Professor Percy
Spring 2002
Intentional Torts
Intent
Battery
Assault
False Imprisonment
Damages
Intentional Infliction of Emotional Distress

INTENT
 desire to bring about result which will harm interest of another
 key to all intentional torts

2 types:
 actual intent – intent to cause actual harm
 presumed intent – intent to do, act with substantial certainty that harm will occur

Proof of actual intent
 Don’t have to prove (usually) the actual result (specific harm)

Have to prove D intended offensive/harmful result

It is the intent to act, not the intent to harm, that is critical in determining whether there is an intentional tort

Proof of presumed intent
 must show D knew with substantial certainty that harm would occur

Minors

Children can have the intent to be liable for intentional tort

Must prove child knew with substantial certainty that harm would occur

Negligent v. Intentional Torts

SOL shorter for intentional torts

1 yr. MS for assault & batter
 3 yrs for negligence

Prove substantial certainty of harm or intent to harm (intentional) – not foreseeable risk of harm (negligent)

Punitive damages are easier to get with intentional torts

Insurance policies usually exclude coverage for intentional torts

Comparative negligence available in negligence cases – NOT with intentional tort cases

Employer/employee – harder to prove vicarious liability for intentional torts

NO Exceptions for:
1


Mistake as to property or person

Still liable

Examples
 Cutting down someone else’s trees

Shooting a domestic dog when you intended to shoot a wolf

Intoxication – intent still exists

Insane person

Can still be held liable

Intent still exists – universal to most juris.
 Standard applies even if person’s acts are uncontrollable

Can be liable even if medical evidence introduced
 UNLESS – person is insane to point he can’t form requisite intent

Some Juris. have exceptions that prevent employees in psychiatric hospitals from filing intentional I/T (intentional torts) claims b/c they assumed risk by working there

Doctrine of Transferred Intent (Mistake)

If D held necessary intent to injure one person (A) and injures another (B), he will be held to have committed intentional tort against B (any other person who happens to be injured)

Doctrine applies to assault, batter, false imprisonment
 Examples

Intended to shoot A, shoot B - B can sue for I/T

Talmage v. Smith - Δ threw stick and hit Π, a kid who happened to be standing next the kid on Δ’s roof Δ was aiming at

4 Intentional Torts:
 battery
 assault
 false imprisonment (F/I)
 intentional infliction of emotional distress (IIED)

NO contributory negligence with intentional tort

Types of damages:

Compensatory - pecuniary/actual

Punitive - if you can show outrageous conduct

Nominal – even if no pecuniary damages

BATTERY

Intentional infliction of harmful or offensive bodily contact

Contact can be either:

Harmful OR

Offensive

Restatement 2 nd Torts §13
2


An actor is subject to liability to another for battery if:
(a) He acts intending to cause a harmful or offensive contact with the person of the other or a 3 rd
person or an imminent apprehension of such a contact and
(b) A harmful contact with the person of the other directly or indirectly results

Battery extends to:

Personal effects
 Even if there is no physical contact with person’s body – as long as there is harmful or offensive contact with something attached to or closely identified with the person’s body, battery extends

Examples
 Contact with person’s clothing
 Contact with object in person’s hand –
Fisher v. Carrousel Motor Hotel
[white Δ snatched plate from black Π’s hands]
 Putting harmful pill into someone’s drink

Unforeseen consequences
 Once est. that D intended to commit harmful or offensive contact – D liable for any consequences which ensue (Doctrine of T/I)

Example

Golfer throws golf club at caddy, hits a bystander

Golfer is liable

Standards

Normally a reasonably prudent person standard (RRP) to determine what is offensive

Not whether particular P found it offensive but whether a RPP offended UNLESS

You are aware of a person’s hypersensitivity, battery could be argued though a RP wouldn’t have found it offensive

Children

What if 6y/0 boy knocks girl down?

Girl develops permanent scars?
 Must look to boy’s intent

If he intended to push her down – he’s liable even though he may NOT have intended harm

Current Awareness
 Victim doesn’t have to be aware of contact at time it occurs for it to be battery

Public policy reason to deter poor conduct

Example o Dentist who attacks patient while she’s under anesthesia

Battery – Examples
 note case – doorman kicking car. Is this battery? No
 spitting in someone’s face. Is this battery? Yes. It’s offensive – RPP would find it offensive
3

 sexual harassment – if there’s contact it may be a battery
 tap on shoulder to ask for directions – it wouldn’t be a battery with a normal person, even if it’s an extremely sensitive person who fears being touched it wouldn’t be a battery
 mortician prepares a body and later finds out person had AIDS. Is it battery? There would be an intent problem (hospital didn’t intend for this to happen) plus there’s no certainty he was exposed to AIDS – didn’t develop AIDS so no harmful contact occurred.
 blowing smoke in someone’s face is battery when the person was allergic and defendant knew this.
 note 4 p. 34 – A is standing with his arm around B’s shoulder, and leaning on him. C, passing by, violently jerks B’s arm, as a result of which A falls down. C could be liable to
A with transferred intent.

putting Nair in someone’s shampoo bottle. Is this battery? Yes.
 pat another lawyer on the back after a case. Is this battery? No.

girl kisses her boyfriend at school and caused his head to hit a locker. Is this battery?
No. the girl didn’t mean it to be offensive – thus no intent

ASSAULT

The intentional causing of apprehension of harmful or offensive contact

Same as battery BUT NO ACTUAL CONTACT required

Intent

D must have either

Intended to cause the apprehension of contact (thus intent to frighten = intent) OR

Intended to cause the contact itself

Elements

Threatened contact AND

Apparent ability to carry out contact

Does Not have to be actual ability – just apparent

Example - Someone points gun at you that is NOT loaded – it is still assault

RPP must believe apparent ability to assault exists AND

Apprehension or anticipation of contact – immediate threat

P must be aware of contact and there must be an immediate threat o Example – if you say “watch out, there’s a snake” but there is NO snake and person runs into a wall, injuring himself = ASSAULT
 P doesn’t have to be apprehensive fearful – just have to anticipate contact o Example – petite girl says she’s going to slap pro wrestler o Western Union Telegraph v. Hill [Δ tired to grab Π but the dimensions of the counter made grabbing impossible]
 P must be aware of what is occurring at time of assault (must prove he’s aware) – unlike battery

Threats/Words
4


Mere words w/o physical harm is NOT an assault – must be accompanied by some
OVERT ACT

What words alone can cause immediate apprehension? see Restatements for examples

MS case

Man handcuffed
 Other man says “Let’s see if he can swim in the river while he’s handcuffed.”

Holding??

Threats

If someone says he’s going to kill you next week – NO ASSAULT
 Apprehension has to be immediate – CANNOT be future


Difference between Assault & Battery

Battery – MUST be ACTUAL CONTACT

Assault – NO ACTUAL CONTACT necessary

FALSE IMPRISONMENT

Intentional infliction of confinement;

Direct restraint of physical liberty of one person by another w/o legal justification

Elements

Actor subject to liability if he acts:
1.
intending to confine
2.
must actually confine – through force or threat of force
3.
P must be aware of confinement (Majority & Restatements)
 some juris. allow injury to replace element of awareness.

Restatements – no liability unless person knows of confinement or is harmed by it

Exception to Awareness

DOES NOT mean P has to remember confinement – only that he was aware of it at time it occurred

Parvi v. City of Kingston - drunk taken to an abandoned golf course by police to sleep it off

Shoplifting

Suspected shoplifting interrogations often fall into this category

Must be ACTUAL confinement either through force or threat of force

If person is free to leave NO F/I

Example: Hardy v. Labelle’s Distributing [Π stayed to clear her name after being accused of shoplifting]

General Rules

If P can leave the room and does so – NO F/I

If there is a reasonable means of escape – NO F/I
5


If P remains voluntarily and does not try to leave when there is reasonable means of escape – NO F/I

Refusing to permit someone to enter is NOT F/I

F/I CANNOT be future
 Taking someone’s clothes (who’s in pool) = F/I b/c you denies them escape

Reasonable Means of Escape – means of escape is NOT reasonable if:

P does NOT know of its existence

It is NOT apparent

It involves exposure of victim

Material harm to clothing???

Danger of substantial harm to another

Liability Escape

D is NOT liable for an unreasonable escape

If person is confined and attempts escape and is injured, the escape must be a reasonable act for D to be liable

Examples

Jumping out of car = reasonable act

Jumping off 10 th
floor = unreasonable act

F/I in a car

Defenses

Psychiatrist says person should be committed but is wrong – not F/I – but might be med mal

Conviction of a crime for which one is specifically arrested is a COMPLETE DEFENSE to subsequent claim of F/I

INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS (IIED)

Restatements definition – one who by extreme or outrageous conduct intentionally or recklessly causes severe emotional distress to another is liable for:
(a) The emotional distress AND
(b) Bodily harm resulting from distress

Still liable even in absence of physical harm

Most juris. say you must show INTENT

Elements – P may recover if he can show:

D either intended to cause IIED OR

D knew with substantial certainty it would occur OR

D acted recklessly

Some juris. allow reckless conduct as a substitute for intent

Intent can be general or specific

Determining what is Extreme/Outrageous

Would average member of community think it outrageous?
6


Would it cause RP emotional distress?
 Extreme and outrageous conduct CANNOT just be insulting or hurt P’s feelings

Known hypersensitivity is sometimes taken into consideration by courts

Transferred Intent

NOT usually allowed

Rationale – opens the door for too much litigation

Restatements view – T/I can be used for relatives who witness harm to a family member

Restatements view - To recover for IIED anyone other than family member must show actual harm

Majority of cases allowing family bystander to recover are not as liberal as Restatement view – say D must prove:

Knew bystander was observing

Intended or was reasonably certain his act would cause IIED on bystander

Taylor v. Vallelunga [Π witnessed a physical attack upon her father by Δ and as a result suffered mental anguish]

Physical Harm

Bodily harm usually not required

D can be held liable, though, for physical injury if there is one

Some juris. require physical symptoms

MS does NOT – emotional distress must only be foreseeable in MS

Common Courtesy Rule

Common carriers, innkeepers, restaraunt owners, etc. can be held liable for insults by employee of customer

Insults

Difficult to tell where courts draw the line w/ insults
 Usually courts don’t get involved in situations where words are exchanged and it may not cause RPP emotional damage
 Examples where courts typically won’t get involved??

Debt collection

Broken off wedding plans

Cheerleaders watched while changing

Ugly bride radio contest

Alienation of Affection – MS still recognizes alienation of affection as a tort
Intentional Torts Dealing with Property
Trespass to Land
Trespass to Chattels
Conversion

TRESPASS TO LAND
7


Difference between trespass to land/nuisance:

Trespass – intrusion that interferes w/right to exclusive possession

Nuisance – intrusion that interferes w/ right to enjoy property

Two Types:
1.
intentional
 D knows he’s on someone else’s property w/o legal right
 Don’t have to prove actual damages

Only need to prove D voluntarily/intentionally entered your property
2.
negligent
 accident or mistake leads to entry
 must prove actual damages to recover

Actual damages = market value or depreciation of value

General Rules

Once trespass is est. – liable for virtually all consequences of trespass

Person CANNOT trespass on your property even if you are renting b/c you’re the occupier of the land

Even if trespasser has good intentions – technically it’s still a trespass

Example – neighbor spraining to get rid or pin beetles accidentally sprays your land

Example - American Smelting Π brought an action for trespass against Δ, arguing that his property had been damaged by the gasses and particulate matter being emitted by Δ’s plant

In order to sustain a cause of action for trespass to land, one must establish that he has suffered actual and substantial damages . {When particulate emissions are involved, if the interference is transitory and quickly dissipated, the interference constitutes a nuisance. Where the particles are accumulated on the land, however, then a trespass has occurred. The particulate accumulation constitutes the actual and substantial damages necessary to sustain the action – Trespass requires a physical incursion of the land by some tangible mass, whereas the nuisance theory only requires an interference with one’s enjoyment or use of the land. In a trespass action, the socially beneficial or useful nature of Δ’s action is not relevant to whether a trespass has occurred}

Trespass Above the Land
 c/l rule – owner owned all above and below the land
 changed by US v. Causby
 Restatements § 159 – air travel is a trespass only if it “enters into immediate reaches of the air space next to the land and interferes substantially with the others use and enjoyment of land”

Herrin v. Sutherland [while hunting, Δ fired shots over the property and possessions of
Π] - this is a trespass above the land

Trespass Below the Land
8

 You can trespass under someone’s land too

See note case #9, p. 69 – involved trespass by allowing tourists to tour cave under someone’s land

TRESPASS TO CHATTELS
 Restatements § 217 – tort against personal property

Difference in trespass to real property/personal property – w/ personal property must show actual damages

Rarely used in modern tort law

But used in Compu Serve – junk email case

Proof

General or specific intent AND
 Intermeddling (intentionally bringing about physical contact with chattel) w/ another’s property OR
 Intention disposal of one’s chattel

Mistake about ownership of property is NOT a defense

Damages

Usually must show damage to property OR

Owner must be deprived of chattel for substantial amount of time OR
 Damages don’t have to be foreseeable – example of P being allowed to recover for bodily harm to P when D trespasses?

Nominal damages not allowed here

If deprived for a substantial amount of time damages = cost of substitute

If deprived permanently damages = cost of replacement

CONVERSION
 Occurs when D so substantially interferes with P’s possession or ownership of property that it is fair for D to pay property’s full market value

In other words - D has taken your property and you seek damages for full market value

Closely related to trespass to chattel – when does it become conversion?? See note case examples p. 81

Example - Pearson v. Dodd [former employees of Π secretly and without authority removed documents from Π’s files, copied and replaced them, and turned the copies over to Δ to be published]

The publication of information which does not amount to literary property, scientific invention, or secret plans formatted for the conduct of commerce, without an actual physical conversion of the documents containing the information, does not amount to conversion

Ways to convert Chattel

Most actions brought for conversion involve settling title to disputed goods

Stealing it

Severely damaging or altering it

Using it (even if you had permission) in a way that exceeds authorization/permission
9


Receiving it – stolen goods

Disposing of it – wrongfully selling it

Misdelivery

Refusing to surrender it

Damages

P entitled to full market value of property D converted

Who may maintain action?

Anyone in possession at time of conversion – does NOT have to be owner

Anyone w/ right of possession – does NOT have to be owner

Return of Chattel

Majority view – owner DOES NOT have to accept chattel back from converter

Owner can say D bought chattel and demand full market value
Privileges (Defenses to Intentional Torts)
Consent
Self Defense
Defense of Others
Defense of Property
Recovery/Recapture of Property
Necessity
Other Privileges

CONSENT

Willingness in fact that an act or an invasion of interest may take place

Two Types of Consent:

Express

Signing a waiver

Verbal consent
 Examples

Wrestler signing a release form

Immigrant vaccination case

Implied
 If P’s behavior indicates consent, unexpressed feelings do NOT matter
 D is guided by P’s acts
 Determined by if it was reasonable for D to view P’s acts as consent

Illegal Activity

Majority
 Consent to an illegal activity is not valid consent

Public policy – created law to protect public (reasoning)

Minority
10

 allow consent to an illegal activity (only a few juris.)

Restatements also adopt this view

Medical

No consent needed if patient in life-threatening/emergency situation

Otherwise – must have consent

MS – if these conditions don’t exist or RPP would not have consented, then battery charges can be brought

Fraud

Consent CANNOT be obtained by deceit or fraud

Benefit does NOT constitute fraud but may be a factor in damages – example – ear doctor case

Sports

Players consent to those types of contacts which are legal under rules of game

Players DO NOT consent to intentional contact which is illegal under rules

Consent as a Defense

Majority – D has to raise consent as defense to intentional tort and D then has burden of proof

Minority – lack of consent is an element of battery P must prove

SELF DEFENSE

Existence of Privilege

Anyone is privileged to use reasonable force to defend himself against threatened battery
(this defense most relevant to BATTERY)

Deadly force – to justify must have:

Threat of deadly force

Threat of serious bodily force

Retaliation

Privilege is one of defense, NOT retaliation

When battery no longer threatened, the privilege terminates

Provocation

Almost all courts hold insults, verbal threats or foul language do NOT justify self-defense

Exception – reasonable belief based on P’s reputation like with the gunfighter case

Amount of Force/Disparities - privilege limited to amount of force that is reasonably necessary for protection

Injury to 3 rd Party

Privilege of self-defense carried over and D is not liable to 3 rd
person as long as he was acting reasonably

Thus – NO transferred intent
11


Mistake does NOT negate self-defense as long as you acted reasonably

DEFENSE OF OTHERS

Privilege similar to self-defense is recognized for defense of others

Reasonable Force

Same reasonable inquiry as w/ self-defense

Allowed to protect others

Father defending child against bully – pushing bully out of way is allowed

Father shooting the bully is not b/c unreasonable force

CANNOT use deadly force UNLESS deadly force is threatened

Reasonable Mistake

Some juris. – liable if you defend aggressor

Other juris. – follow Restatements which says mistake is a valid defense as long as it was a reasonable mistake

Other juris. – require asking aggressor to cease and desist unless that would be a futile attempt

DEFENSE OF PROPERTY

Usually a defense to a BATTERY claim

General rule – NO PRIVELEGE to use force intended or likely to cause death or serious harm UNLESS the intrusion threatens death or serious harm to occupants

Valid defense to protect home/family if reasonable force – deadly force inquiry same as w/ self-defense

Katko v. Briney [in order to protect an uninhabited house from unwanted intruders, Δ installed a man-killing mechanical device set to fire upon the opening of a door]

General rule from this case - NO deadly force to protect UNOCCUPIED property

Mistake

Person w/ legal right comes onto unoccupied property and owner believes his purpose it to harm family

NO MATTER how REASONABE the force – MISTAKE NEGATES the defense

RECOVERY/RECAPTURE OF PROPERTY

Legitimate property owner can use reasonable force to recover property when:

Force is reasonable – CANNOT be deadly force

Must be fresh pursuit b/c passage of time causes one to act more irrationally??

Finance company can repossess property as long as no breach of the peace – no force may be used - law in MS

If you sign K saying reasonable force may be used to repossess property and you stop paying
– you’ve given valid consent for repossession BUT may be void against public policy

Recovery – Shoplifting

Majority – can detain/restrain if customer still in parking lot/vicinity

Minority – can only detain/restrain if customer is still in store
12

 Shopkeeper’s Privilege – privilege to detain customer for investigation of shopkeeper has reason to suspect customer stole goods

Limitations on privilege:

Limited to store or immediate vicinity

Must have reasonable belief – can then only restrain for reasonable amount of time

Method of restraint will also be looked at

NECESSITY

Usually a defense:

Trespass

Conversion

Trespass to chattels

Public Necessity

Right to destroy property is justified if done to prevent a disaster and is done in good faith belief that it is necessary (done for public good)

W/ public necessity – no compensation UNLESS local statute says otherwise

Private Necessity
 Necessity of avoiding destruction or damage to one’s property gives rise to privilege to invade property of another

This is limited to entry and compensation must be made

OTHER PRIVELEGES

Authority of Law Defense

Can arise for police

Look at whether or not they had warrant

Did police use excessive force

Were police reasonable

Discipline

Not many parent/child suits – b/c most often children can’t sue parent

Teachers

Have privilege of discipline defense

Varies from school district to school district

Majority – prohibit corporal punishment

Military
– can use privilege of discipline

Justification

Catch all defense

No bright line rules
Strict Liability generally
Animals
Abnormally Dangerous Activities
Products Liability
Theories of Recovery
13

Types of Defects
Restatements 2 nd and 3 rd
MS Products Liability MCA § 11-1-63
Defenses
Liability of Sellers of Used Products

Strict liability (s/l) – liability for all injuries proximately caused by party’s conduction of certain inherently dangerous activities w/o regard to negligence

Indication of strict liability – D is made to pay damages despite the fact that he neither:

Intentionally injured P or

Negligently injured P
 Don’t have to prove either of the above

If it could be avoided w/ reasonable care, then negligence applies, not s/l

Judge determines if activity subject to s/l, then jury only decides causation

ANI MALS

Barnyard Animals – 3 Theories:

English rule – owner s/l for any damage done by animal

Fencing-out rule – if owner of land has properly fenced it, then owner of trespassing animal s/l for any dameges if animal broke through fence – popular theory in areas like the West

Fencing-in rule – owner of animals required to keep them fenced in and s/l for any damage escaping animal does – popular in areas where there are less animals

Domesticated Animals

Not total s/l

If owner has some scienter (knowledge) that animal has dangerous tendencies
(1) whether dog has bitten someone before or not –owner is s/l for injury by animal
(2) DO NOT have to prove/show previous attack
(3) DO NOT have to show owner was negligent in letting dog lose

Can bring suit under either:

Negligence – owner negligent in not fencing animal in

Strict liability – violent tendencies of animal

One claim does NOT prevent the other – but you CANNOT collect damages twice

Wild Animals
 If person is keeping “wild” animals, he is s/l for any injury animal does

Public policy reason – since they are not common – don’t know what to expect from them

What is considered wild is defined by location

ABNORMALLY DANGEROUS ACTIVITES

Term of 1 st Restatements is “ ultrahazardous”
14


Term of 2 nd Restatements is “ abnormally dangerous”

Most courts have adopted the view from Rylands , also adopted by the Restatements

Restatement 2 nd § 520 - Factors in determining whether activity was abnormally dangerous
(1) great risk of harm – is there a high degree of risk/harm
(2) if harm results – will it be great
(3) can risk be avoided eliminated by reasonable care?
(4) extent to which it is common/uncommon activity – the more uncommon, more likely s/l will apply
(5) was it inappropriate to location?
(6) does benefit outweigh dangerous harm to community?

Rule from Rylands v. Fletcher [The water from the reservoir Δ built on Δ’s land escaped through an abandoned coal mine shaft and flooded an adjoining mine owned by Π]:

A person who for his own purposes
(1) Brings, collects and keeps on his land anything that is likely to do mischief if it escapes
(2) Must keep it at his peril AND
(3) A person using his land for a dangerous, non-natural use is strictly liable for any damage to another’s property resulting from such non-natural use.

DOES NOT matter if D is at fault

In determining if it is a non-natural/unnatural use, courts look to the following factors:
 place where the activity occurs
 the customs of the community
 the natural fitness or adaptation of the premises for the purpose

Types of Activities held to be abnormally dangerous – thus strict liablity:

Blasting

Toxic chemical stored in urban areas – but manufacturer not liable for spill during transport – Indiana Harbor case

Crop dusting – NOT in MS – requires negligence

Poisonous gases

Rockets

Fireworks display

Hazardous waste disposal

Oil wells

Limitations on strict liability in Abnormally Dangerous Activities:

Recovery on the basis of s/l is limited to injury (kind of harm) resulting from that which makes activity abnormally dangerous

This limitation placed on all types of s/l (listed above)

Person conducting activity NOT liable for every extreme harm it might cause – example
– chemical manufacturer not liable for spill during transport
 Law DOES NOT impute s/l to protect against harms incident to P’s extraordinary unusual use of land – unusual/unnatural use defined as something most people wouldn’t do with/use their property for.
15


Assumption of risk is a defense

Comparative negligence is not

PRODUCTS LIABILITY

Umbrella term for the liability of a manufacturer, seller or other supplier of chattel to one w/ whom he is no in privity of K who suffers harm caused by chattel

THREE THEORIES OF RECOVERY IN PRODUCTS LIABILITY:

Negligence

Manufacture

Design

Failure to warn

Must show reasonable manufacturer would have designed product differently to prevent harm

Early problem w/ negligence products liability was privity requirement

Cardozo got rid of privity requirement in McPherson v. Buick (1916) for public policy reason – if you’re producing something posing a danger, you should be liable

Warranty

Quasi K/quasi tort

Express warranty

Should be held to K

Implied:

More of a TORT idea

Use of this has decreased b/c looks like s/l when no privity exists
 UCC § 2-314 – implied warranty of merchantability
 UCC § 2-315 – fitness (implied warranty that goods are fit for a particular purpose) – warranty that goods are merchantable is implied in K for sale if seller is merchant w/ respect to goods of that kind

MS has adopted the UCC with regard to these

Privity of K w/ regard to warranty

Courts say no privity requirement

Later adopted by UCC

Horizontal privity – scope of how far privity extends – husband/wife

Vertical – varies from juris. to juris. – from car dealer to buyer

Strict Liability
 First arose in the 1960’s – new cause of action arose in landmark case
Greenman v. Yuba (1963)

Breech of express warranty

UCC had notice requirement

Court held – didn’t care about notice w/ warranty claim
16

 Court said warranty bogus b/c it requires P’s to give notice – most consumers don’t know they need to notify

Adopted in Restatement 2 nd
of Torts § 402(A) to reflect case law

Justification/reasoning for strict liability (products):

Manufacturer in best position to buy liability insurance – pass cost on to consumer

More efficient – avoiding multiplicity of suites, i.e., suing retailer, then manufacturer, etc.

Usually bring products liability claims under all three theories – definitely under negligence and s/l and would bring under warranty if you had a claim there as well
 Strict liability makes it easier for P to recover b/c w/ negligence it’s difficult to find proof

STRICT PRODUCTS LIABILITY – 3 TYPES OF CLAIMS:
1.
Manufacturer defect – one defective product
2. Design defect – design is poor (all products are defective)
3. Insufficient warnings or instructions – Failure to Warn
Design defect and failure to warn are often used together. Both of these claims can also be brought under a negligence claim.
 § 402A of the Restatement 2 nd has been adopted by most jurisdictions including
Mississippi. 402A is the basis for strict liability. The Restatement 3 rd came out in 2001 and somewhat changed 402 A.
 § 402A
(1) One who sells (manufacturer or retailer) any product in defective condition unreasonably dangerous to user or consumer (who can recover) or to his property is subject to liability for physical harm caused to user or consumer if:
(a) Seller is engaged in business of selling such a product AND
(b) It is expected to and does reach users or consumer w/o substantial change in condition it was sold
(2) The rules of sub section 1 applies although
(a) Seller exercised all possible care in the preparation and sale of his product AND
(b) User or consumer has not bought product from or entered into any contractual relation w/ seller

Under 402A – (what to prove) - you can sue anyone
 who sells a product in a defective condition
 This includes retailers or manufacturers. (It cannot be an individual. Example:
Someone sells you a tractor.)
 that’s unreasonably dangerous
 defect caused your harm
 It can be a user or consumer (so it doesn’t have to be the purchaser)

Product cannot have been modified.

Problems w/ 402A
17


Can bystander recover? Addressed case by case in juris.

Definition itself

Can you still bring breach of express warranty w/ s/l?

Some juris. – yes
 Other’s – no – s/l replaces express warranty

RESTATEMENT 3 RD OF TORTS – PRODUCTS LIABILITY

Major significances per Percy:

Treats each type of defect separately

Addresses problems of 402A
§ 1 Liability of Commercial Seller or Distributor for Harm Caused by Defective
Products
One engaged in the business of selling or otherwise distributing products who sells or distributes a defective product is subject to liability for harm to persons or property caused by the defect.

Significance of
§ 1 per Percy

Still have to be in business of selling

Limited to person or property damage – not economic loss
§ 2 Categories of Product Defect
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 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.

Significance of
§ 2 per Percy

Sets out 3 types of defects and what to prove

Design defect – must prove foreseeable risk

Like MS – going to be a fault based standard??

Could have been cured
§ 3 Circumstantial Evidence Supporting Inference of Product Defect
It may be inferred that the harm sustained by the plaintiff was caused by a product defect existing at the time of sale or distribution, without proof of a specific defect, when the incident that harmed the plaintiff:
18

(a) was of a kind that ordinarily occurs as a result of product defect; and
(b) was not, in the particular case, solely the result of causes other than product defect existing at the time of sale or distribution.

Significance of
§ 3 per Percy

Sets out RIL standard

Example – flying blender glass case
§ 4 Noncompliance and Compliance with Product Safety Statutes or Regulations
In connection with liability for defective design or inadequate instructions or warnings:
(a) a product's noncompliance with an applicable product safety statute or administrative regulation renders the product defective with respect to the risks sought to be reduced by the statute or regulation; and
(b) a product's compliance with an applicable product safety statute or administrative regulation is properly considered in determining whether the product is defective with respect to the risks sought to be reduced by the statute or regulation, but such compliance does not preclude as a matter of law a finding of product defect.

Significance of
§ 4 per Percy - Sets out defective per se argument
§ 5 Liability of Commercial Seller or Distributor of Product Components for Harm
Caused by Products Into Which Components Are Integrated
One engaged in the business of selling or otherwise distributing product components who sells or distributes a component is subject to liability for harm to persons or property caused by a product into which the component is integrated if:
(a) the component is defective in itself, as defined in this Chapter, and the defect causes the harm; or
(b)(1) the seller or distributor of the component substantially participates in the integration of the component into the design of the product; and
(2) the integration of the component causes the product to be defective, as defined in this
Chapter; and
(3) the defect in the product causes the harm.

Significance of
§ 5 per Percy – component part manufacturers – liable if part is defective
§ 6 Liability of Commercial Seller or Distributor for Harm Caused by Defective
Prescription Drugs and Medical Devices
(a) A manufacturer of a prescription drug or medical device who sells or otherwise distributes a defective drug or medical device is subject to liability for harm to persons caused by the defect. A prescription drug or medical device is one that may be legally sold or otherwise distributed only pursuant to a health-care provider's prescription.
19

(b) For purposes of liability under Subsection (a), a prescription drug or medical device is defective if at the time of sale or other distribution the drug or medical device:
(1) contains a manufacturing defect as defined in § 2(a); or
(2) is not reasonably safe due to defective design as defined in Subsection (c); or
(3) is not reasonably safe due to inadequate instructions or warnings as defined in
Subsection (d).
(c) A prescription drug or medical device is not reasonably safe due to defective design if the foreseeable risks of harm posed by the drug or medical device are sufficiently great in relation to its foreseeable 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.
(d) A prescription drug or medical device is not reasonably safe due to inadequate instructions or warnings if reasonable instructions or warnings regarding foreseeable risks of harm are not provided to:
(1) prescribing and other health-care providers who are in a position to reduce the risks of harm in accordance with the instructions or warnings; or
(2) the patient when the manufacturer knows or has reason to know that health-care providers will not be in a position to reduce the risks of harm in accordance with the instructions or warnings.
(e) A retail seller or other distributor of a prescription drug or medical device is subject to liability for harm caused by the drug or device if:
(1) at the time of sale or other distribution the drug or medical device contains a manufacturing defect as defined in § 2(a); or
(2) at or before the time of sale or other distribution of the drug or medical device the retail seller or other distributor fails to exercise reasonable care and such failure causes harm to persons.

Significance of § 6 per Percy

(a) is general information on prescription drug/medical device claims

(b) lays out different types of claims and how to prove claims
 learned intermediary provision
 retailer specifics

Significance of
§ 10 per Percy = post sale duty to warn – factors to determine if it existed
 § 10 Liability of Commercial Product Seller or Distributor for Harm Caused by
Post-Sale Failure to Warn
(a) One engaged in the business of selling or otherwise distributing products is subject to liability for harm to persons or property caused by the seller's failure to provide a warning after the time of sale or distribution of a product if a reasonable person in the seller's position would provide such a warning.
20







(b) A reasonable person in the seller's position would provide a warning after the time of sale if:
(1) the seller knows or reasonably should know that the product poses a substantial risk of harm to persons or property; and
(2) those to whom a warning might be provided can be identified and can reasonably be assumed to be unaware of the risk of harm; and
(3) a warning can be effectively communicated to and acted on by those to whom a warning might be provided; and
(4) the risk of harm is sufficiently great to justify the burden of providing a warning.
PRODUCT DEFECTS – MANUFACTURING
Something wrong w/ this particular product
P bears burden of proof
Proving above is easy
Proving product in same condition – difficult
Thus P’s often bring manufacturing defect + design defect claim

PRODUCT DEFECT – DESIGN

Product manufactured in accordance w/ particular design which is inherently flawed as to present unreasonable risk of injury

Majority – uses negligence test for design defects but retain s/l for manufacturing defects

Most juris. allow alternative claims

Why courts hesitant to extend s/l in design defects? Ford/Firestone example

Alternative feasible design – most courts require P to prove that an alternative feasible design existed at time product was made in order to prove design defect

Minimum standards

Federal regulations and industry standards are just minimum standards

Jury can still find design was defective despite fact that it met minimum standards

Tests for Design Defect:

Risk Utility Test

Based upon negligence type principles

Glorified negligence/Hand test
 Key factor is reasonableness of manufacturer’s conduct in placing product on market

Risk utility at time product was mad/manufactured

MS adopted Risk Utility test in Sperry-New Holland v. Presley (1993):

Adopted specifically for design defect cases

Distinguished between negligence test and risk utility

MS SC said use negligence in design defect

Use s/l in manufacturer defect
21


Elements of Risk Utility Test
 Usefulness of product (utility to both user & society)
 Risk of injury


Seriousness of injury risked
Existence of other safer products


Safer design alternatives available w/o impairing utility
P’s ability to avoid injury w/ reasonable care


Obviousness of risk
Spreading of risk by raising price

Consumer Expectations Test:
 s/l test

Comes from comment (i) of Restatements – dangerous if danger more than reasonable consumer would expect

PRODUCT DEFECT – WARNING

Does warning automatically cure defect?

Jury can consider factor of warning
 but still NOT complete defense

General rule – duty to warn ONLY applies to dangers that were known or knowable at time product was made

State of the art – best within industry at time product was made based on information/technology available within industry at that time

P must prove that there was either:

A safer way to make the product (defective design) OR

Information about the dangerous characteristics was available at time product was made
(warning defect)

Open & obvious defense – most juris. hold there is no duty to warn of open and obvious dangers

Sophisticated user defense – exemplified by plastic pipes case

Plastic pipes used by employees for installing pipes – gas lines

Workers knew how to ground pipe – pipe blew up – brought suit

They had more knowledge than average user as to how to use pipe – thus defense to warning defect claim against pipe manufacturer

Learned Intermediary Rule

Doctrine applied in most juris.

Someone between manufacturer and consumer who is responsible for passing on warning

In case of drug – manufacturer only has duty to warn prescribing physician of possible dangers and side effects
 Doc’s defense – now drugs are marketed directly to public

Exception to learned intermediary – mass vaccinations – manufacturer has duty to warn patients through signs, handouts, inserts, etc.
22


Post sale duty to warn

Some states impose duty on manufacturer to provide post-sale warnings about dangers discovered AFTER product was sold

Factor test used to determine burden on manufacturer to warn

Failure to recall claim – if recall mandated and not done

Negligent recall claim

Recall done but done poorly

Analogous to duty to rescue
 This is why many manufacturers won’t recall unless forced to do so by government

Proof of defect

RIL argument??

Evidentiary rule

CANNOT use subsequent remedial measure
 i.e., manufacturer can’t attach warning/safety device post accident and say they warned UNLESS
 no other way to make them safer – then used to show feasibility

Negligence per se

P can argue negligence per se assuming statute/regulation was geared to protect against injury caused

Treated as that particular juris. treats it w/ negligence

Confidential settlement claims

Protective orders – prohibit you from s haring all you learn during discovery

Example - Firestone cases – there will be many more cases – so one involved
CANNOT share what he learned

Inherently Dangerous Products
 what is the duty to warn with tobacco, food (oysters), etc.?
 use Learned Hand type test on food

B < P x L – is burden (cost of prevention) less than likelihood of harm X gravity of harm?

MCA 11-1-63 – MS PRODUCTS LIABILITY STATUTE (from Percy’s slides)
1. Elements of a claim (must prove): product was defective when sold by manufacturer or seller
 Must show product hasn’t been altered in any way – was defective when sold

RIL could be important here – b/c normally that type of injury wouldn’t occur w/o defective product

Per se argument if possible defect rendered the product unreasonably dangerous – how to prove???
23


Would reasonable consumer have thought product (knowing its true characeteristices) to be unreasonably dangerous in the defective condition?? Does MS use this – called viewpoint of the consumer in E’s defect proximately caused the damages

May have to rebut intervening causes here (related to P or 3 rd
party) – not superseding if risk is foreseeable or if unforeseeable and caused the sam type of damage that makes product dangerous

May have to rebut misues or other comparative negligence

May have to rebut other defenses here such as assumption of risk, open and obvious danger
2. Types of Defects: manufacturer design inadequate warning or instructions breach of warranty
3. Manufacturer Defect (way to prove): product deviated from specs or other units manufactured to the same specs
4. Inadequate warnings and instructions (must prove):
-at the time manuf or seller sold the product, the manuf knew or should have known of the danger – can D use state of the art as defense???
-ordinary user/consumer didn’t know of the danger
-reasonable manuf or seller would have given warning/instructions
5. Design Defect:
-at the time the product was sold, manufacturer or seller knew or should have known of the danger
-product failed to function as expected
-feasible design alternative would have prevented the harm without impairing utility – can D use state of the art as defense to prove no feasible design alternative?? Do you need to look at all risk utility factors since MS SC did??
6. Breach of Warranty:
-product breached an express warranty
-product failed to conform to express factual representations justifiably relied upon by the claimant in electing to use the product
7. Defenses:
-comparative negligence of P – MS SC has said is a defense
-fault of all other tortfeasors unless immune
-assumption of risk (all types of claims)
-open and obvious danger (warnings claims)
8. Assumption of Risk:
24

-P had knowledge of a condition of the product that was inconsistent with his safety
-p appreciated the danger
-p deliberately and voluntarily exposed himself to the danger
9. Open and Obvious:
-danger is or should have been open and obvious to user or consumer taking into consideration common knowledge of people who ordinarily use the product
-defense to warnings claims only
10. Learned intermediary:
-adequate Rx drug warning is on that a reasonable manuf would have given taking into account the common knowledge of a physician who prescribes the drug
11. Indemnity:
-retailer entitled to indemnity from manuf if retailer didn’t alter (see sealed container doctrine) or modify product in material manner and didn’t exercise control over design, packaging, or warning
- notification requirement
-can recover damages, costs, and attorneys fees

Misuse as a defense
 using product for something it was never intended for – complete bar to recovery
 general rule – manufacturer is NOT liable for injuries resulting from abnormal or unintended use of product IF such use was NOT reasonable foreseeable – must determine if misuse was foreseeable

Most jurisdictions require proximate cause for proof of foreseeability

MS case - Ford Motor Co. v. Matthews [While standing next to his tractor manufactured by Δ, Π turned on the ignition while the tractor was in gear, the tractor started and ran over him, killing him]

Rule in MS from this case - Although misuse of a product that causes an injury is normally a bar to strict liability, a manufacturer is liable for injuries resulting from abnormal or unintended use of his product if such use was reasonably foreseeable .

Jury question as to what is reasonably foreseeable misuse

Preemption
 More prevalent argument by D’s

Comes up frequently w/ RR statutes, drugs, medical devices, employer (401K)

Based on Supremacy clause of Const.

Where Congress has stepped in and occupied an entire area of regulation, any state law in conflict with fed regulations is invalid

Thus D argues since he complied with fed. Scheme – fed. Government regulations meant to replace existing state laws

Examples of this would be with Railroads – bells, gates

2 Types of Preemption
 express – preemption clause in the federal statute ( Medtronic, Inc.
case)
25

 implied – Congress passes an act that is persuasive in an area
 then ct. must determine whether stat law was preempted

D must show conflict b/t fed. Act and state law

Federal preemption of state law is NOT the same as compliance w/ federal standards. D manufacturer can argue this as defense but different from preemption

Product Line theory
 adopted by MS in 2001
 if 2 nd
company (successor corp.) is continuation of 1 st
, and product is the same – 2 nd company is liable

Chevy purchasing Ford example

LIABILITY OF SELLERS OF USED PRODUCTS

Most juris. and Restatements limit 402A to those in business of selling, leasing and manufacture ring. 402A DOES NOT apply to used products

Products Liability Claims with Used Products – could bring:

Negligence claim

Seller had duty to reasonably inspect
 Seller was negligent in that duty

Breach of warranty claim (implied)

Example – if seller says brakes are in good shape – implied warranty

Benefit to suing local store/retailer

Keep in state court
 Don’t want in Federal court b/c Daubert rule (much stricter standard) would apply

MS rule

MS DOES NOT allow you to sue retailer unless you can prove retailer knew or should have known of defect OR

Retailer has part in assembly of product

Parker v. Ford (MS) – car dealer is NOT strictly liable for blatant defect IF it could NOT be discovered by inspection

MS also recognizes sealed container doctrine

Most juris. say retailer who did not manufacture is still help to mplied warranty of merchanibility simply by selling product.

MS and a minority of juris. recognize this doctrine – retailer who reselss a “sealed container” doesn’t warrant it
Wrongful Death
Generally
MS Statutes
Beneficiary Issues
Types of Damages
26


WRONGFUL DEATH – GENERALLY

Old common law – personal cause of action did NOT survive death of its possessor – wrongful death is a statutory creation:

Two types:

Wrongful Death

Goes to whomever is allowed to recover under statute – beneficiaries defined by statute

Damages recoverable for death

Damages include:
 Pain and suffering

Loss of society and companionship

Lost future earnings – reduced to present net value

No loss of enjoyment of life in MS

Survival

Goes to estate

These are damages deceased could have recovered if he was P

Measured from time of injury to time of death

Damages (pecuniary) include:

Survival wages - anything you would expect to receive from deceased if he hadn’t died
 Funeral expenses

Medical expenses before death

Legal expenses

Damage to deceased property

MS STATUTES

MS has a blended statute – MCA 11-7-13 – meaning that you can recover both wrongful death and survival damages under wrongful death statute

MS also has MCA 91-7-233 (survival statute)

Most states have separate wrongful death/survival statutes

Survival in MS:

Damages go to estate of deceased (whoever is listed in the will) even if not considered a beneficiary under the wrongful death statute

Must be brought by executor of estate (per 91-7-233)

Are subject to payment of debts of deceased

Wrongful Death in MS:

Definition – any that that would have given person rise to civil action if he had survived, the party who would have been liable to deceased is liable for damages

People who may bring wrongful death suit under MCA 11-7-13:

Spouse and children

Parents

Sibling

Personal representative (for estate) – i.e., legal guardian of children
27


MS statute seems to say one of the first three must be living in order for w/d action to be brought

But – personal rep. listing seems to counter that – could file if none of the listed beneficiaries are living – no precedent in MS for this

In MS can bring wrongful death action for any TORT:

Negligence
 Intentional tort

Products liability

Breach of warranty – express or implied
 Privity/fitness of foods

Wrongful death damages are NOT subject to payment of debts of deceased

BENEFICIARY ISSUES

Following all have the same rights in MS as legitimate children born in wedlock (very clearly stated in statute):

Half-bloods

Whole sister/half sister are two living beneficiaries

Both treated equally under the statute

Illegitimate children

Have wrongful death claim in event of mother’s death and vice/versa
 Father can’t recover unless paternity proven or he’s declared the natural father
 Abandoning parent – technically they can recover, but legislation introduced this session to forbid

Adopted children – can recover in event of death of natural parents

MS case – suit for wrongful death of father
 Father’s sister is alive – says child cannot prove majority of types of damages – outcome???

Other Beneficiary issues

Stepchildren

Usually not

Vice/versa – usually can’t recover for parent if haven’t been adopted

Unborn children

Most states – yes – if father dies

Reverse issue – parent claim for unborn child – most states say yes if some negligent act causes child to die

Some states limit it to viable child

Widowed spouse remarried by time suit goes to court

Relevant to loss of companionship, etc? most courts say no

Live-ins

No – b/c not a spouse

CA dog mauling case

Spouse taken off life support

MS brain death case – outcome??
28


TYPES OF DAMAGES

2 Basic Measures: (for both w/d and survival?????)

Majority rule – loss of support for beneficiaries

MS follows present net cash value of decedent as measure for adults??? Where does this fit – majority or minority???

Minority rule - loss to estate
 what he would have earned/left in estate
 minor child can’t recover as much in these juris. b/c can’t look at loss of support

Greyhound – MS case (2000)

Children died – parent arguing for loses

Present net cash life expectancy OR

Consumption rate – much higher for single person than for married person w/ children

MS rule for children from this case
 Nat’l. average as starting, but rebuttable presumption

Expert testimony

Factually lower/higher – look at level of intelligence, family situation, education level of family, etc.

Usually only recovery allowed for minor children, not adult – may be changing with baby boomer generation

Adult dies at age 70 – adult child only allowed to recover for average life expectancy – thus 5 more years

Statute of limitations MS

Survival actions – SOL begins to run at time of injury OR tort is learned about by decedent

Wrongful death actions – SOL begins to run at time of death - Use particular claim
(underlying statute) for that particular tort

Wrongful death defenses??
DEFAMATION
Common Law
General Issues at Common Law
Constitutional Limitations on C/L Defamation
Priveleges

COMMON LAW DEFAMATION

Defamation is a tort by communication

When is a statement defamatory?
 When it exposes Π to distrust, hatred, contempt, ridicule, or has tendency to injure Π in his office, occupation or business o Who decides if statement is defamatory?

1 st
the judge (the court) determines if statement could have a defamatory meaning and then the jury decided if it was or not defamatory.
29

Two types at common law

Libel – printed

Slander – verbal, non-printed
 Restatement §568 – definitions
1.
LIBEL
– publication of defamatory matter by:
(a) Written or printed word
(b) Embodiment of physical form
(c) Any other form of communication that has the potential harmful characteristics of the written word
2.
SLANDER
– publication of defamatory matter by:
(a) spoken words
(b) transitory gestures
(c) any communication NOT found in section 1

ELEMENTS OF (TRADITIONAL) COMMON LAW ACTION OF DEFAMATORY
PUBLICATION:
1.
False defamatory statement – falsity required in majority of juris. including MS/ ∆ has burden of proving truth
2.
About or concerning P
3.
Publication to a third party
4.
that caused Π damages

Malice was presumed
 Substantial truth was a defense at Common law; the ∆ ‘s actual account must be true; it is not enough the Π did other bad stuff he has to do the bad stuff ∆ said.

MS rule on substantial truth from McCollough v. Cook (1996) (MS SC)

Statement was technically true

But the implications were false

MS SC held – if statements lead to false implications, truth is NOT a complete defense

Slander cases – proof of pecuniary damages required unless slander was per se

Under modern common law, P may also be required to prove (in MS)

Falsity

Negligence

Actual damages

What needs to be plead in action for defamation (at c/l): PLEADING REQUIREMENTS
1.
defamatory words – (what was said)
2.
publication – communications to a third party ( ∆ said _ to X)
3.
inducement – extrinsic facts, (b/c of which, the words become defamatory (b/c of words
X thought this and thus defamed the Π)
4.
cooloquium – allegation that words referred to P-
5.
innuendo – allegation of defamatory meanings of words - (words conveyed meaning that defamed Π)
6.
special damages – when necessary to cause of action
30

USED WHEN THE DEFAMATORY WORDS AREN’T CLEARLY DEFAMATORY –Ex. Π burned down his barn as oppose to the obvious defamatory words of the Π is a thief.

Still exists in some juris. – but not in MS

CUT AND PASTE STARTING HERE

GENERAL ISSUES AT COMMON LAW

Group of people
 general group – hard to bring claim if you are one of many if there is no reason to associate statement with you particularly/ however, reference to a small group saying
ALL, maybe SOME could satisfy the requirement.

Neiman-Marcus Δ published a book in which he referred to Π
1
’s models, Π
2
, and saleswomen, Π
3
, as being call girls and which referred to Π
1
’s dress and millinery designers, Π
4
, as fairies (1952)

CANNOT libel a dead person

How clearly does person have to be identified such as w/ fictional novel?

Psychologist/ novel case

Law in CA – whether average reader would consider it defamatory and would be able to id person from novel

Slander per se situations (at c/l):
1.
Crime (accusation of minor crime generally not enough)
2.
loathsome disease
3.
affects business/office
4.
serious sexual misconduct
 changing times may affect how these situations are interpreted

Libel per se – really don’t exist b/c libel is apparent from the face of the statement LOOK AT
NOTES

SOL – usually much shorter for slander/libel than for other negligence suits

MS SOL – MCA 15-1-35 – 1 yr. From date of original publication

Defamation by broadcast media (radio, TV, movies), even though not written, treated as libel

MCA 95-1-3
 applies to radio and TV only
 stations are not liable unless defamation done by
 owner
 operator
 employee
 agent
 so stations are not liable for rebroadcasting something from network

MS 95-1-5 – Retraction Act
 applies to TV, radio and newspaper
31

 w/in 10 days of publication, P must give notice of intent to file suit
 media can then retract publication
 if retracted, P is then limited to actual damages
 for a communication to a third party to be a publication, must have been done by intentional or negligent act
 no publication if words spoken by D directly to P are overheard by an unknown and unforeseeable third party
 post office does not make a publication when it delivers a letter
 no publication when D sends a letter to P but someone else unexpected opens and reads it

Single publication rule

Publication of entire edition of book, newspaper, etc. containing defamatory matter gives rise to ONE cause of action, no matter how many copies printed

Majority rule - Cause of action accrues at time of original publication and SOL runs from that date
Republication - if you have several editions to the book the statute of limitations begins at the date of the last editions.

Internet, book, newspaper publishers – all primary publishers

Secondary publishers – newsstand, etc. – higher burden of proof – held liable only if they had reason to know defamatory

CONSTITUTIONAL LIMITATIONS ON C/L DEFAMATION

NY Times v. Sullivan (1964)

Watershed case

First case to address whether 1 st
Am. placed any limits on damages awarded

General rule – public officials are prohibited from recovering damages for a defamatory falsehood relating to their official conduct UNLESS it can be proven that the statement was made with actual malice

Actual Malice

Definition per SC in NY Times - knowledge that the defamatory statement was false or reckless disregard for whether it was true (reckless disregard part is what’s difficult to prove.
 If Π is a public official Π must prove ∆ made false statement with actual malice ?

To prove reckless disregard, P must prove:

D made the statement with a high degree of awareness of probable falsity

That D?? (Percy says P) in fact entertained serious doubts as to the truth of its publication (subjective)

Recklessness may be found where there are obvious reasons to doubt the veracity of the informant or the accuracy of the report or where D deliberately failed to investigate and purposefully avoided the truth
32

Basis of Liability for Public Plaintiffs
1. NY Times v. Sullivan a. RULE: plaintiff who is a public official has to prove that the statement was made with actual malice by clear & convincing evidence b. Questions left open by the opinion: i. Who is a public official? ii. Does state or federal law govern? iii. How do you prove actual malice? a. test to determine who is a public official: position is of such importance that the public has a genuine interest in their qualifications and performance

Who is a public official?

The issue is controlled by federal law and is a question of law, not fact

Federal law – whether position in gov has such apparent importance that the public has independent interest in the qualifications and performance of the person who holds it.

People who are running for public office are treated like public officials too b/c it can stimulate debate just as well.

Who is a public figure?

The issue is controlled by federal law and is a question of law, not fact

There are General (unlimited) public figures and vortex (limited) public figures

General public figure
 Somebody who enjoys “pervasive power and influence” or “persuasive fame and notoriety”

Michael Jackson and Martha Stewart

(limited) Vortex public figure –

Person who thrust himself into controversy or is drawn into it; person who attempts to influence outcome
Still must prove actual malice in public figure cases

Public Officials/Public Figures

2 Supreme Court cases consolidated extended NY Times rule to public figures – UGA coach giving AL plays case – notecase (p. 874)

P must prove:

Falsity

Actual malice by clear and convince evidence

Actual malice is reckless disregard for the truth with serious doubts

Actual malice may be proven by someone relying on a unreliable informant
33


If P proves actual malice, P can recover presumed, actual and punitive damages in accordance w/ state law
St. Amant v. Thompson- requirements for Public officials/ figures cont’d

RULE: there must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication… publishing with such serious doubts shows reckless disregard for truth or falsity and demonstrates actual malice

Reckless regard is something more than negligence.
 Jury may ignore ∆’s allegations of good faith where ∆ fabricated story, story is so incredible that only reckless person would have published them, or where there are obvious reasons to doubt the veracity of the informant.

Misquoting as proof of malice - Masson v. New Yorker Magazine - Δ
2
, writing for Δ altered statements in an interview with Π and put them in quotations. SC held:

Attributing a false quote to a person is not necessarily malice

Misquoting or false quoting is malice only if it is a material change from what
1
, was actually said

Above is a jury question

Private Person/Public Issue – P must prove:

Falsity in cases against media defendants (non-media defendants?)

P has to prove some fault, not acutual malice but At a minimum, negligence by a preponderance of the evidence (state could require higher burden)

Actual damages – P cannot recover presumed damages or punitive damages
UNLESS P proves actual malice b/c of 1 st
Am. protection but can collect compensatory damages by showing that P was negligent

Gertz v. Robert Welch (where rules come from):
 Δ published an article accusing Π (lawyer) of being a communist in a conspiracy against the police

Lawyer did NOT seek fame or to become embroiled in public matter
 He was marginally involved in a “matter of public concern”
 SC distinguished b/t public and private figures

State CANNOT allow awards for presumed damages – 1 st
Am. protection

Private P can collect compensatory damages by showing that P was negligent

Private P can only collect punitive damages if they prove actual malice

Private Person/Private Issue – P must prove:
 Degree of fault required by state c/l (usually negligence by a preponderance of the evidence)
34


A state has authority to decide what elements a Π must prove.

Depending on state law

P may be relieved of proving actual damages if damages are presumed under state law (absent a showing of malice)

P may recover punitive dames in accordance w/ state law
 Rules come from Dun & Bradstreet v. Greenmoss Builders (1985)
 Δ, upon negligently publishing that Π had petitioned for bankruptcy, contended that Π could not recover without a showing of actual malice

Very small 1 st
Am. interest – thus states can allow awards for presumed and punitive damages w/o a showing of malice – only w/ showing of negligence
FALSITY- Philadelphia Newspapers v Hepps
The Π, (Hepps) sued the newspaper for linking him to organized crime and published the material.

The court had to decide who would have the burden? Whether the Π has to prove falsity or whether the ∆ has to prove truth. It really only matters in the cases where the margin is 50% - 50% if the burden is on the Π, then the ∆ will win and vice versa.

The court decides to allow the burden to be on the Π therefore to try to retain some degree of right to the 1 st
amendment rights public debate.

PRIVILEGES

ABSOLUTE PRIVILEGES - Governmental privileges

Judicial

Scope extends to judge, witnesses, lawyers

Begins w/ filing of complaint – ends at end of trial

Must be relevant to trial

Legislative proceedings – legislative debate

Completely immune

Fault or intent irrelevant – but has to be w/I legislative debate – relevant to it
 Administrative branch of government

Scope – as long as w/I scope of employment –
 Look at particular state law to see how far down (to what level of governmental employee) privilege extends

Federal and Some State Officials

C ONDITIONAL / QUALIFIED PRIVILEGES – lost if acting w/ malice or for some purpose not protected by privilege

Fair comment privilege

Milkevich case

Said doctrine was created by c/l
35


Not entitled to privilege if interest was to harm

D must prove had an interest, was in good faith and reasonable as to what was said and whom was said
 Reporter privilege

Libel repeated from city council meeting – common law privilege protected public proceedings – much of that privilege no longer relevant in wake of NY Times if it concerns public figure

Private figure – Cox Broadcasting C. v. Cohn (rape case) – SC held actual malice does not extend here b/c right to comment accurately on judicial proceedings is sufficient to protect news media’s 1 st
Am. rights

Pleadings from court – Majority rule - you can report – Minority rule - others say you CANNOT report until it comes out in open court

Divorce proceedings – Time, Inc. v. Firestone – reported that divorce had been granted on grounds of adultery – when actually on different grounds.
Time’s defense was that wife was a public figure (socialite) and thus
NY
Times rule of proving actual malice should be extended. SC rejected – going to court does not automatically make one a public figure – P had no choice but to go to court and didn’t voluntarily thrust herself into the limelight

Job reference
 Protecting speaker’s interest/recipient’s interest/common interest

Must be in good faith

If you go outside scope in giving info to potential employer you lose the privilege – such as if person already hired

Therefore if a potential employer called Pro. Percy she would be protected under the qualified privilege as long as she does not go outside the scope of the student’s qualifications.

Statement made for recipient interest o For example, the employment cases

Statement made for your general (common) interest o For example, at a church meeting and deciding about selecting a new pastor and some one says No not him he is a cheater, 2) sororities voting process

Statement made to protect yourself o For example, a debt collector calls you and you tell him you didn’t pay the doctor bill b/c the doctor assaulted you while you are unconscious
 Percy’s formula for defamation questions:
1.
look at c/l – state law to determine what must be proven
 falsity
 negligence
 damages
2.
constitutional limitations
3.
private cases – what to prove, etc.
36

Privacy
Appropriation
Unreasonable intrusion
Public disclosure of private facts
Publicly portraying someone in false light

PRIVACY

Very related to defamation

APPROPRIATION
 Occurs when P’s name or likeness or voice has been used w/ D’s product for financial benefit

Flake v. Greensboro News Co.
(1938) – used picture w/ add w/o person’s permission and said it was someone else

Must prove:

Show an unauthorized use
 Of the person’s name likeness, or voice

For commercial or inappropriate purpose

Damages

Compensatory and punitive

Celebrity – damages are how much he would have earned from it

These cases often involve celebrities

Dispute as to whether D should be liable for c/l misappropriate of identity if all is done is to “evoke” the id of celebrity – several courts say yes – even though celebrity’s likeness or name is not used

Example – Vanna White case – D’s run ad depicting a robot dressed to resemble Vanna
White. P does not consent to ad, nor is she paid. Held – D violated P’s common law right of publicity by appropriating P’s identity didn’t matter that her likeness or name had not been used

UNREASONABLE INTRUSION

P may sue if solitude is intruded upon – (does not have to have a publication just intrusion)
 must prove:

An intentional intrusion

Into an area where one reasonably expects privacy

That would be highly offensive to a reasonable person

Example – wiretapping cases – will constitute intrusion if a private place o Intrusion can take several forms, for example, prying into private bank accounts, invalid order requiring production of books; Physical intrusion is like searching a woman’s shopping bag in store, search of employee locker)
Eavesdropping:
Public place: generally NOT liable.
Private place: YES
37


Damages?

Compensatory, punitive and actual damages include damage for emotional distress

PUBLIC DISCOLSOURE OF PRIVATE FACTS

P must prove:

Information disclosed to public (to more than just a few)

Of Private facts – not part of public record or public concern

That are Highly offense to RPP

Example ( public person ) - Pearson v. Dodd
 Π contended that the manner in which Δ obtained the info constituted an invasion of privacy
 Court held P cannot recover b/c he’s a public figure and information is of public concern and the receipt of information knowing that is has been obtained without the authorization of the owner does not constitute an invasion of privacy.

Damages – rule from Pearson
– Court says you must look to both:

Punitive if you can prove with clear and convincing evidence

( Actual damages ) Emotional damages for intrusion – paranoid that everyone is talking about you

Damage to reputation

Example ( private person ) – Cox Broadcasting Corp.

17-year-old daughter was raped and killed, sued Δ after Δ disclosed her identity to the public in violation of state law

Court held truthful, accurate publishing of matters of public record are not actionable.
Once on the public record, a fact is no longer within the zone of privacy.
 The rape thrust Π and his daughter, albeit reluctantly, into the public light

Based on 1 st
Am. protection – reporter got information from public indictment
Hypos :
 broadcaster publishes rape V’s name based on public record: NOT actionable b/c publication is truthful. (can’t prove falsity, so no defamation claim). 1 st A issue. Pulbic issue. o
Stat must be narrowly tailored.
 Go to neighbor and tells about drugs in your cabinet: Maybe…if she told 10 neighbors…not 1. Show damage to reas person.

Husband disclosed nude pics of ex-wife:

Woman gives her pics for expert testimony: NOT private fact b/c voluntarily gave (for a limited purpose) but might have appropriation claim. o Breach of Confidence claim: confidential info that you disclose further. Some cts recognize this claim.
 Dr delivers baby…tells mother he won’t tell child who she is. He does.

Give in confidence for limited purpose

Fiduciary relationship
 Sweet Home AL: “why don’t you just go to a gay bar?”: percy says this is private info and this is in public.
 Public official gay: even if public official…this is private info…highly offensive to a reas person.
38


PUBLICLY PORTRAYING SOMEONE IN FALSE LIGHT

20-30 juris. have rejected this tort because it’s so similar to defamation

P must prove

Publication
 of false statements about Π (placed the Π in the public eye)

Highly offensive to RPP (some juris. use objectively reasonable claim)

Damages?
 Some courts think you don’t have to prove actual malice like the requirement in
Gertz for private person/public issue in defamation others think so, therefore the issue is unresolved in regards to a False Light case. 1 st amendment is unclear on this issue.

Example ( private person ) Cantrell v. Forest City Publishing
 Δ, a reporter, did a follow-up story on the effects of a bridge collapse on the survivors of those who had died
 Arguably this was a case of public concern – thus requiring a finding of actual malice

Rule from this case - a reckless disregard of the truth by author will expose a publisher (imputed through respondeat superior) to liability in an action for invasion of privacy
 the newsworthy value and interest in the story were stale. The embellishments in the story were knowingly false. They were included to make the feature more interesting.

Such knowingly false attempts to sensationalize a story abrogate the conditional privilege to inform the public

Because of the knowing misrepresentation - Court said jury could have found actual malice. The definition of actual malice is with knowledge that a defamatory statement was false or with reckless disregard of whether it was false or not.
Regular malice at CL for awarding punitive damages as reckless or wanton disregard of the Π rights.

Example ( public person/public concern) Time Inc. v. Hill

Actual malice is required in issue of public concern BUT

There is no false light case regarding private person/private concern

Example ( public person) Hustler Magazine v. Falwell
 Π contended that he could recover for emotional distress caused by Δ’s cartoon, even though actual malice had not been shown
 P
UBLIC FIGURES
/
OFFICIALS
may not recover for infliction of emotional distress due to an allegedly defamatory act unless actual malice is shown

This case makes it practically impossible for public figure to recover for IIED w/o showing actual malice

Actual malice, in the constitutional context of defamation, means the knowledge of the falsity of a statement or a reckless disregard for its truth

Public figures have to prove falsity of the statements and since this was a parody it was meant to be false.
39


In the area of parody, this seems to be inapplicable. No assertion of fact exists to determine whether such was true. However, in the other areas of defamation, this case will have a widespread effect

Difference b/w this and defamation????
Misrepresentation
Intentional/Fraudulent Misrepresentation
Negligent Misrepresentation
Strict Liability (Innocent Misrepresentation)
Misrepresentation to 3 rd Parties
Justifiable Reliance
Opinion

MISREPRESENTATION – GENERALLY o Misrepresentation:Someone makes an affirmative statement that is false o Concealment: you don’t misstate something but you make it impossible for the other person to know of a defect. o Non disclosure
 Misrep. grew from court’s reluctance to awarded damages for intangible pecuniary loss where there is no direct physical injury or property damage

Special rules have grown up governing those misrepresentations that have that effect

INTENTIONAL/FRAUDULENT MISREPRESENTATION

Common law action of “deceit” or “fraud” corresponds to what we would call today intentional/fraudulent misrepresentation

Issue w/ fraudulent misrep. – do you have duty to disclose?

Disclosure issue
 Restatements §551

No affirmative duty to disclose

If you can show special relationship – there is a duty

Swinton v. Whitinsville Savings
 in selling the house to Π, Δ failed to disclosed that the house was infested with termites

Under old traditions of CL court held there is no liability for bare nondisclosure

This rule still very much in use today, has been eroded from the severity seen here to much more acceptable applications by numerous exceptions which have been created

This case does not represent the modern-day trend , which is towards more of a duty to disclose known material facts.

Many states have specific statutes dealing with the subject of concealment in many fields, including that of real estate

Third party recovery – even if D did not intend to influence P, P can recover if he can show he is a member of a class which D had reason to expect would be induced to rely on his statements
40


Griffith v. Byers Const.
 Πs sued Δ when they discovered that there lots could not be landscaped due to the soil’s high saline content

A purchaser who has bought a home on a lot, which contains sterile soil, may recover on a fraud theory from the developer of the lot, even though, in its strict sense, there is a lack of privity between them.
The fact that the title was first taken in the name of the builder did not change the identity of those who would be ultimately affected by the fraud

Where the fraud is predicated an intentional tort theory, and the misrepresentation is in the nature of a “continuous deception,” the Π need not show that he belongs to a class of persons whom the Δ intended to rely on his assertions.
 Where a negligent misrepresentation is alleged, the Π must show that he was in that class of persons which was reasonable foreseeable or intended by the Δ to rely. In strict liability cases, no scienter on the part of Δ need be proved

When do you have a duty to disclose? Restat. Torts §551 o When the other party has a duty to disclose. One party to a business transaction is under a duty to disclose to the other before the transaction is consummated.
o 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 b/c of the relationship b/w them the customs in the trade or other objective circumstances would reasonably expect a disclosure of those facts.
o Duty to disclose to correct a statement that was true when it was made but now it is false o Fiduciary duty to disclose info o If someone makes a misleading half truth there is a duty to disclose o Makes a material fraudulent (false) statement - If you learn that the other party will rely on that statement then you have a duty to disclose

Proof of Fraudulent Misrepresentation

An action for deceit requires proof of fraud: that the false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false – wherever there is an honest belief in the truth of a representation, there can be no fraud, and therefore no action for deceit. (elements of fraudulent misrep. claim). P must also prove (w/ N/M or F/M) that he justifiably relied on the misrepresentation and then prove damages. (See below for specifics on damages and justifiable reliance)
41


Derry v. Peek (1889) – English case

Above rule (3 elements) came from this case
 Π had purchased shares in Δ’s tramway company, which folded after its use of steam and mechanical power was refused by the Board of Trade

To determine whether or not a belief was honestly held, the reasonable man standard is used
 Court said negligence can be used as evidence of fraudulent misrep. But will not serve as proof alone

The majority of American courts still purport to accept Derry v. Peek using elements listed above. In reality, however, most have devised fictions which do allow recovery in deceit for misrepresentation made with less than an actual intent to deceive. It is generally agreed that a wrong motive, as distinguished from a fraudulent intent, is not essential to the tort of deceit

Fraud is proven when it is shown that a false representation has been made:
(Derry)

Knowingly, or

Without belief in its truth or

Recklessly careless whether it be true or false.
 Restatements §526 – how to prove fraudulent misrepresentation
(much broader than English Court’s definition in Derry)
(a) Knows or believes the matter is not as he represented it to be
(b) Does not have confidence in accuracy of his representation OR
(c) Knows he does not have the basis for his representation that he states or implies – this one is the closest in the Restatements to negligent misrep.

Damages for Fraudulent Misrepresentation
 Π has to prove fraud or intentional misrepresentation by clear and convincing evidence
 Once P has proven elements for deceit – he may recover damages proven to be proximately caused by D’s misrepresentation; punitive damages may be allowed.

Damages must be actual – may NOT recover nominal

Measure of damages is usually either reliance damages or benefit of the bargain damages

NEGLIGENT MISREPRESENTATION

Today, most courts allow recovery for negligent misrepresentation even when P suffers only intangible economic harm

Most N/M cases are economic loss cases

Same requirements to prove N/M as for F/M

Business relationship addition – most courts, however, add requirement that D’s statements be made in the course of his business or profession (must est. a duty), and that D have had a pecuniary interest in the transaction
 Percy’s example of law school grad giving advice to friend at City Grocery
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
NO DUTY per most courts b/c business relationship has NOT been est.

Most courts don’t adopt negligent misrepresentation – they define F/M so broadly as to include N/M

Other examples of negligent misrep.

Franchiser/Franchisee – Franchiser says your hotel occupancy rate will increase by 30% if you sign K and begin using franchise name – language of K will be very important here??

Employer negligently misrepresents when your health insurance will kick in. You cancel your old insurance and then have a wreck. Your new insurance hasn’t kicked in yet. You can sue if juris. recognizes negligent misrep. – could likely prove the factoral test??

STRICT LIABILITY (INNOCENT MISREPRESENTATION)
 Generally, a person has no liability for an “innocent” misrep. – that is there is no s/l

BUT there are some exceptions – such as where two parties are involved in a sale transaction and one makes a representation to another

Not broadly applied – ONLY A FEW CASES CONCERNING LAND WILL
STRICT LIABILITY BE IMPOSED

Basically means you knew or should have known – a duty to know the truth

This is the Minority position – Restatements have adopted minority position in
§552(c) (see p. 1031)
 G.P. Putnam’s Sons
 Π relied on a book on mushrooms published by Δ and became critically ill after eating a poisonous mushroom

Rule - Strict products liability is not applicable to expressions contained within a book.
 Products liability is geared toward tangible objects. Furthermore, there is a strong public interest in the unfettered exchange of ideas.

The threat of liability without fault could seriously inhibit persons who wish to share thoughts and ideas with others. Additionally, publishers do not owe a duty to investigate the content of books that they distribute

Hanberry v. Hearst Corp.
(1969) – Slipper case

P sues manufacturer and publisher of Good Housekeeping who had endorsed slippers

Held for P – b/c purpose in granting seal of approval to products was to induce people to buy them – buy procedure it used – magazine purported to public to have a superior knowledge and special info concerning the product

(NEG) MISREPRESENTATION TO THIRD PARTIES

Comes up frequently w/ claims against accounting/auditing firm

Question is which 3 rd parties can bring claims against firms they have no privity with?


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
Three approaches w/ negligent misrepresentation to 3 rd parties:
1.
NY (Strict) : TP must have privity OR something extremely close to it to bring claim. (Ultramares/Credit Alliance)
Furthermore, Accountants may be liable to persons in privity for negligently preparing financial reports if the accountant knew the report would be relied on for a specific purpose by a known party.
i.
Knowledge of Reliance ii.
Info for Specific purpose iii.
Known party iv.
Special relationship w/ known party.
(regular direct contact b/n them)

Can still bring fraudulent claim if you can show fraud
2.
MAJ/R 2 nd §552 (intermediate) view : Any foreseen + known Πs.
Liab expanded.
Policy :

Greater incentive to get it right b/c liab is expanded under this rule.
 Then lender may have better comfort level…cost of credit will go down for everybody (interest rates lowered).

Accounting firm in better position to bear cost
R§552 : Π must be person or one of ltd group of persons for whose benefit and guidance intends to supply the info OR knows that the recip inteds to supply it. I.e., limited group of persons KNOWN to the ∆. (Foreseen Π and actually known )
Hypo : All the places bank will give credit statement = foreseen
Πs.
3.
Minority (Broad) view : Any
Foreseeable Π
. (Citizens State Bank)
 accounting firm may be liable to 3 rd
party for N/M if they knew or should have known the person would rely on them

Only limitation on liability here is that 3 rd
party be a reasonably foreseeable 3 rd
party.

Give accounting firm a better incentive to do better and they are in better position to purchase malpractice insurance by passing cost onto client instead of the creditor
MS !!! Has adopted this rule.
 MS – adopted Minority rule

MS adopted in Touche Ross & Co.
(1987)
 MS SC looked at NY rule, Restatements rule and CA rule (which no longer applies in CA)
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
Justifications for transfer of risk – MS SC said accounting firm in better position to deal w/ liability – can obtain liability insurance and pass cost on to clients

Court also suggested how firms could limit scope of liability under this broader rule – contractual agreements w/ corporate clients
 MS SC also found it important that there is NO PRIVITY requirement in MS statute

P DID NOT win here, however, because of superceding cause of employee stealing funds

INTENTIONAL OR FRAUDULENT MISREPRESENTATION TO 3 RD PARTIES

Ultramares case set out general rule – same as w/ regular F/M

Must prove:

Knowing

Lack of honest belief in truth – to prove this prong – look to evidence that co.’s practices were so grossly negligent that they couldn’t have believed their statements to be true

Recklessness

Intent to induce Π’s reliance on misrep
 justifiable reliance on part of Π a.
Π in fact relied b.
reliance was reasonable

Plaintiff have a higher burden of proof and burden of pleading fraud with particularity- meaning provide specific details of the incident

JUSTIFIABLE RELIANCE

Burden of proof on P to prove in N/M or F/M that P justifiably relied on D’s misrepresentation

Most juris. use objective test – would reasonable person using ordinary care/reasonably inquiry w/ due diligence have discovered the representation – and use subjective factors in analyzing (such as education level, etc.)

Reasonable reliance is a question of fact for the jury

MS case about justifiable reliance??

Material info : I.e. material to price buyer wants to pay or if he wants to buy at all. = statement of fact. Leads to justifiable reliance (no duty to investigate and apparent accurate representation). Test = nobody would believe it. = jury q.

OPINION
Statement of OPINION
: Generally do NOT give rise to a claim. = “speculative expressions of opinion.”

Exception : However, if statement of opinion implies a fact OR ∆ knows facts that are inconsistent w/ that opinion, there is liab.
 Trade talk or “Puffing” : Depends on whether it was an arm’s length transaction and statement is material. Generally, NO claim b/c fact that statement is made has nothing to do w/ objective truth. I.e., reas people should know seller lie (“campaign managers”). o
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o Statement about value of product
: type of “opinion puffing” that is permitted.

Misrepresentation v. Opinion

Misrepresentations of Fact

Salvaged car example – characterized as opinion unless you looked it up in the bluebook
– then it becomes misrepresentation

Rare violin example – if D represents himself to be expert on rare violins, then it is a misstatement of fact

Fiduciary relationship – your entitled to rely on the opinion given
 Example – lawyer/client – settle a case because lawyer tells client it’s worth NO
MORE than $10,000 – but client later finds out the same type of claim P won $1 million verdict

How far can promoters/manufacturers go when selling/promoting products?

Vulcan Metal case
 “dealer’s talk” – no sensible man would take seriously that the product was perfect
 should NOT rely on “puffing”
 stock tips
 opinions if general
 misrepresentation of fact like with the Merrill Lynch case – encourage customers to go to particular website that they are actually underwriting and buy that stock

Misrepresentations of Law

Misrepresentations of law were NOT actionable at c/l

Modern view/Restatements view – statements involving legal principles are generally treated the same as any other kind of statement

Title to land – representation of fact

Accreditation - representation of law
 Liquor store license (Percy’s example) – representation of law
 Car wreck (Percy’s example) – you have a wreck – person who injures you tells you the law in MS won’t allow you to recover and you should settle. You settle but then find out that was not true – representation of law (if person was lay person)

Prediction/Intention

D predicts certain thing will happen – almost always held to be an opinion

But where D instead of making predictions about things beyond his control makes a statement as to his own intentions, P’s reliance will often be justifiable

This also applies as to prediction about intent of others

Example – McElrath v. Electric Investment Co.
(1911)

F/M in K case (that involves intention) – prove:

D did not perform/pay

D had no intention to perform/pay
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Statements of PREDICTION & INTENTION : NO action generally. Future predictions regarding events cannot be the basis of a fraud action b/c they are held to be merely an opinion. Ex: statements about future profitability.
Exceptions : intentions
: If Π can show ∆ knowingly misstated theses intentions, he will have an action for fraud. This is the ONLY time you can sue for fraudulent misrep based on statement of prediction/intention.
1.
Statement about what TP intends to do
: If Π can show ∆ knew it was false or had no basis at all to make that statement, then that satisfies the fraud requirement.
2.
Statement about own intent
: If Π can prove ∆ had no intention of fulfilling the prediction when he made the statement. a.
Future promise : more like a K…Tort law NOT appl for breach of promise. b.
Why sue in Tort : K limits liab; SOL more advantageous, etc. c.
ex : Party to a K will often try to avoid various K defenses by suing on a theory that the other party never intended to keep the K, and therefore fraudulently misstated his intent to do so.





Hypos :
 in our opinion, you should buy some shares of stock in this company. You know they are about to go bankrupt…gives rise to claim.

Car dealer says car will last for 5 years. It breaks the next week: Statement is usually permitted as trade talk.
This land is worth $5,000: opinion
I paid $4900 last year (and in fact you paid $3,000 for it): actionable as statement of fact.

I know neighbors are getting $5,000 for same land and in fact
 they are only trying to get $5,000 for it: actionable as statement of fact.
Dance co says your child has talent…pay us $25,000 and we’ll make her a ballerina. Kid still sucks: Trade talk = opinion.
∆ says Π is legally responsible when that wasn’t the case:

I predict stock mkt will reach 4,000 today: no action
You should buy my half of the company…I’m going to lead the company to the next level. (even though I intend to sell my part b/c co going bankrupt): actionable. Π must show that ∆ does not intend to keep company but intends to sell it.
Convince guy’s wife to come be your housekeeper. “Move here…you can get a job.” Tell him he will have no prob getting job. Turns out he is unemployed for 2 years: just a prediction. NO action.

 stock value of this co will triple in a year: prediction/opinion.
NO action. student transfers to Columbia base on school’s rep that he would acquire wisdom, truth, and character. he couldn’t graduate: NO action.
Terms too vague for intentional misrep.
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Damages :
MAJ /“ Benefit of the Bargain ”: diff b/n current value and what was promised.
Puts ∆ in position he would have been in if the statement was true.
MIN/ “Out of Pocket” : ∆ recovers only actual loss.
Ex: ∆ say the car is “worth $15K”; Π pays $13K; Π proves actually worth $10K.
Benefit of bargain
: Π entitled to recover the diff b/n where he is now (10K actual worth) and where he would have been if statement had been true (15K). Gets 5K.
Recovers what he actual lost and to be in the position he would have been in if the statement is true.
Out of Pocket : only lost $3,000 b/c paid 13K for something worth 10K.
Recovers actual loss.
VIII. INTERFERENCE WITH ADVANTAGEOUS RELATIONS
A. Injurious Falsehood
Elements :
1.
published false statement (doesn’t have to be defamatory or hightly offensive)
2.
about Π or Π’s product or business
3.
which is disparaging or damage your pecuniary interest published to 3 rd person
4.
Fault : with Malice
 knowing it was false
 reckless disregard
 ill will (some court’s say spite or ill will is enough
which caused special damages
Damages : NOT presumed.
CL
: Don’t have to prove special damages. BUT must show general loss.
Must be reas in circs.
MOD preference : hold you to higher burden of special damages if could be shown in the case. I.e., show specific loss of customers/profit.
Always show special damages if you are able .
Product comparison : v. General “puffing”.
Can’t have assertion of fact .
Well-known corp : might invoke 1 st
A standards as a public figure.
Hypos :

Bose stereo speaker: trade libel claim for saying something about speakers in consumer report article. o diff is it’s not poli speech but is commercial speech
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o Ct says Bose is a public figure. Thus, must show Actual Malice under NY Times .

Someone makes false statement that can have the effect of damaging your business . o Can’t bring defamatory OR false light o usually a business OR statement about a product . o Public figure: I.e., well-known corp might invoke 1 st amend protection o Damages NOT presumed. Must show proof of general damages + preference of proof of special damages, i.e. specific loss of customers/profit. (unless ct says general damages are reas). I.e. put on special damages if you are able.
Intentional Interference with Business Relations

Same as intentional interference with K except that the facts are such that the Π only had a prospective advantageous relationship, not a K.
o Must show that there was not a K but that the ∆ interfered with the prospective clients for ex. the ∆ hindered people from wanting to shop in your store

Interference must be proper
∆’s privilege to compete is greater given that there is not yet a K.
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