Vicarious liability

Anglo-American Contract and Torts Prof. Mark P. Gergen Class Eight Vicarious liability, strict liability, and products liability

Early 1900s •“Pockets” of liability for carelessly caused harm

•Intervening wrong-doing often treated as a superseding cause •Contributory negligence complete bar to recovery •Broad doctrine of assumption of risk

Rise of negligence as a general cause of action

Shift to comparative fault eliminates the bar of contributory negligence.

Doctrines of superseding cause cut back to cover only some criminal conduct.

Doctrine of assumption of risk cut back so unreasonable decision to engage in an unreasonable activity is treated as a comparative fault

The upshot is that many more types of claims can be litigated. But there are limits . . .

Zone of danger

Undertakings Fisherman’s rule

Pure emotional disturbance Bystander liability

Pure economic loss

Undertakings

Preventive expenses

Liability for carelessly caused physical harm Special no liabiilty rules for some superseding wrongful conduct Special affirmative duty rules based on a special relationship

Mere nonfeasance

Limited duty owed trespasser

Abolition of joint and several liability for harms caused by multiple tortfeasors absolves D from part of loss attributable to other wrongdoers. This alleviates some of the objections to holding an actor liable for carelessly failing to protect P from (or facilitating) wrongful (particularly criminal) conduct by another.

It creates a need for rules to not absolve an actor from liability when he breaches a specific duty or fails to perform an undertaking to protect P from the conduct in question.

Duty rules determine what claims can be litigated.

In the US the rules on breach, cause in fact, scope of liability, and damages are best thought of as regulating how a claim is litigated, i.e., what evidence must be presented to establish a point, what evidence may be presented, when is a point sufficiently in issue to be put to the jury, how will the jury be instructed, etc . . . .

Breach: was the actor’s conduct unreasonable?

Cause in fact : did the unreasonable conduct cause the harm in question?

Scope of liability/legal cause: is the harm among the risks that made the actor’s conduct unreasonable? The actor may be the defendant, the plaintiff if comparative fault is at issue, or even a “phantom” . . .

Breach: was the actor’s conduct unreasonable? Sometimes there is a tailored standard of care-children, the physically disabled,. ..

Often much depends on how the breach is framed . . . Rules on negligence per se may resolve this issue

The doctrine of res ipsa may allow a finding of negligence even though the specific negligent conduct cannot be identified

Cause in fact : did the unreasonable conduct cause the harm in question? Usually the but for test . . .

There are special rules that may apply in some cases involving irreducible causal uncertainty and over-determined consequences.

Many of these special rules deal with cases where there are multiple wrongdoers and the uncertainty goes to who among them caused the harm. Colmanares uses non-delegable duty . . . Central case of multiple sufficient cause, Summers v. Tice, market share liability

Scope of liability/legal cause

Old principle—interest within the risk New principle—harm within the risk (“risk rule”)

There are special rules for certain types of risk (egg shell skull, rescue, etc . . .)

And there are special rules absolving an actor from liability for certain types of superseding wrongful conduct Abolition of joint and several liability opens the door for a defendant shedding liability by apportioning fault to other wrongdoers responsible for the harm.

Vicarious liability—respondeat superior An employer is strictly liable for torts committed by an employee who is acting in the scope of his employment. The employer is liable though it is in no way at fault. •a form of strict liability (enterprise liability) •the employer may also be liable based on its own negligence in hiring, supervising, or equipping an employee.

The employer has a right to be indemnified by the employee. Indemnity is almost never sought by employers.

Indemnity is the right a secondary obligor has to demand reimbursement by the primary obligor when the secondary obligor satisfies an obligation. Typically this is contractual, as in liability insurance.

Traditional rule is that conduct is within the scope of employment if the conduct is actuated in part by a purpose to serve the master. Limpus v. London General Omnibus (1863), p. 101, shows courts stretched to hold conduct within this principle to compensate victims. Coach driver intentionally obstructed other coach to get revenge for a perceived slight . . . Some US courts apply the principle that an employer is liable if its employment of the tortfeasor substantially increases the risk of the incident. Priest sexually molests child in his congregation. Is the church liable under the traditional rule? Under the principle just described?

Generally no vicarious liability for the torts of an “independent contractor” unless the contractor is engaged to perform a “nondelegable duty.”

Service provider is an “independent contractor” if the hirer has no right to control the manner and means by which the work is done. Non-delegable duties include •Certain affirmative duties, such as duty of business owner to maintain safe premises. Colmanares, pp. 61-62 •An “inherently dangerous activity” E.g., hiring a contractor to use explosives).

Rogers v. Night Riders (CA/Eng. 1983), p. 92 (P calls D for cab. Cab company is a routing service. Cab drivers own and operate their own cabs. P is injured as a result of defect in the cab.)

Hardy v. Brantly (Miss. 1985), p. 96 (P goes to emergency room of hospital. Physician who negligently treats him, resulting in P’s death, works as an independent contractor).

The defendant is held liable for the independent contractor’s negligence in both cases. But this is not on a general theory of vicarious liability.

In Rogers the theory is P contracted with the company for a well-maintained cab. See p. 93 middle and bottom.

In Hardy the theory appears to be that the hospital led P to believe that the physician was its employee. See p. 98 middle. Hannaola, p. 97 bottom, uses the concept of estoppel. Had the cab driver negligently run into another car, the cab company would not be liable . . .

In both cases the underlying problem is that the driver and physician didn’t have sufficient insurance to cover the loss. The results throw the excess loss on the cab company and hospital . . .

In many common law jurisdictions there is a rule of strict liability for abnormally dangerous activities, such as blasting or keeping dangerous animals.

In a strict liability action proof of an abnormally dangerous activity substitutes for proof of negligence. Everything else is the same including the rules on what counts as an “injury,” which generally limit liability to physical harm to person or property.

Strict liability for abnormally dangerous activities

Rylands v. Fletcher (artificial reservoir built above underground mine in mining region bursts flooding P’s mine) Keeping animals known to be dangerous Blasting But not driving an automobile or even a large truck or owning a gun though these are quite dangerous activities.

Two arguments for strict liability: 1) Compensation for harms caused by nonreciprocal risks; and

2) Reduction of risks inadequately regulated by negligence liability (sometimes described as an evidentiary rationale).

Reciprocity is basically a fairness argument. People who engage in unusual activities that impose a significant harm on others even if done carefully profit at the expense of others under a negligence regime. Conversely negligence liability is thought appropriate for activities that involve reciprocal risks because the benefit of immunity and cost of accidents not worth avoiding are shared roughly equally.

Security

Culpability

Liberty

Strict liability for abnormally dangerous activities

D owns a vicious dog, which he prudently keeps in a well fenced yard. P crosses the fence into the yard, trespassing, and is bitten by D’s dog. Assume liability is strict so breach (carelessness) is not an issue. With which of the following defenses does D have a reasonable likelihood of success? a) b) c) d) e) f)

No duty No causation Outside of scope of liability Superseding cause Contributory negligence Assumption of risk

Products Liability

Implied warranty of merchantability: good must be fit for the ordinary purposes for which it is used, be of “fair average quality,” etc . . . UCC 2-314.

Consumer expectation: product is defective if it has unexpected harmful characteristics

Negligence: Manufacturer must take reasonable care to avoid physical harm.

Risk-utility: product is defective if risk justifies cost of redesign or warning to reduce risk

Implied warranty of merchantability: good must be fit for the ordinary purposes for which it is used, be of “fair average quality,” etc . . . UCC 2-314.

Negligence: Manufacturer must take reasonable care to avoid physical harm.

P opens and drinks a soft drink in a can only to find a dead bug at the bottom of can. Does P have a stronger claim for breach of warranty or negligence? P chokes on a small bone in a meaty fish stew. Does P have a strong claim for either breach of warranty or negligence? Do you need more facts?

Back to the bug in the bottle. The manufacturer establishes that 1 in 100,000 bottles will end up with a bug no matter how much care it takes, and that its incidence level is no more than 1 in 100,000.

Is the manufacturer subject to negligence liability?

Why impose strict liability for unavoidable manufacturing defects? •Evidentiary rationale •Loss spreading •Creates incentive for manufacturers to do research to reduce bugs •Creates incentive to adjust activity level for unavoidable risks

Restatement Second Torts Section 402A (p. 106 top)

“One who sells any product in a defective condition unreasonably dangerous to the user or consumer to his property is subject to liability for physical harm thereby caused . . . if the seller is engaged in business of selling such a product . . .” The focus of the claim is on the condition of the product. Is the product defective? The bug in the bottle is a “manufacturing defect.” This is a product that does not conform to specifications. A product can also be defective because of its design or failure to warn. In the US the standard generally is “riskutility.”

Restatement Second Torts Section 402A (p. 106 top)

“One who sells any product in a defective condition unreasonably dangerous to the user or consumer to his property is subject to liability for physical harm thereby caused . . . if the seller is engaged in business of selling such a product . . .” An innocent distributor and retailer are held liable so the plaintiff may proceed against a local actor. The expectation is the loss will be passed up the chain to the manufacturer.

Restatement Second Torts Section 402A (p. 106 top)

“One who sells any product in a defective condition unreasonably dangerous to the user or consumer to his property is subject to liability for physical harm thereby caused . . . if the seller is engaged in business of selling such a product . . .”

Liability is limited to physical harm.

Under genuine absolute liability a manufacturer (or distributor or retailer) would be liable for any harm caused by a product. Worker’s compensation is close to this . . . an employer is strictly liable for any work-related accidents, though only for economic damages.