the ordinary consumer would suspect
2. not unreasonably dangerous if ordinary consumer understands the harm (i.e. tobacco)
c. comment j: failure to warn
1. does the consumer understand the danger of the product? How to use the product safely?
d. comment k: unavoidably safe products (prescription drugs)
1. warning à if the consumer understands the risk, they can then make an informed choice
e. comment n: contributory negligence as a defense
3. R2T on defects:
a. manufacturing defects- a flaw in construction that causes the product to depart from its intended design
b. design defects- the products very design rendered it dangerously unsafe
c. warning defects- failure to inform the user of potential dangers makes the product dangerously unsafe
4. Manufacturing defects
a. identify the flaw in the product
b. prove the flaw caused the harm
c. trace the evidence of the flaw to the time of the sale of the defective product by the defendant
d. negate other sources of the flaw, such as maintenance or mistake
e. defects must be in the product when it leaves the manufacturers hands
f. problem with factual issues
5. Design defects
a. 2 tests:
1. consumer contemplation (expectation) test: a product is defective if it is dangerous to an extent beyond what would be expected by the ordinary consumer
a. a product is defective if it is dangerous to an extent beyond what would be expected by the ordinary consumer
b. the test is based on comments g and I which make defect depend on the product being more dangerous than the ordinary consumer would expect
c. problems:
1. if the danger is obvious or a warning is given the plaintiff will lose under this theory even if the product could have been made safer at a very low cost
2. product such as new drugs that may present a risk to a few people could be found defective under this test, even though the overall benefits of the drug are huge
3. gives little guidance to the jury
2. risk-utility test: balances the dangers and the benefits of the product design
a. looks at the product as designed and asks whether the magnitude of the danger presented by the product is larger than the utility of the product
b. compares the actual dangers presented y the product (not the foreseeable dangers) with the actual benefits provided by the product (not the anticipated foreseeable benefits)
c. problems with incorporating safety:
1. product may become less useful
2. may change the product to decrease the chances of one accident while increasing the chances of another
d. factors in balance:
1. utility of the product
2. likelihood and severity of harm from product
3. availability of substitute products
4. manufacturers ability to design out danger
5. users ability to avoid harm by using the product carefully
6. users awareness of the dangers because of common knowledge of warnings
7. manufacturers ability to spread the loss
e. fairly liberal test, not widely applied
f. looks like a negligence standard, but courts try to make it SL
3. Product intended to be used by adults, risk of child use
a. must prove the design was unreasonably dangerous
b. have to design against foreseeable kinds of misuse
c. look at risk-utility factors to prove whether or not product as designed is unreasonably dangerous
d. manufacturers defenses:
1. customer preference- utility is lose with child proof mechanism
2. users should be aware there is a likelihood child will get a hold of it
e. prevailing rule: R3T on products liability (p739)
6. Unavoidably unsafe
a. Prescription drugs: rule choices
1. SL for design defect (do the risks in fact outweigh the benefits?)
2. SL unless the drug is unavoidably dangerous
3. Liability only for failure to warn (comment k)
b. public policy considerations:
1. stifling innovation and deterring development of new drugs
2. the role of the FDA in drug testing and approval
3. price increases
4. lack of availability of some drugs
c. design v. warning
1. under comment k the duty of the manuf is to warn about dangers that are known or should have been known about
2. R3T: narrow definition of defective design (never prescribe drug to any class of patients if defectively designed)
d. learned intermediaries
1. for most prescription drugs the manuf must give the warnings about the product to the physician ( the learned intermediary)
2. it is then the duty of the physician to inform the patient of the risks and benefits of the drug under the informed consent doctrine
3. in a few situations where the manuf knows no physician will be involved the warning must be given directly to the patient (i.e. mass immunization)
7. Failure to warn
a. the manuf knew or should have known about the hazard, and
b. failed to take precautions in marketing the product to warn users or consumers about the hazard
c. not only must the manuf discover the hazard, but the warning given must be adequate to inform the public about the danger
d. triggering the duty to warn:
1. if the danger is obvious or well known to the public there is no reason to warn
2. warnings are required for hidden dangers such as the possibility of allergic reactions
3. warnings are required where necessary for safe and proper use of the product
4. warnings are necessary for reasons of personal autonomy and consent when dealing with the risks of prescription drugs and similar beneficial but risky products
e. Read and Heed
1. plaintiff is usually given the benefit of a presumption that a proper warning would have been read and heeded and thus the accident would have been avoided
2. the presumption is rebuttable, ex. By showing the plaintiff ignored other warnings that were provided
f. The warning must be:
1. available to the actual user
2. understandable to the actual user
3. sufficiently prominent to attract users notice
4. sufficiently urgent given the gravity of the risk
8. Other defendants
a. If consumer does not have any recourse they may go after the retailer who had nothing to do with the products quality or safety, the retailer can then sue the manufacturer
1. this will make the retailers deal with reputable suppliers
2. 402a says anyone who sells a product in a defective condition is liable
b. sellers of used goods
1. Consider: goal of compensation, goal of loss spreading, ability to pressure the manuf to improve safety, ability to take steps to assure greater safety, ability of the innocent seller to obtain indemnity from the manuf
c. R3T Seller of used products is liable:
1. when negligent
2. for a manuf defect if marketing would lead consumer to expect product was as safe as new
3. where seller manufactures the product
4. where product violates a safety statute or regulation applicable to the used product
d. lessors of chattels get same considerations as sellers of used goods
e. provider of services
1. people that provide services are not covered by SL even though they may use a product to perform the services
2. professional services or sale of goods?
a.