ADVANCED TORTS TOOLS & TABLES OUTLINE
TOOL
AUTHORITY
INTERPRETATION/APPLICATION
INTENTIONAL INTERFERENCE WITH EXISTING OR PROSPECTIVE CONTRACTUAL RELATIONS
Elements:
Iowa Elements:
(1) The plaintiff had a contract with a third party;
Intentional
(2) The defendant knew of the contract;
Interference with
(3) The defendant intentionally and improperly interfered with the contract by _______;
Existing or
Prospective

Does NOT require a purpose to injure or destroy.
Contractual
(4) The interference caused the third party not to perform (or made its performance burdensome or expensive); and
Relations
(5) The amount of damage.
A determination of whether the defendant’s conduct was
Intentional and
Adler, Barish, Daniels, Levin and Creskoff v. Epstein (1978)
(atty ethical violations should be considered in determining
improper involves a consideration of the following factors
Improper
improperness of conduct)
taken from the Restatement (Second) of Torts, § 767:
Interference
(1) the nature of defendant’s conduct;
Vantine Studios v. Fraternal Composite (1985) (using an
(2) defendant’s motive;
indemnification clause to encourage the breach of an existing K
(3) plaintiff’s interests interfered with;
is improper conduct)
(4) the interest sought to be advanced by the defendant;
(5) the social interests involved in preserving plaintiff’s right
Nesler v. Fisher & Co. (1990) (litigious actions were improper
to contract and defendant’s freedom of action;
if the suits were filed predominately for the purpose of harassing (6) proximity or remoteness of defendant’s conduct to the
the plaintiff)
interference;
(7) relations between the parties.
Vantine Studios v. Fraternal Composite (Punitive damages
The following damages are allowed:
The Amount of
are only available upon a showing that the interference was
Damages
(1) Compensatory Damages:
undertaken with legal malice.)
 Usually in the form of lost profits.
 Lost profits must be shown with reasonable certainty;
Revere Transducers v. Deere & Co. (1999) (punitive damages
lost profits cannot be speculative, contingent,
allowed where def has secret discussion re confidential
conjectural, remote or uncertain.
information with employees of competitor known, such
 With new businesses, expected profits are also
discussion are known to be in violation of the non-disclosure
recoverable based on factors such as:
provisions of those employees Ks, and such discussion are soley
o Experience in the industry;
for the purpose of breaking def’s K w/ pl)
o Expert’s consideration of projections;
o Willingness of plaintiff to make business
succeed.
(2) Punitive Damages:

Only upon a showing of legal malice.

Legal malice may be shown by wrongful or illegal
conduct committed or continued with a willful or
reckless disregard of another’s rights.
(3) Injunctive Relief: Only allowed if tort is continuing
Iowa Cases:
Vantine Studios v. Fraternal Composite (1985)
Facts: Pl had contract with a number of fraternities/sororities to take composite pictures. Def signed Ks w/ them with indemnity
Intentional
clauses stating that def would pay any legal costs or fees incurred in breaking the K already held with pl.
Interference with
Existing or
Holding
Prospective
(1) using an indemnification clause to encourage the breach of an existing K is improper conduct
(2) Punitive damages are only available upon a showing that the interference was undertaken with legal malice.
Contractual
Analysis: offering of lower prices or earlier delivery time is not tortious or improper but indem clause crossed the line.
Relations
Nesler v. Fisher & Co. (1990)
Facts: Pl renovated building in dt Dubuque for leasing purposes and secured tentative leasing arrangements with govt agencies.
Def waged a campaign to financially disrupt plaintiff’s K:
(1) Pressuring county bd of supervisors to shut pl down
(2) sued county board of supervisors for taking a higher bid for rent than his lower bid
(3) persuaded one of the tenants to sue the plaintiff for not having adequate handicap access
(4) visiting renovation sites
This ultimately resulted in pls inability to obtain the financing needed to complete the project, and was forced to deed his equity in
the project to the bank.
Holding: litigious actions were improper if the suits were filed predominately for the purpose of harassing the plaintiff (i.e.,
the lawsuits were not filed with a good faith belief in the merits).
1
Hunter v. Board of Trustees of Broadlawns Medical Center (Iowa 1992)
Facts: new CEO fired in-house CEO candidate out of jealousy. pretext was staff reductions
Holding: One cannot tortiously interfere with a contract to which one is a party.
Analysis: Here new CEO’s status as agent/employee of hospital does not make him party to pl’s empl. contract.
Schwartz Cases:
Intentional
Interference with
Existing or
Prospective
Contractual
Relations
Revere Transducers v. Deere & Co. (1999)
Facts:
(1) Revere contracted with Deere to make and supply some form of sensor used in tractors called a gozinta.
(2) Deere encouraged 2 Revere employees to quit and start making a competing sensor for Deere.
(3) These 2 employees had non-disclosure contracts with Revere that prevented the employees from disclosing any of the trade
secrets associated with the sensor w/in one year of termination. Deere then cancelled its contract with Revere and began
buying sensors from the two employees.
Holding: Punitive damages allowed where def has secret discussion re confidential information with employees of competitor
such discussions are known to be in violation of the non-disclosure provisions of those employees Ks, and such discussions are
soley for the purpose of breaking def’s K w/ pl.
Lumley v. Gye (England 1853)
Facts: a competitor knew opera singer had exclusive K to perform at another theatre, but he enticed her to break this K and sing at
his theatre instead.
Holding: One who maliciously induces another to breach a K is liable for interference.
Bacon v. St. Paul Union Stockyards (1924)
Facts: Plaintiff was employed by a company to buy and sell livestock, which he did at defendant’s stockyards. Defendant excluded
plaintiff from the stockyards and forbade others from employing him.
Holding: The wrongful interference with the contractual employment relations of others causing a breach is a tort.
Adler, Barish, Daniels, Levin and Creskoff v. Epstein (1978)
Facts: Law firm sued an associate who tried to take clients with him after being terminated by calling them and sending letters with
form to discharge Adler and hire himself. Associate claimed conduct was protected by 1 st A.
Holding: States may constitutionally impose sanctions upon attorneys engaging in conduct which violates ethics rules, even though
such conduct involves commercial speech. Also such ethical violations should be considered in determining improperness of defs
conduct.
Brimelow v. Casson (1923)
Facts: manager of a burlesque troupe paid very low salaries to his girls (forcing the girls to engage in prostitution out of economic
necessity). Actors Association persuaded theatres who had Ks with manager to back out until he started paying better wages.
Holding: The Actors’ Association’s actions were justified and privileged b/c:
(1) They were done to protect the health and well-being of others; and
(2) They were exercised in good faith.
Freeman & Mills v. Belcher Oil Co.
Facts oil company hired law firm which hired pl accounting firm for oil company. Oil company is owed $70k when oil company
cancels k with law firm and denies that law firm had authority to hire accounting firm. Sues for “bad faith denial of contract.”
Holding: Tort causes of action for breach of contract are limited to insurance bad faith.
Elements:
Intentional
Interference with
Prospective
Business
Expectancies
Neibuhr v. Gage (1906)
Facts: Plaintiff was wrongfully induced by defendant to transfer stock to defendant by duress threats and false accusation of
larceny.
Holding (Minority Rule): Establishes tort remedy for breach of contract where breach is caused by deceit/duress.
INTENTIONAL INTERFERENCE WITH PROSPECTIVE BUSINESS EXPECTANCIES
Iowa Elements:
(1) The plaintiff had a prospective [business relationship] or [contract] with a third party;

No K required
(2) The defendant knew of the prospective relationship;
(3) The defendant intentionally and improperly interfered with it by ______________;

such intentional and improper interference must be done for the sole/primary purpose to financially injure or destroy
the plaintiff (no legitimate business purpose).
(4) The interference caused ____________ [or prevented plaintiff from] ___________;
(5) The amount of damage.

Under (5), damages are same as are allowed under Intentional Interference with Existing Contractual Relations.
2
Iowa Cases:
Intentional
Interference with
Prospective
Business
Expectancies
Schwartz Cases:
Intentional
Interference with
Prospective
Business
Expectancies
Clarke v. Figge (Iowa 1970)
Facts:
(1) Pl owned and operated a retail appliance store in Davenport and had a line of credit with bank allowing him to purchase
inventory.
(2) Def had an option to purchase real estate owned by plaintiff, and when the option expired pl refused to extend it.
(3) Def was Pres of bank, and had all of plaintiff’s loans called (due) immediately, resulting in plaintiff having to close his business
b/c of inability to purchase inventory.
Holding: Plaintiff had legitimate prospective business expectancies of future business/customers based on past business history
that but for the interference would have continued. Proximate cause established. No K needed.
Analysis
It is easy to establish the sole purpose of the interference was to financially destroy the plaintiff in this case, b/c:
(1) defendant had no legitimate business purpose for his actions;
(2) defendant was not a competitor seeking to further his own business.
*Note: S.O.L. is 5 years (injury to property) as opposed to 2 years (injury to reputation).
Economy Roofing & Insulating Co. v. Zumaris (Tommy Boy Case)
Facts:
(1) Defs, the second wife and son of the deceased owner of Economy Roofing both worked for the co.
(2) Owner died intestate, thereby leaving the business to his two children from his first marriage.
(3) The two children from the first marriage refused to sell the business to the defendants.
(4) Consequently, the defendants took customer lists, pricing lists and other confidential information from Economy Roofing and
started their own competitor roofing company.
(5) In doing so, defendants stole quite a few customers from plaintiff company in which no contract existed, but the probability of
future work was great.
Holding: Theft of confidential information, trade secrets, etc. will always be improper;
Malicious motive of revenge against the owners who refused to sell satisfied the purpose to financially injure or destroy component
as well.
Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995)
Facts:
(1) Pl Della Penna was in the business of buying Lexus’ at retail price from Lexus Dealers in California, and then exporting the
Lexus’ to Japan and reselling them at a higher price.
(2) Toyota caught wind of this scheme and began to forbid dealers from selling Lexus’ to plaintiff.
(3) As a result, plaintiff’s supply of Lexus’ dried up.
Holding: No interference in the absence of improper conduct and here Toyota was merely attempting to protect its own interests.
Analysis:
Pl must plead and prove that the defendant not only knowingly interfered with the plaintiff’s expectancy, but engaged in conduct
that was wrongful (improper) by some legal measure other than the fact of the interference itself.
Coca Cola v. Doris House
Facts Doris Housesold Doris House Cola instead of Coke when customers ordered Coke
Holding: Passing off is a form of interference with business expectancies.
Passing off: occurs when def misrepresents his goods or services as being the goods and services of the pl.
Bonus Cases:
Intentional
Interference with
Prospective
Business
Expectancies
Harmon v. Harmon (1979)
Facts: Def fraudulently and unduly influenced mother to disinherit pl.
Holding: IIPBE is a tort that utilizes “but for” causation standard of proximate cause. Pl is allowed to recover even though
mother is still alive (future profits).
Analysis
(1) Where a person can prove that, but for the tortious interference of another, he would in all likelihood have received a gift or
profit from a transaction, he is entitled to damages.
(2) interference with an expectancy of a financial interest like inheritance is valid if pl can show the interest is more than a hope or
dream
Tuttle v. Buck (Minn 1909)
Facts: One barber town. Local banker had a feud with the local barber and recruited first barber’s customers. When this guy
failed banker hired another barber and tried again. Classic no legitimate biz purpose case.
Holding: personal animus is intentional and improper motive
Mennonite Hardware Bonus Case
Facts: PA church member owned a hardware store. Became disgruntled with the church and criticized Mennonite doctrine and the
local Bishop. He was immediately excommunicated and the Bishop ordered that he be shunned. Nobody will come into his shop
so he sues for interference with biz expectancies. Bishop defends on basis of 1 st A freedom of religion.
Holding: Shunning is improper. No 1st A freedom of religion privilege to interfere with biz expectancies.
3
Injurious
Falsehood
Injurious
Falsehood:
Slander of Title
Injurious
Falsehood: Trade
Libel
Injurious Falsehood
Ratcliffe v. Evans (Eng. 1892)
Facts: Defendant publishes article after man’s death that his son
ceased to operate the engineering business he and his father
operated for many years.
Holding: In order to prevail, plaintiff must prove special
(specific) damages resulting from the publication of the
statement to third parties.
Analysis
Proving Special Damages
(1) If reasonable to expect him to do so, plaintiff must show
specific damages, such as actual customers and contracts that
are lost OR
(2) if such information is not available, plaintiff may proceed
on a showing of general decline/loss of business.
*Note: misconduct must proximately cause the special
damages.
Horning v. Hardy
Facts: Def’s attorney called pl’s buyers and told them that the
def’s actually owned the property being sold by the pls.
The buyers backed out and no sale was completed.
Holding: There is a privilege to slander title and defendant
is not liable for statements made:
(1) in protection of actual economic interest in the
property; or
(2) in good faith belief of such interests in the property.
National Refining Co. v. Benzo Gas Motor Fuel (Mo. 1927)
Fact: Def published leaflet (which it distributed to numerous
users of motor fuel) stating that benzo gas, a benzol-gasoline
mixture, would severely damage the bearings of automobiles
because benzol explodes instantaneously upon ignition.
Holding: Because statements went to the quality of the pl’s
goods and not the pl personally, pl was required to prove special
damages, which it did not do.
Testing Systems v. Magnaflux Corp. (1966)
Facts:
(1) Plaintiff and defendant were competing manufacturers of
devices and systems used for testing industrial and
commercial materials.
(2) Defendant published a report (and circulated it to plaintiff’s
current and prospective customers) that stated that the US
govt tested the two companies’ products, and that pl’s
products were only 40% as effective as defendant’s.
Holding: statement invokes approval based on reputation of
This tort encompasses false statements regarding the
character of another’s business.
Restatement (Second) of Torts Elements:
One who publishes a false statement harmful to the interests of
another is subject to liability for pecuniary loss resulting to the
other if:
(1) he intends for publication of the statement to result in
harm to the interests of the other having a pecuniary
value, or either recognizes or should recognize that it is
likely to do so; and
(2) he knows that the statement is false or acts in reckless
disregard of its truth or falsity. (actual malice).
Elements
(1) publishes a false statement;
(2) that is harmful to the interests of another;
(3) publisher intends to harm or recognizes (or should
recognize) that statement is likely to harm pecuniary
interests of another; and
(4) publisher knows that the statement is false or acts in
reckless disregard of its truth or falsity
(5) special damages

Is subject to liability for the pecuniary loss resulting
to the other as a result of publishing such statement.
Publication of false statements regarding another’s
property rights in land, chattels or intangibles
Iowa Elements of Slander of Title
(1) the uttering or publication of slanderous words (oral or in
writing) to a third party (not one being defamed);
 IA exception (unless that person has a strong
compulsion to disclose the defamatory statement to third
parties, that was reasonably foreseeable to the
wrongdoer, and such disclosure was actually made)
(2) where the words are false;
(3) where the words are malicious (not made in good faith,
founded on probable cause, or prompted by a reasonable
belief in their truth);
(4) plaintiff sustained special damages; and
(5) plaintiff has an estate or interest in the real or personal
property slandered.
Publication of a false statements disparaging the quality of
another’s land, chattels or intangibles.
Iowa Elements of Trade Libel
(1) the uttering or publication of slanderous words (oral or in
writing) to a third party (not one being defamed);
(2) where the words are false;
(3) where the words are malicious (not made in good faith,
founded on probable cause, or prompted by a reasonable
belief in their truth);
(4) plaintiff sustained special damages; and
(5) plaintiff has an estate or interest in the real or personal
property slandered.
Puffery
(1) A statement which takes the form of an unfavorable
comparison of products, or which “puffs” or exaggerates
the quality of one’s own product, is not ordinarily
actionable.
4
third party (i.e. US govt), its actionability increases.
Fitness World West
Holding: improper for 7 Flags to tell prospective members that
FWW would close by the end of February, were trying to get
cash before closing, and their employees were looking for new
employment
(2) Where statement is an assertion of fact, the truth/falsity
of which is ascertainable, its falsity is actionable.
(3) Conversely, if statement is an opinion, the truth/falsity of
which is difficult to ascertain, the statement is puffing and is
not actionable.
i.e. “my product is better than his.”
JC Penny
Holding: improper to say another’s merchandise is “either
poorly made second made or prison made merchandise” w/
“slovenly seams”
Lake Mullack
Holding: Improper for a Chrysler dealership to say that the
Chevy dealership had closed and it would provide service for
Chevys
Iowa Cases:
Covenants Not to
Compete
AAA Case
Holding: Unprovable from hotel’s records that their demise was
proximately caused by AAA withdrawing their approval and not
from the construction of new hotels in the area. No proof of how
many AAA customers had previously stayed there.
COVENANTS NOT TO COMPETE
A clause in an employment contract which stipulates that an
Presto-X-Company v. Ewing (Iowa 1989)
employee will not, after leaving, compete with the latter for a
Facts
(1) Pest-control employment K had 2 year covenant not to
specified period of time in a specified geographic area.
compete stating.
Designed to protect proprietary information from being used
(2) Contained damages clause providing for loss of profits and against the employer
an injunction.
(3) Pl violated 14-day notice of termination clause and fired
Covenants Not to Compete will be enforced if the covenant:
def for having too many accidents in company vehicles
(1) is reasonably necessary for the protection of the
(4) Def solicited pls clients.
employer’s business;
 Reasonableness is usually judged by an analysis of the
Holding
Breach of covenant not to compete and injunction is
time and area restrictions, which must be narrowly
appropriate remedy. “Unclean hands” is irrelevant as to
limited in scope to further only the protection
whether covenant was reasonable.
necessary to the former employer.
 Analysis of Covenant’s Reasonableness: Iowa Glass
Iowa Glass Depot, Inc. v. Jindrich (Iowa 1983)
 Level of particularized training or expertise of
Facts: Part-way through his employment, def was asked to
def
sign a covenant not to compete. After 11 years, def voluntarily
 Type of business: ie route, specific set of
resigned and 1 year later started competing glass co servicing
customers, regular basis, walk in.
some of pls customers.
 Nature of solicitation: did it occur while def was
Holding: Covenant not to compete unreasonable
still employed by pl
Analysis
 Stealing of customer lists, trade secrets,
Continued employment for an indefinite period of time is
proprietary or confidential information, or other
sufficient consideration to support a covenant not to compete.
knowledge peculiar to plaintiff’s business
Court must balance the interests of the company in protecting
 *companies that employ route salesman are
its business with the interest of defendant in exercising his
particularly vulnerable
rights to find new employment.
(2) is not unreasonably restrictive of the employee’s rights;
and
Uncle B’s Bakery, Inc. v. O’Rourke (N.D. Iowa 1996)
 Right of employee to obtain new employment, sustain
Facts: Defendant violated covenant not to compete and began
a living, provide for family, etc.
managing competing Brooklyn Bagel Boys plant, where he
 Narrow in geographic scope and duration. 1 year ok. 2
disclosed plaintiff’s trade secrets.
years arguable. 3 years too long.
Holding: Covenant violated.
(3) is not prejudicial to the public interest.
Analysis: Injunction issued primarily on disclosure of trade
 Interest in maintaining capitalistic economy of free
secrets, however def could work for a division of Brooklyn
market and competition.
Bagel Boys that didn’t involve making bagels.
Aries Information Systems, Inc. v. Pacific Management
Systems Corp. (Minn. 1985)
Damages include:
(1) temporary or permanent injunctive relief;
5
Facts
(1) Pl manufactured accting software for govt institutions, such
as school districts, etc.
(2) 3 employees duplicated the software while working for pl
and founded competing company in violation of covenant
not to compete
Holding: Covenant violated. Misappropriation of trade
secrets. Injunction issued.
Insurance Bad
Faith Generally
Insurance Bad
Faith Cases
Trespass to Land
Types of Nuisance
(2) actual damages accounting for lost profits (at the discretion
of the court).
Note
Many states including IA have trade secrets law so covenant
not to compete would not be necessary to have a cause of
action. Difficult cause of action in IA with high burden and
complicated elements including measures taken to protect
privacy.
Mustards v. Tavern
sauce man stole the recipe when he changed jobs
trade secret was out of the barn so damages were appropriate
instead of injunction
INSURANCE BAD FAITH
Insurance co has a duty to approach settlement opportunities as if there were no policy limits.
Insurance Company’s power to control defense carries with it the duty to settle claims without litigation in appropriate cases
because the insured is liable for any excess liability above the policy limits. Must communicate settlement offers to plaintiff.
Must investigate the facts and prepare for the case.
Elements of Insurance Bad Faith:
(1) claimant makes special demand for settlement;
(2) insurance company rejects demand in bad faith;
(3) rejection was proximate cause of claimant’s damages;
(4) nature and extent of such damages.
Kooyman v. Farm Bureau Mutual Insurance Company (Iowa 1982)
Facts:
(1) Pl was a child hit by a car while existing school bus.
(2) Pl settled with the bus driver and the school district and proceeded against driver.
(3) Drivers policy limits were $25,000; verdict was expected to be around $1,000,000.
(4) Plaintiffs offered to settle for $100,000, which insurance co refuse w/out notifying pl.
(5) Jury issued a verdict in excess of the driver’s policy limits.
(6) Driver assigned bad-faith representation claim to plaintiffs who sued the insurance company for failing to settle.
Holding: Insurance bad faith.
Analysis
(1) Insurance co has a duty to approach settlement opportunities as if there were no policy limits
 It was obvious that driver was liable so settlement was in his best interests. However, once $25,000 limit was reached,
which it was certain to, insurance company decided to take its chances.
(2) Evidence showing insurance co’s lack of prep and indifference towards trial is evidence of bad faith.
 Insurance company refused to pay for depositions of other defendants and only conducted one deposition on its own.
(3) Evidence of insurance company’s failure to negotiate in good faith, and failure to inform insured of settlement offers (and
consequences of not settling) is also evidence of bad faith.
 Insured was never informed of the $100,000 settlement offer, was never informed of consequences of not settling, and also
insurance company was rude and did not negotiate in good faith.
NUISANCE
Trespass to Land is Not a Form of Nuisance
This cause of action protects a landowners right to exclusively possess their land and occurs when def physically break the close
of another’s right to exclusively possess a parcel of land.
Private Nuisance: An unreasonable interference with the use or enjoyment of a property interest in land.
Public Nuisance
(1) An unreasonable interference with a right common to the general public.
(2) When determining whether such interference is unreasonable, consider the following:
(a) whether the conduct involves a substantial interference with the public health, the public safety, the public peace, the
public comfort or the public convenience;
(b) whether the conduct is proscribed by statute, ordinance, or administrative regulation;
(c) whether the conduct is of a continuing nature or has produced a permanent or long-lasting effect and, to the actor’s
knowledge, has a substantial detrimental effect upon the public right.
Nuisance per se (at law): an act, occupation or structure which is a nuisance at all times and under any circumstances, regardless
of location or surroundings. A lawful operation can never be a nuisance per se.
6
Remedies for
Nuisance
Coming to the
Nuisance
Cases: Private
Nuisance
Nuisance per accidens (in fact): those which become nuisances by reason of their location, or by reason of the manner in which
they are constructed, maintained, or operated.
(1) A private nuisance per accidens may be created or maintained w/out negligence. Morgan.
(2) Most private nuisances are intentionally created or maintained.
*Not intent to harm, but intent to act.
(1) Traditional Rule: whenever a nuisance was found, an injunction was granted.
(a) Did not take into account grave disparity between the harm of the nuisance and the cost of the injunction.
(2) Modern Rule: when a nuisance is found, an injunction can be avoided by making the defendant pay the plaintiff permanent
damages to continue the nuisance. Boomer
(a) Used in situations where the cost of the injunction far outweighs the harm caused by the nuisance.
(b) Permanent damages are measured by the value of the property, as the continuance of the nuisance is seen almost as a
taking of the plaintiff’s property.
Maj. View: coming to the nuisance is irrelevant
Min. View: coming to the nuisance prevents recovery
Morgan v. High Penn Oil Company (1953)
Facts: Land and restaurant owner (P) claimed that for some hours on two or three days a week, def’s refinery emitted nauseating
gases and odors in great quantities in such density as to render persons of ordinary sensitiveness uncomfortable and sick.
Holding
A private nuisance per accidens may be created or maintained w/out negligence.
Carpenter v. The Double R Cattle Company, Inc. (1985)
Facts: After expansion of feedlot, there was a vast increase in the spread and accumulation of manure, pollution of the river and
ground water, odor, insect infestation, concentration of birds, dust, noise, etc.
Holding: No nuisance
Analysis
(1) Idaho law states that in a nuisance action seeking damages, the interest of the community, which would include the utility
of the conduct, should be considered in the determination of the existence of a nuisance.
(2) Idaho is sparsely populated and its economy depends largely upon the benefits of agriculture, lumber, mining, industrial
development, etc.
Dissent:
(1) A few should not be forced to incur the costs of the benefits to many.
(2) If the utility of the nuisance is high, and the nuisance is continuing, those few who live around it should be justly
compensated.
Winget v. Winn-Dixie Stores, Inc. (1963)
Facts
Pls sued def grocery store for nuisance, re air conditioning unit blowing against trees and shrubs, floodlights in a bedroom
window, obnoxious odors from garbage, and trash blowing into their yard. Pls alleged that both its location and manner of
operation were unreasonable.
Holding: Nuisance
Analysis
(1) The location of the grocery store cannot be deemed a nuisance b/c it is lawfully located in compliance with all zoning
requirements.
(2) However, the fact that one has been issued a license or permit to conduct a business at a particular location cannot protect the
licensee who operates the business in such a manner as to constitute a nuisance.
*decrease in property values is not a nuisance, only interference with use and enjoyment is a nuisance
Boomer v. Atlantic Cement Company, Inc. (1970)
Facts: Pl sued cement plant for private nuisance due to the air pollution (dirt, smoke, vibrations) emanating from the plant.
Holding: When a nuisance is found, an injunction can be avoided by making the defendant pay the plaintiff permanent damages
to continue the nuisance.
Analysis
(1) Air pollution is a matter of public concern that should be dealt with by the legislature.
(2) Cement plant is very valuable to the public (it employs many and has a lot of money invested in it).
Spur Industries, Inc. v. Del E. Webb Development Company (1972)
Facts: Def operating cattle lot 15 mi. west of urban Phoenix since before 1950. In 1959 pl began housing dvlpment btw Phoenix
and cattle lot which expanded to w/in 500 feet of def’s cattle lot by 1967. Ppl who bought homes from pl began to complain and
pl filed private nuisance suit.
Holding: “Coming to the nuisance” doctrine does not prevent injunction in this case b/c of the number of people affected.
The harm caused far outweighs the cost of the injunction.
7
Public Nuisance
Types of
Misrepresentation
Analysis
Because plaintiff is responsible for bringing people to the nuisance, plaintiff is forced to indemnify defendant for the costs
incurred in moving or shutting down the facility. It was foreseeable that defendant’s expansions would eventually bring about
this problem.
Bormann v. Kossuth County (1998)
Facts: large hog confinements created a nuisance to adjoining property owners through their odor
Holding: Court held that Iowa’s statutory immunity against nuisance suits for hog confinements in agricultural zones amounted
to a unconst’l taking
*lawsuit encourages Iowa State University to develop a method to reduce the smell of hog confinement operations
Philadelphia Electric Company v. Hercules, Inc. (1985)
Facts:
In 1971 PICCO polluted the land and then sold it to Gould; in 1974 Gould sold land to PECO (Pl);
After 1974 Hercules (def) became successor to PICCO (assuming all debts, obligations and liabilities).
In 1980 PA Dept of Enviro Resources discovered pollution seeping into Delaware River and directed PECO to develop and act on
plan to eliminate the situation (resulting in a total cost/loss of $40,000 to PECO).
PECO sued Hercules for damages and injunction requiring Hercules to abate any further pollution from land.
Holding: Nuisance is for neighbors, not purchasers.
PICCO/Hercules (original owner) is not liable to PECO (subsequent purchaser) for the creation of the nuisance on the site.
Analysis
(1) It is assumed that PECO had the opportunity to inspect the property before purchasing, and that the price paid reflected
potential economic problems.
(2) PICCO/Hercules, as the creator of the nuisance, could however be liable to the owners of the adjoining property affected by
the nuisance.
(3) PECO does not have standing to assert a public nuisance claim against PICCO/Hercules.
 The public right that was interfered with was the right to pure water in the Delaware River
 The pecuniary harm that pl suffered did not amount to a public nuisance b/c it was only suffered by them and not the
general public
 PECO had a problem with the condition of the land, which was not the result of the pollution, but rather, the cause of the
pollution.
MISREPRESENTATION
Fraudulent Misrepresentation
(1) defendant made representation to plaintiff;
(2) representation was false;
(3) representation was material;
(4) defendant knew representation was false;
(5) defendant intended to deceive plaintiff;
(6) plaintiff acted in reliance on truth of representation, and was justified in doing so; (reasonable person standard)
(7) representation was proximate cause of plaintiff’s damage; and
(8) amount of damage.
Negligent Misrepresentation:
(1) defendant negligently supplied false representation to plaintiff;
(2) defendant had financial interest in supplying such information;
(3) defendant intended to supply information for benefit and guidance of plaintiff;
(4) defendant intended information to influence the plaintiff’s actions;
(5) plaintiff acted in reliance on truth of information, and was justified in doing so;
(6) negligently supplied information was proximate cause of plaintiff’s damages;
(7) amount of damage.
Foreseeability Elements
(1) if you have a duty to give correct information, there is an actionable cause
(2) must have knowledge or equivalent that the information desired is for a serious purpose, intends to be relied and acted upon,
and if false or erroneous will be cause of injury to party or person
(3) relationship of parties arising out of a K or otherwise must be such that in morals and good conscience the one has the right to
rely upon the other for info
*Fiduciary relationship weighs heavily in favor of finding justifiable reliance.
8
Justifiable
Reliance
Cases:
Concealment/NonDisclosure
One is never justified in relying on:
(1) Obviously false statements if the falsity could be discoverable by ordinary observation
(2) One is never justified in relying on opinion as opposed to statements of fact
(3) One is not justified in relying on legal advice provided by lay person
(4) Speculations or predictions
Swinton v. Whitinsville Savings Bank (1942)
Facts: Def knowingly withheld the fact that the house he was selling was infested with termites. Pl exercised reasonable care in
inspecting house and still was unaware of problem.
Holding: No liability imposed for mere concealment or failure to disclose in absence of a fiduciary relationship b/w the
parties. Termite problem is within the range of a buyer’s awareness.
Griffith v. Byers Construction Company of Kansas, Inc. (1973)
Facts: Def sold lots in a residential development to vendors who then contracted to sell the lots and build houses on them to
plaintiffs. Def knowingly withheld the fact that the soil contained saline and could not grow grass.
Holding: Purchasers may recover on the theory of fraud from a vendor/builder for nondisclosure of defects considered material to
the transaction. Saline problem is not within the range of a buyer’s awareness.
Analysis: Privity is not a problem here, b/c plaintiffs were in the class of persons reasonably foreseen and expected to be
affected by the non-disclosure.
Liability to the
Recipient for
Misrepresentations
Stambovsky (fraudulent misrep where seller of a house in Nyack, NY concealed fact that house was haunted)
Derry v. Peek (Eng. 1889)
Def falsely represented in a prospectus govt gave them the right to use steam-powered engines on the tramway. Based on this
representation pl bought stock. Govt did not consent to steam power. Suit for fraudulent misrepresentation.
Holding: Pl does not have to demonstrate that misrep was made with the motive/intent to harm pl.
Analysis
Pl must show that a false representation has been made:
(1) knowingly; (2) without belief in its truth; or (3) recklessly and carelessly as to its truth. (4) pl had reasonable grounds and lack
of knowledge for believing/relying upon such statement.
International Products Company v. Erie Railroad Company (1927)
Facts: Importer (P) was expecting valuable shipment of goods and arranged for def to receive and store for reshipment. Pl asked
def which dock the goods were on so he could purchase insurance and was told the wrong dock. Insurance was purchased for the
wrong dock. A fire destroyed the goods and pl was unable to collect. Sued for negligent misrepresentation.
Holding: Def had a duty to give correct information
Analysis
Negligent misrepresentation where the speaker has a duty to give correct information requires
(1) knowledge that the information is requested for a serious purpose;
(2) that receiver of information intends to rely on it;
(3) if information is false, receiver will be damaged/injured;
(4) some form of fiduciary/contractual relationship b/w the parties. i.e., a stranger cannot be held liable for negligent
misrepresentation.
Winter v. G.P. Putnam’s Sons (1991) (Mushroom case)
Facts: Pl sued publisher of “Encyclopedia of Mushrooms” when incorrect info about which mushrooms were safe almost caused
him to die
Holding: Publishers have no duty to investigate the accuracy of the contents of books that they publish. Thus, publishers are
not liable for the misrepresentations contained therein.
Analysis
To impose such a duty would create a chilling effect of the publication of ideas under the First Amendment.
Soldier of Fortune (Exception to Mushroom Rule)
Facts: classified ad of “gun for hire”
Holding: publisher can be held liable if an ad they accept would alert a reasonable publisher to a risk of harm to the public
Hanberry v. Hearst Corp. (1969)
Facts: Pl purchased pair of shoes that caused her to slip and fall on the vinyl floor in her kitchen. Good Housekeeping had given
such shoes a “seal of approval” as being “good ones”.
Holding: A third party who holds itself out to the public as possessing superior/special knowledge and endorses a product
for the purpose of inducing/encouraging the public to purchase them, has a duty of care to its readers to represent their
condition accurately. Here the seal of approval was a warranty or representation that the product was of quality.
Richard v. A. Waldman and Sons, Inc. (1967)
9
Facts: Def innocently, but falsely, represented to pl that the southern boundary line of property he was selling extended 20 feet
further than it actually did. Consequently, pl trespassed onto the adjoining property every time that he stepped out his back door.
Holding (Minority Rule): allows a cause of action for innocent misrepresentation (made without negligence or intent to defraud)
as long as declarant knew, should have known, or had the duty to know, the truth
Arthur Murray Dance Studio (studio liable for fraudulent misrep where they: exploit position of trust; lie to old woman by telling
her she could be a professional ballroom dancer in order to sell her 4,000 hours worth of dance instruction for $33k)
Liberty Nat’l Life (insurer liable for fraudulent misrep where they instruct agents to switch client from policy w/ no limits into a
different policy w/ limits by telling them it is a new policy with new benefits. $1m punitive damages.)
Liability to a Third
Party for
Misrepresentations
Croyle v. Moses (pl wins fraudulent misrep case where he buys a horse based on misrep that it is in perfect heath and in turns out
to be a windsucker and a cribber)
Credit Alliance Corp. v. Arthur Andersen & Company (1985)
Facts: Accting firm negligently prepared certified financial reports for the pl which the pl provided to third parties upon request.
Holding: Privity b/w defendant and third parties is not required for negligent misrepresentations. However, the cause of action
requires a relationship “so close as to approach that of privity” and it is not proven here.
Analysis
(1) Defendants did not prepare the financial statements for the plaintiff for the purpose of providing them to third party financers.
(2) Defendants had no relationship/contact whatsoever with the third parties involved.
Citizens State Bank v. Timm, Schmidt & Company (1983)
Facts: Accting firm prepared financial statements for clients of pl’s bank which pl relied on in giving loans. Accting firm did not
have knowledge that bank relied on financial statement in this way.
Holding: Privity between an accting firm and third parties who rely on their misstated financial reports is not required.
However, liability is limited to third parties that incurred injuries that were reasonably foreseeable to the accting firm at the
time reports were prepared.
CPA Liability to
Third Persons
Reliance
Ultramares Corp. v. Touche, Niven & Company (1931) (Granddaddy CPA liability case)
Facts: Accting firm negligently prepared financial records for Fred Stern & Company which were then given and relied upon by
the third-party plaintiff.
Holding: No showing of any form of privity is required between an accounting firm and third parties in situations where
fraudulent misrepresentation is the result of gross negligence. Gross negligence is sufficient to support an inference for fraud.
Newest Rule: Liability attaches to CPA firms on ordinary principles of negligence. Accountants are liable to third parties
(where there’s reliance, but no privity) for negligently prepared financial reports when:
(1) Accountants must have been aware that the financial reports were to be used for a particular purpose(s);
(2) In furtherance of which, a known party intended to rely; and
(3) There must have been some conduct on the part of the accountants linking them to the party, which evinces the accountants’
understanding of that party’s reliance (“circumstances approaching privity”).
Williams v. Rank & Son Buick, Inc. (1969)
Facts: Def incorrectly told pl a car had AC. After test-driving it for 90 mins pl purchased the car.
Holding: One cannot justifiably rely on obviously false statements or statement of which the falsity could have been detected
by ordinary observation (reasonable person in plaintiff’s shoes standard).
Saxby v. Southern Land Company (1909)
Facts: Def told pl that land was “about 150 acres in timber, with about 20 acres burned over.” In reality, there was 120 acres of
timber, with 60 acres burned over.
Holding: In order to be actionable a misrepresentation must be of an existing fact, and not the mere expression of an
opinion.
Vulcan Metals Company v. Simmons Manufacturing Company (1918)
Facts:
Pl took over def’s vacuum clmnfctg business. Def said vacuums were “perfect in every way” and had
“never been on the market before”
Holding: Statement that vacuum’s had “never been on the market before” was a false statement of fact and thus, actionable.
Analysis
(1) Generally speaking, misrepresentations as to the quality and value of a product (puffs) are not actionable.
(2) Puff may be actionable in situations where the two parties are not equals (i.e., a chemist talking to a layperson).
Sorenson v. Gardner (1959)
Facts: Seller misrepresented that house met all minimum zoning requirements, particularly with respect to electric wiring,
10
plumbing, septic tank and sewage disposal arrangement.
Holding: Misrepresentations of the law (or of legal effects of certain actions) are deemed to be facts, and thus are actionable.
Statute of Frauds
Damages
Sexual Harassment
Statutes
Quid Pro Quo
Hostile Work
Environment
McElrath v. Electric Investment Company (1911)
Facts: Def who leased hotel to pl told pl that the RR would have train to Minneapolis in the near future
Holding: Misrepresentation that the railroad would be completed and would travel through the resort is actionable.
Analysis
(1) Generally, false representations, in order to be actionable, must be of existing facts, and cannot consist of mere promises
or conjectures as to future acts or events.
(2) However, if through the misrepresentation the defendant intended that the pl believe that it was a fact, and the pl
reasonably understood it as fact, the misrepresentation is actionable.
Burgdorfer v. Thielemann (1936)
Facts: Plaintiff agreed to buy two lots on the oral promise that defendant would pay off the mortgage on one of the lots.
Holding: statute of frauds does not apply in tort actions. Thus testimony of promise is meant to prove fraud, not to show
existence of contract.
Hinkle v. Rockville Motor Company, Inc.
Facts: Car dealer misrepresented that car was new, when in reality it had over 2,000 miles on it and it had been in a prior
accident.
Holding: Benefit of the bargain approach to damages is employed.
Analysis
Damages for fraud can be based on one of two theories:
(1) “out of pocket loss” theory – defendant is entitled to recovery the difference between the price paid and the actual value.
 Here, the amount he paid for the car minus its actual value.
(2) “benefit of his bargain” theory – defendant is entitled to recover the difference between the value as represented and the
actual value.

Here, the amount the car was worth as represented minus its actual value
SEXUAL HARASSMENT
Title VII of the Civil Rights Act of 1964
(1) Makes it unlawful employment practice for an employer to discriminate against any individual with respect to his
compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or
national origin.
(2) Affords employees the right to work in an environment free from discriminatory intimidation, ridicule, and insult.
(3) Applies to “Employers” – anyone with 15 or more employees, and any agent thereof.
(4) Quid Pro Quo and Hostile Work Environment Sexual Harassment are Actionable under Title VII:
State Civil Rights Statutes: mini Title VII’s w/ pretty much identical wording apply to state gov.
Quid Pro Quo is individual harassment involving demands for
Munford v. James T. Barnes and Company (1977)
Facts: Pl was fired for refusing sexual advances from her
sexual favors with the threat of adverse consequences if
immediate supervisor, including a business trip on which she
demands are refused (demotions, firing, etc.).
was supposed to share a motel room and have sex with him.
She reported this to his boss, who supported the supervisor the
Elements:
whole way.
(1) employee belongs to a protected group;
Holding: An employer may be liable under Title VII for the
(2) employee was subject to unwelcome sexual harassment;
discriminatory acts of its agents or supervisory personnel if it
(3) harassment complained of was based on sex;
(4) employee’s reaction to harassment complained of affected
fails to investigate complaints of sexual harassment.
tangible aspects of the employee’s compensation, terms,
Analysis
(1) An employer has an affirmative duty to investigate
conditions, or privileges of employment.
complaints of sexual harassment and deal appropriately
 Must show that acceptance/rejection of harassment was
with the offending personnel.
an express or implied condition to the receipt of a job
(2) Failure to investigate is deemed to be tacit encouragement
benefit or the cause of a tangible job detriment in
of such behavior.
order to create liability under this theory.
(5) respondeat superior:
 An employer is strictly liable for its employees quid pro
quo sexual harassment even without employer
knowledge.
Hostile Work Environment is a work place uncomfortable to a worker b/c of sexually explicit jokes, lewd cartoons, etc.
Elements:
(1) employee belongs to a protected group (woman)
(2) employee was subject to unwelcome sexual harassment;
 Employee must not solicit or incite it.
(3) harassment complained of must have been based on sex;
11
 Plaintiff must show that but for the fact she was a woman, the conduct would not have occurred – i.e., must show that men
were not harassed in the same way.
(4) employee’s reaction to harassment complained of affected a term, condition, or privilege of employment.
 Must be sufficiently pervasive so as to alter the conditions of employment and create an abusive working environment
(based on the totality of the circumstances).
(5) respondeat superior: Must show that employer knew or should have known of the harassment in question and failed to take
prompt remedial action.
Iowa Civil Rights Act
Where sexual harassment in the workplace is so pervasive and severe that it creates a hostile or abusive work environment, so that
plaintiff must endure an unreasonable offensive environment or quit working, the sexual harassment affects a condition of
employment actionable under the Iowa Civil Rights Act.
Hostile Work
Environment
Elements Under the Iowa Civil Rights Act
In order to establish a valid claim of maintenance of a sexually hostile work environment through sexual harassment, it must be
proven that:
(1) the plaintiff belongs to a protected class;
(2) the plaintiff was subject to unwelcome sexual harassment;
(3) the harassment was based upon sex;
(4) the harassment affected a term, condition or privilege of employment; and
(5) the employer knew or should have known of the harassment and failed to take prompt and appropriate remedial action.
Meritor Savings Bank v. Vinson (SCT 1986)
Facts: Pl sued for sexual harassment on the basis that her supervisor: demanded sexual favors from her (to which she complied
voluntarily out of fear); that he sexually assaulted her; and groped her at work (sometimes in front of other employees).
Holding: The gravamen of any sexual harassment claim is that the pl alleged sexual advances are “unwelcome”. “Voluntariness”
(unforced participation) is NOT the correct standard.
Analysis
Recognized hostile work environment cause of action. For sexual harassment to be actionable, it must be sufficiently severe or
pervasive to alter the conditions of the victim’s employment and create an abusive and hostile work environment.
Barrett v. Omaha National Bank (8th Cir. 1984)
Facts: Pl was inappropriately touched by co-worker on the way to a seminar in presence of supervisor. Pl reported the incident
and the co-worker and supervisor were immediately reprimanded.
Holding
(1) Non quid pro quo sexual harassment by a co-employee is not a violation of Title VII unless the employer knew or should have
known of the harassment and failed to take immediate and appropriate corrective action.
(2) The law does not require the employer to fire the harassers, the employer must simply take prompt remedial action reasonably
calculated to end the harassment.
Lynch v. City of Des Moines (Iowa 1990)
Facts: Pl was female police officer in Des Moines. Two male co-workers often made crude sexual comments and harassed her.
Her immediate supervisors did nothing when she complained until eventually the Chief of Police stepped in.
Holding: Rejects notion that only cases involving the loss of a tangible job benefit are actionable under the Iowa Civil Rights
Act.
Klink v. Ramsey County (Minn. App. 1986)
Facts
Police station dispatcher sued under Minnesota Civil Rights Act for sexual harassment based upon creation of a hostile work
environment because she overheard foul language and inadvertently viewed objectionable materials on a sporadic basis.
Holding: This situation is not severe or pervasive enough to constitute a violation of Title VII.
Analysis
(1) Foul language was used in private offices and was not directed at plaintiff;
(2) Obscene materials were kept in offices, desk drawers or lockers, and plaintiff was not invited to possess or view them.
Burlington Industries v. Ellerth (U.S. 1998)
Pl sued for sexual harassment due to the actions taken by a regional supervisor in threatening/hinting that she would be fired if
she did not “loosen” up. No actual employment action was taken, mere hints/subtle threats. Consequently, she quit, but did not
tell the company of any of this until 3 weeks later.
Holding:
When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability upon a
showing that:
(1) the employer exercised reasonable care to prevent and correct promptly the sexually harassing behavior; and
12
(2) plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the
employer or to avoid harm otherwise.
Sexual Harassment
Bonus Cases
Katz v. Dole (4th Cir. 1983)
Facts: FAA employee was subjected to a hostile work environment.
Holding: In a hostile work environment case, in order to hold the employer liable, plaintiff must show that employer knew or
should have known of the harassment, and took no effectual action to correct the situation.
Postal Service (Supervisor of Denver Post Office was fired for sexual harassment of 6 women. “I’m Italian” defense failed)
Correro (housing project supervisor created a hostile work environment by kissing his employee on the neck)
Veterans Administration (supervisor awarded a job based on his receipt of sexual favors. VA ratified his conduct by not
disciplining him.)
Air Traffic Control (hostile work environment  women was told the problem might be solved if she submit to the sexual
demands)
E. Chicago Fire Department (punishment for not being a model employee cannot be sexual harassment)
Lusty Libido (plaintiff lost suit for sex harassment where she made plenty of sexual offers herself and some were accepted)
Constructive
Discharge
Slander per quod
Slander per se
Libel per quod
Iowa State Professor (female college student assumed professor was socially inept as he constantly harassed her about sleeping
with him. $3 million judgment.)
Henson v. City of Dundee (11th Cir. 1982)
Facts: Pl was a police dispatcher who alleged that she was harassed by the police chief in the following ways: (1) he constantly
subjected her to inappropriate sexual comments; (2) he constantly asked her to have sex with him; (3) he refused to help her get
appointed to the Police Academy unless she slept with him.
Holding: Constructive Discharge is a violation of Title VII and occurs when an employee involuntarily resigns in order to
escape intolerable and illegal employment requirements to which she is subjected because of her sex.
DEFAMATION
Shor v. Billingsley (N.Y.S.C. 1956)
Slander per quod is spoken defamation which requires
Defamatory statement over a nationwide radio telecast
reference to facts, circumstances or innuendo in addition to
brings about cause of action resting in libel (not slander),
the words complained of to establish the necessary
regardless of whether the statement is read from a script or ad- defamatory meaning.
libbed.
Elements of Slander per quod:
Minority Rule: most statutes now hold that proper cause of
(1) Words require reference to facts, circ. or innuendo to
action is slander.
establish defamatory meaning.
(2) Proof of actual damages is required.
Terwilliger v. Wands (N.Y. App. 1858)
Facts: Def stated that the plaintiff was sleeping with Mrs.
Fuller, whose husband was in jail, and that plaintiff would do
anything to keep him in jail.
Holding: In order to recover for slander per quod, plaintiff
is required to prove special damages which arise out of, or
are causally related to, the injury to his reputation/character.
Analysis: Plaintiff only claimed that he became physically ill,
which has nothing to do with the way the statement affected
the third party view of his reputation/character.
Cowman v. LaVine
Slander per se is spoken defamation where the words
Statements that plaintiff was a convicted felon, had violated
complained of taken alone, by themselves defame the
parole, and had gone AWOL constitute slander per se.
plaintiff.
Analysis
Elements of Slander per se:
Slander per se: Spoken statement injures plaintiff in his
(1) Words alone constitute defamation;
business or trade (e.g., calling a lawyer a shyster, a doctor a
(a) words which impute criminal conduct;
butcher, a chauffer a drunk); imputing a loathsome disease
(b) words which impute a loathsome disease;
(leprosy, STDs); imputing unchastity to a woman; imputing
(c) words which impute unchastity;
to the plaintiff a crime of moral turpitude/serious sexual
(d) words which injure one in his trade or business.
misconduct
(2) Malice is presumed
(3) Proof of actual damages is NOT required.
Philadelphia Newspapers v. Hepps (it is the plaintiff’s burden
Libel per quod: written or graphic defamation
to prove that the statement is false)
Elements of Libel per quod:
13
(1) Words require reference to facts, circ., or innuendo to
establish defamatory meaning.
(2) Proof of actual damages required.
(3) Malice must be established by clear and convincing proof.
Libel per se
Libel vs. Slander
Elements of
Defamation
Cases:
Identification
Libel per se is written or graphic defamation
Elements of Libel per se:
(1) Words alone constitute defamation; on face, words are injurious to plaintiff’s reputation.
(2) Proof of actual damages NOT required.
(3) Malice is presumed.
(1) Permanence: the more permanent = libel; the less = slander
(2) Breadth of Publication: the larger = libel; the smaller = slander
(3) Degree of Premeditation: more so = libel; less so = slander
(4) The Restatement considers broadcasts libel; some states make broadcasts slander by statute
Defamation: any false statement that tends to bring one into public hatred, contempt, or ridicule; or cause one to be shunned or
avoided; or injures one is his/her trade or business.
Elements:
(1) Identification
(a) Proof that a third party recognizes that the statement refers to the plaintiff.
(b) Generally, plaintiff will not succeed if he is a member of a large group has been defamed.
(2) Defamation
(a) False statement that is injurious to the plaintiff’s reputation.
(3) Publication
(a) Communication of the defamatory statement to a third party.
Neiman-Marcus v. Lait (S.D.N.Y. 1952)
Facts
Authors of a book made several false and defamatory statements about the employees of the plaintiff department store. It said
“most” of the salesmen are “fairies” and referred to the saleswoman as prostitutes much more generally.
Holding/Analysis
(1) Standing to sue issue arises in situations of classes/groups of plaintiffs who are defamed.
(2) Generally, where a large group/class is libeled, none can sue on their own behalf, even if the defamatory language is
inclusive of the entire group (all hooter girls are sluts).
(3) Conversely, where a small group/class is libeled, and the language is inclusive, any individual member can sue on
his/her own behalf.
 15 of 25 salesman can sue on their own behalf and behalf of the others; because the group is small; statement refers to
“most” (fairly inclusive); suit is proper.
 30 of 328 saleswomen cannot sue on their own behalf and behalf of the others; because the group is large and even
though the statement is fairly inclusive it doesn’t specify a segment. Therefore, saleswomen can sue on behalf of the
group, but not each individually.
Bindrim v. Mitchell (Cal. App. 1979)
Facts: Def who participated in nude-therapy program wrote a fiction novel about it which contained vulgar and untrue
descriptions. The doctor in the novel was psychiatrist (not psychologist) named “Simon Herford” whose physical description did
not even come close to matching that of the plaintiff.
Holding: Showing that three readers realized that the character depicted in the book was the pl and no one else conducted nude
therapy sessions was sufficient to show identification.
Analysis
The test is whether a reasonable person, reading the book, would understand that the fictional character therein pictured
was, in actual fact, the plaintiff acting as described.
Cases: Publication
KFC (too many KFC franchises for one to sue individually)
Economopolous v. A.G. Pollard Company
Facts: Def falsely and maliciously stated as follows to plaintiff: “you have stolen a handkerchief from us and have it in your
pocket.” The statement was made twice: once in English when no one was around and once in Greek when others were around
Holding: No publication. Its all Greek to me defense.
Carafano v. Metrosplash.Com, Inc. (9th Cir. 2003)
Facts An unknown person posted a profile alleging to be a popular movie star (pl) on defendant’s website. Profile contained
many false statements about plaintiff’s promiscuity.
Holding: Pursuant to federal statute, a provider of an interactive computer service shall not be treated as the publisher of
content on its website posted by others.
14
Ogden v. Association of the United States Army (D.D.C. 1959)
Single publication rule: The publication of a book, periodical, or newspaper containing defamatory matter gives rise to one
cause of action for libel, which accrues at the time of the original publication, and that the statute of limitations runs from that
date. * SOL is 2 years in Iowa*
Retraction
Deny the
Necessary
Elements are
Present
Provable Truth
Absolute Privilege
Qualified/
Conditional
Privilege
Iowa Bonus Case (where husband wrote “psycho” and “for breast implants” on the memo line of child support check court held
there was no publication b/c no one saw it but pl)
Plaintiff must demand a retraction as part of his duty to mitigate damages. A suitable retraction which is complete, unequivocal,
and comparably prominent will mitigate damages. A retraction that is demanded and refused is evidence of ill will.
DEFAMATION: Defenses
Belli v. Orlando Daily Newspapers, Inc. (5th Cir. 1967)
Facts: False story was published about Belli (King of Torts) with the following facts:
(1) Belli was a guest lecturer at a conference put by the Florida Bar Association who offered to paid his hotel bill.
(2) Belli and his wife then went out around Miami and charged hundreds of dollars of new clothes to the hotel room and FBA was
forced to pay the bill.
Holding
(1) Story constitutes one of the traditional categories of libel per se – it infers that Belli acted incompatibly with the standards
of an ethical lawyer.
(2) If there is at least one defamatory interpretation of the statement, the judge should allow the jury to decide which
interpretation was the one conveyed.
Grant v. Reader’s Digest Association (2d Cir. 1945)
Facts: Def published periodical which stated that lawyer (Pl) was recently a legislative representative for the MA Communist
Party.
Holding: Pl need not show that the statement would adversely affect the opinions of all or a majority of those exposed to it; pl
needs merely to show that it would adversely affect the opinions of some people exposed to it.
Analysis
Interest at stake in all defamation actions is the reputation of the person defamed and it is very conceivable that calling someone a
communist would adversely affect his reputation among some people.
Defendant can argue that the statement was not false and must
Kilian v. Doubleday & Company, Inc. (Penn. 1951)
prove by a preponderance of the evidence that that the
Facts
Prof had a book published containing papers from his class of
statement was not false.
disabled WWII vets. One of the papers stated that the Colonel
(Pl) was responsible for the cruel and unusual treatment of
many hurt soldiers and had been convicted for this. Pl was
actually convicted of neglect.
Holding
When asserting the affirmative defense of truth, it is
necessary to merely prove that the statement was substantially
true which cannot be done by general testimony that does not
corroborate any of the allegedly defamatory statements
Absolute privilege: Statements made during judicial, legislative, or public official proceedings by the participating parties.
The public interest requires some individuals be exempted completely from legal liability for what they say to insure the
fearlessness of those participating in the public’s business.
Sindorf v. Jacron Sales Company, Inc. (Maryland App.
Qualified privilege
1975)
Privilege enjoyed by the press, city and county government
Facts
officials, and for those private parties who in good faith
Upon resignation of pl def refused to pay pl sales
defame while attempting to advance a valid public or
commissions. Plaintiff then went to work for Tool Box. VP
private interest.
of def company called Pres of Tool Box and told him “a few
(1) A defamatory publication is conditionally privileged
cash sales and quite a bit of merchandise was not accounted
when the occasion shows that the communicating party
for” by pl and he suggested that Tool Box “watch your stock
and the recipient have a mutual interest in the subject
real, real carefully on trucks and things.”
matter, or some duty with respect thereto.
Holding: In this case, conversations between a former
(2) In order for a conditional or qualified privilege to apply,
employer and a new employer are privileged b/c they have a
the statement must be published in a reasonable
mutual interest in the work performance of the employee.
manner and for a proper purpose.
o
(3) The press can lose its privilege if there are errors in the
reporting or if malice on the part of the press can be
shown. Privilege is lost if the person acts in bad faith.
(4) In determining an abuse of privilege, all relevant
15
Fair comment/
criticism/opinion
Milkovich v. Lorain Journal Company (U.S. 1990)
Newspaper (def) published an editorial column stating that
wrestling coach at a local high school (pl), lied during sworn
testimony to an Ohio court regarding an incident between his
wrestling team and another local high school team.
Holding: held to be a statement of fact, even though it
appeared in sports section
Cherry Sisters (after performing parts of their show for the
court, the judge agreed that the statements were fair comment
of their terrible performance)
circumstances are admissible, including:
(a) the defendant’s reasonable belief in the truth of the
statements
(b) the excessive nature of the language used;
(c) whether the disclosures were solicited or
unsolicited; and
(d) whether the communication was made in a proper
manner and only to the proper parties.
Fair comment/criticism/opinion
Publication of defamatory matter that consists of comment and
opinion, rather than fact.
 Allows reviewers and critics to criticize books, movies,
etc.
Fact or Opinion Analysis
(1) What was the specific language used?
(2) Is the comment verifiable?
(3) General context of the statement?
(4) Broader context of the statement?
Opinion is defamatory if a reasonable jury could find that the
opinion implied a fact concerning the defendant and the
implied fact can be proven false
(1) Under Hepps, a statement of public concern must be
provable as false before liability may be imposed for such
statement.
 Thus true opinions, with no factual basis asserted in
them, are not actionable b/c they cannot be proven as
false.
(2) Under N.Y. Times, a statement on a matter of public concern
that reasonably implies false and defamatory facts regarding
public officials or figures must be made with knowledge of
falsity or reckless disregard of truth in order to be
actionable.
(3) Under Gertz, a statement on a matter of public concern
regarding a private figure must be made with some level of
fault in order to be actionable
Constitutional
Defense
New York Times Co. v. Sullivan (SCT 1964)
Facts: Ad was published in New York Times that narrated some of the rough treatment that MLK jr had received in Montgomery
by the Police Department. Much of the narration was false.
Holding: A public official cannot recover for a defamatory falsehood relating to his official conduct unless he proves that the
statement was made with actual malice.
St. Amant v. Thompson (SCT 1968)
Facts: St. Amant made a televised political speech in the course of which he read questions and answers from an interview with a
union member. The answers falsely charged Thompson, a deputy sheriff, with criminal conduct.
Holding: A showing of reckless disregard in the context of actual malice requires sufficient evidence to permit the
conclusion that the defendant in fact entertained serious doubts as to the truth of his publication. Very high standard.
Analysis
Reckless conduct in the context of actual malice is not measured by whether a reasonably prudent man would have published, or
would have investigated before publishing.
Harte-Hanks Communications, Inc. v. Connaughton (SCT 1989)
A month before a judicial election, the incumbent candidate’s director of court services was arrested on bribery charges.
During the grand jury investigation Harte-Hanks ran a front-page story quoting a grand jury witness that Connaughton (pl and
opposing candidate) had engaged in “dirty tricks” and bribed them in return for their help in the investigation.
Holding: Judges have constitutional duty to determine whether the record supports a finding of actual malice after the
jury finds as such. Finding of actual malice unmistakably supported here.
DEFAMATION: The Analysis
16
Defamation: The
Analysis
Public Figure
Private FigurePublic Concern
Private FigurePrivate Concern
(1) Is he a public official or a public figure?
(a) Types: public figure for all purposes (i.e.) Elvis; limited purpose public figures; those who voluntarily inject themselves
into a controversy; those few that inject themselves into controversy involuntarily
(b) A public official is prohibited from recovering damages for a defamatory falsehood relating to his official conduct unless
he proves that the statement was made with actual malice – knowledge that it was false or with reckless disregard of
whether it was false or not. NY Times v. Sullivan
 A showing of reckless disregard in the context of actual malice requires sufficient evidence to permit the
conclusion that the defendant in fact entertained serious doubts as to the truth of his publication. St. Amant
(2) Or is he a private figure?
(3) Is the speech of public concern?
(4) Or is the speech not of public concern?
New York Times Co. v. Sullivan (SCT 1964) (A public
Public Officials/Figures: malice required (NY Times)
official cannot recover for a defamation relating to official
(1) publication
conduct absent showing of actual malice)
(2) identification
(3) defamation
St. Amant v. Thompson (SCT 1968) (Reckless disregard in
(4) false (burden on plaintiff)
the context of actual malice requires sufficient evidence to
(5) malice
permit the conclusion that the defendant in fact entertained
serious doubts as to the truth of his publication.)
Gertz v. Robert Welch, Inc. (SCT 1974)
Private Person/Public Concern: no malice required (Gertz)
Facts: Newspaper published article that lawyer representing
however actual malice required to recover presumed/punitive
youth killed by Chicago police in civil rights action had a
damages
criminal record and was a communist, neither of which were
(1) publication
true.
(2) identification
(3) defamation
Holding
(1) In cases concerning a private figure the standard of liability (4) false (burden on plaintiff)
for defamation can be determined by each state, but must
(5) fault (normally negligence)
be based on some showing of fault – at least negligence
(i.e., strict liability for defaming a private person is
For a private figure to become a public figure, it must be
unconstitutional)
shown, either: (Gertz)
(2) presumed and punitive damages are only allowed upon a
(1) That the individual is a public figure for all aspects of his
showing of actual malice.
life:
(a) an individual may achieve such pervasive fame or
notoriety that he becomes a public figure for all
Philadelphia Newspapers, Inc. v. Hepps (U.S. 1986)
Facts: Philadelphia Newspapers, Inc. published false
purposes and in all contexts.
statements that principal stockholder of a corporation had links
(b) Must be clear evidence of general fame and notoriety
to organized crime and used such links to influence the state
in the community, and pervasive involvement in the
government.
affairs of society
(2) Individual is a public figure only in limited context
Holding: Where speech is of public concern, plaintiff has
associated with the defamation.
burden to prove that speech is false.
 It is preferable to reduce the public figure question to a
more meaningful context by looking to the nature and
extent of an individual’s participation in the
particular controversy giving rise to the defamation.
Private Person/Private Concern: no limitations aside from
Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc. (U.S.
common law requirements (Dunn & Bradstreet)
1985)
(1) publication
Facts
(1) D & B supplied confidential credit rating reports to
(2) identification
subscribers. It sent a false report to five subscribers
(3) defamation
indicating that Greenmoss had filed a voluntary petition for (4) False
bankruptcy.
(5) Presumed and punitive damages are allowed even absent a
(2) Error occurred b/c D & B sent a 17 year-old to review
showing of actual malice.
bankruptcy proceedings and failed to make routine checks
of accuracy afterwards.
Holding: Presumed and punitive damages are allowed even
absent a showing of actual malice when there is a private
figure and a speech of private (not public) concern.
17
ALL ADVANCED TORTS CASES
Improper VANTIN-i-nication
Clause
Vantine Studios v. Fraternal
Composite (1985)
Un-NESLER-sarry Suits are
Improper
Nesler v. Fisher & Co. (1990)
Third Hunting Party
Hunter v. Board of Trustees of
Broadlawns Medical Center
(Iowa 1992)
Here Punitives are REVERE-d
Revere Transducers v. Deere &
Co. (1999)
Some English Opera Gye
Lumley v. Gye (England 1853)
Stockyard Hatin: No
Eliminatin Bacon
Bacon v. St. Paul Union
Stockyards (1924)
Unethic-ADLER Improper
Jacker
Adler, Barish, Daniels, Levin
and Creskoff v. Epstein (1978)
The Midget Case
Brimelow v. Casson (1923)
Tort Pleas Can’t Help K
Freeman
Freeman & Mills v. Belcher Oil
Co.
Clark the Loan Shark
Clarke v. Figge (Iowa 1970)
Tommy Boy Case
Economy Roofing & Insulating
Co. v. Zumaris (Tommy Boy
Case)
Toyota Motor Conduct Kosher
Della Penna v. Toyota Motor
Sales, U.S.A., Inc. (1995)
Can Bloke Pass off a Coke
Coca Cola v. Doris House
Dis-in-Harmon
Harmon v. Harmon (1979)
Buckin the Barber
Tuttle v. Buck (Minn 1909)
Mennonite Church Torts
Mennonite Hardware Bonus
Case
Special RATCLages
Ratcliffe v. Evans (Eng. 1892)
Privilege to Slander Horning
Every Morning
Horning v. Hardy
Benzo Gas Spesh-O Gaffe
National Refining Co. v. Benzo
Gas Motor Fuel (Mo. 1927)
Government Testing Systems
Testing Systems v. Magnaflux
Corp. (1966)
Fitness World West
JC Penny
Lake Mullack
AAA Case
Dirty Hands Gave No Presto
Chang-O
Presto-X-Company v. Ewing
(Iowa 1989)
Iowa Glass Covenant Smash
Iowa Glass Depot, Inc. v.
Jindrich (Iowa 1983)
Uncle B’s Non-Compete
Uncle B’s Bakery, Inc. v.
O’Rourke (N.D. Iowa 1996)
Carpenter v. The Double R
Cattle Company, Inc. (1985)
Licensed Dixie Nuisance City
Winget v. Winn-Dixie Stores,
Inc. (1963)
Perma-Boomer Damage
Chooser
Boomer v. Atlantic Cement
Company, Inc. (1970)
Spur Industries, Inc. v. Del E.
Webb Development Company
(1972)
Unconsti-BORMAN-ary
Taking
Bormann v. Kossuth County
(1998)
Nuisance is for Neighbors you
Philly Rabbit
Philadelphia Electric Company
v. Hercules, Inc. (1985)
Swinton Swinton Termite
Pimpin
Swinton v. Whitinsville Savings
Bank (1942)
No GRI-vity Needed
Griffith v. Byers Construction
Company of Kansas, Inc.
(1973)
Haunty Stambovsky
Covenant Not To CompARIES w/ Secret Software
Please
Aries Information Systems, Inc.
v. Pacific Management Systems
Corp. (Minn. 1985)
MUSTARD-propriation of
Trade Secret
Mustards v. Tavern
Kooyman Insurance Plan
Kooyman v. Farm Bureau
Mutual Insurance Company
(Iowa 1982)
Non-Negli-MORGAN Private
Nuisance Forming
Morgan v. High Penn Oil
Company (1953)
No Double R Nuisance by
Public Choosin’
Derry Peck Steam Train
Misrep
Derry v. Peek (Eng. 1889)
Erie Wrong Dock Fury
International Products
Company v. Erie Railroad
Company (1927)
Winter Publish Mushroom
Rubbish
Winter v. G.P. Putnam’s Sons
(1991) (Mushroom case)
Soldier of Fortune (Exception
to Mushroom Rule)
Hanberry Hearst Seal of
Worth
Hanberry v. Hearst Corp.
(1969)
18
Minority Bounda-Waldmanary Duty
Richard v. A. Waldman and
Sons, Inc. (1967)
Boss Mends Sexual
BARRATment
Barrett v. Omaha National
Bank (8th Cir. 1984)
Economopolous Greek
Philosophus
Economopolous v. A.G. Pollard
Company
Murray Arthur Dance
Defrauder
Arthur Murray Dance Studio
Lynching of the Tangible
Defense in Iowa
Lynch v. City of Des Moines
(Iowa 1990)
Carafano Web Site Sorrow
Carafano v. Metrosplash.Com,
Inc. (9th Cir. 2003)
No Limit Liberty Fraud
Liberty Nat’l Life
Privity Close Alliance
Approach
Credit Alliance Corp. v. Arthur
Andersen & Company (1985)
Hankering for seea-CITIZEN
Bankin
Citizens State Bank v. Timm,
Schmidt & Company (1983)
Ultramare Gross is Fair
Ultramares Corp. v. Touche,
Niven & Company (1931)
(Granddaddy CPA liability
case)
Rank the Buick Stupid
Williams v. Rank & Son Buick,
Inc. (1969)
Land in Saxby Opinion Happy
Saxby v. Southern Land
Company (1909)
Vulcan Cleaner Perfect
Deceiver
Vulcan Metals Company v.
Simmons Manufacturing
Company (1918)
Gardner Zones that Law is
Known Fact
Sorenson v. Gardner (1959)
McElrath Future Train Fact
McElrath v. Electric Investment
Company (1911)
Cop don’t Stink Severely in
Klink
Klink v. Ramsey County (Minn.
App. 1986)
Tangi-Burlington Defense
Burlington Industries v. Ellerth
(U.S. 1998)
Must Show Boss Knew of
KATZ-rassment
Katz v. Dole (4th Cir. 1983)
Postal Service
Correro
Veterans Administration
Air Traffic Control
E. Chicago Fire Department
Lusty Libido
Iowa State Professor
Constra-HENSON Discharge
Henson v. City of Dundee (11th
Cir. 1982)
Radio SHOR-ly Libel Minority
Shor v. Billingsley (N.Y.S.C.
1956)
Special Slan-TERWILLIGER
Damages
Terwilliger v. Wands (N.Y.
App. 1858)
Cowman-ner Per Se Slander
Cowman v. LaVine
Neiman Libel Group Survival
Neiman-Marcus v. Lait
(S.D.N.Y. 1952)
Burg-SOF-er
Burgdorfer v. Thielemann
(1936)
Naked Reasona-BINDRIM
Thinkin
Benef-HINKLE of the Bargain
Simple
Hinkle v. Rockville Motor
Company, Inc.
Single P-OGDEN-cation Rule
Ogden v. Association of the
United States Army (D.D.C.
1959)
Unvoluntary FeaRITOR
Meritor Savings Bank v. Vinson
(SCT 1986)
KFC
Multi-BELLI
Belli v. Orlando Daily
Newspapers, Inc. (5th Cir. 1967)
Some Readers Adverse Digest
Grant v. Reader’s Digest
Association (2d Cir. 1945)
No Proof of Doubleday Truth
Kilian v. Doubleday &
Company, Inc. (Penn. 1951)
Quali-JACRON Sales Privilege
Sindorf v. Jacron Sales
Company, Inc. (Maryland App.
1975)
Sports Page Facts MILKOpinio Claps
Milkovich v. Lorain Journal
Company (U.S. 1990)
Cherry Sisters
New York Times Co. v. Sullivan
(SCT 1964)
Public Reckless Dis-AMANT
St. Amant v. Thompson (SCT
1968)
Judging Malice Harte-Hankish
Harte-Hanks Communications,
Inc. v. Connaughton (SCT
1989)
Gertz Taught the Private Fault
Gertz v. Robert Welch, Inc.
(SCT 1974)
Plaintiff Burden Sets in Public
Hepps
Philadelphia Newspapers, Inc.
v. Hepps (U.S. 1986)
Private Punitive Bradstreet
Foolishness
Dun & Bradstreet, Inc. v.
Greenmoss Builders, Inc. (U.S.
1985)
19