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Unformatted text preview: CHAPTER 6 CHAPTER 6 INTENTIONAL TORTS AND BUSINESS TORTS INTRODUCTION INTRODUCTION Tort Criminal Law v. Tort Law Borrowed from the French, meaning “wrong” A tort is a wrong, more precisely it is a violation of a duty imposed by the civil law Criminal – government prosecutes, fines go to state, jail time a possibility Tort – individual hires own attorney, plaintiff gets money, no jail time Keep in mind that an event can give rise to both criminal and tort law claims INTRODUCTION INTRODUCTION Contract Law v. Tort Law Intentional Torts Contract dispute is over an agreement that at least two people have already made In a tort case there is usually no “deal” between people, the plaintiff argues that the law itself creates a duty that was breached Harm caused by a deliberate action Does not mean that defendant intended to harm plaintiff Harm caused by neglect and oversight rather than by deliberate conduct Negligence and Strict Liability (Chapter 7) INTRODUCTION INTRODUCTION A wide variety of intended acts can have unintended consequences. With intentional torts, the defendant may not have intended to harm the plaintiff, but her deliberate actions have resulted in the alleged injury. Anticipating the harm that can result enables us to consider carefully the actions themselves. Ex: Caudle v. Betts INTENTIONAL TORTS INTENTIONAL TORTS Defamation Right to free speech is not absolute The law of defamation concerns false statements that harm someone’s reputation Defamatory statements can be written or spoken (written = libel; spoken = slander) Four Elements to a Defamation Claim Defamatory Statement Falseness Communicated to a Third Party Injury (in libel cases the law assumes injury) INTENTIONAL TORTS INTENTIONAL TORTS Slander Per Se Although spoken, the plaintiff is not required to prove injury when Accusing plaintiff of committing a serious crime Having a sexually transmitted disease Incompetence in her profession Or being an unchaste woman Opinion and Hyperbole Opinion is generally a valid defense in a defamation suit because it cannot be proven true or false Yeagle v. Collegiate Times (1998) Knievel v. ESPN (2005) Eminem “Brain Damage” Yeagle v. Collegiate Times – p. 130 Yeagle v. Collegiate Times – Facts: Sharon Yeagle was the Assistant to the Vice President of Students Affairs and Virginia Polytechnic Institute and State University. One of Yeagle’s duties was to help students apply to the Governor’s Fellows Program. The school newspaper published an article describing the university’s success in placing students and included a quote from Yeagle. Under Yeagle’s name in the article was the phrase “Director of Butt Licking.” Yeagle sued the Collegiate Times for defamation and the trial court dismissed the case ruling that no reasonable person would take the words literally. Yeagle appealed. Yeagle v. Collegiate Times – p. 130 Yeagle v. Collegiate Times – Issue: Was the phrase defamatory, or was it deliberate exaggeration that no reasonable person would take literally? Holding: Judgment for Collegiate Times affirmed. The court held that the phrase was no more than rhetorical hyperbole. Although the phrase was disgusting, offensive, and in bad taste, it could not reasonably be understood as stating an actual fact about Yeagle's job title or her conduct, or that she committed a crime of moral turpitude. Yeagle's assertion that the phrase demonstrated a lack of integrity in the performance of her duties also failed. The phrase could not reasonably be considered as conveying factual information about Yeagle, thus it did not support a cause of action for defamation. Yeagle v. Collegiate Times – p. 130 Yeagle v. Collegiate Times – Question: Why didn’t the district court allow Yeagle to present her case at trial? Wasn’t she entitled to his day in court? Answer: Yeagle had her day in court—before the judge who dismissed her case. A plaintiff only gets a trial if there are facts in dispute or if the law could be interpreted in more than one way. Neither was true in this case. Question: Why does the court look at phrase in the context in which it appeared, from the standpoint of the average reader? Answer: The phrase could not be read in a vacuum. The same phrase appearing on the front page of a national newspaper would lead to a very different interpretation of their meaning. Question: What was the context in which they appeared? Answer: They were in a student newspaper, readers of which appreciate humor and lively language In this context, a reader viewing the phrase would not interpret it as literal statements of fact. Question: Why is that important? The photo and caption offended Yeagle. Answer: It is important because without an untrue statement of fact, Yeagle cannot prove a prima facie case of defamation. INTENTIONAL TORTS INTENTIONAL TORTS Public Personalities Public Officials (Police Chief) and Public Figures (Movie Star) New York Times Co. v. Sullivan (1964) Cyberlaw A public official or public figure can win a defamation case only by proving actual malice by the defendant Actual malice means that the defendant knew the statement was false or acted with reckless disregard of the truth Zeran v. America Online, Inc. (1997) AOL found to be immune from defamation suit as 3rd party provider of internet service INTENTIONAL TORTS INTENTIONAL TORTS Privilege Absolute privilege exists in courtrooms and legislative hearings Qualified privilege exists when two people have a legitimate need to exchange information Reporting of criminal tips Employment references Must be made in good faith and only disclosed to those who have a need to know INTENTIONAL TORTS INTENTIONAL TORTS False Imprisonment The intentional restraint of another person without reasonable cause and without consent EXAMPLES: An employer who doesn’t let a sick employee go home might be guilty of false imprisonment. If the police detain a person with no reason to suspect him of any crime, it could be false imprisonment. EXCEPTION: In general, a store may detain a person suspected of shoplifting if there is a reasonable basis for the charge and the detention is done reasonably (in private and for a reasonable time). Intentional Tort Intentional Infliction of Emotional Distress Historically, no recovery was allowed if the injury was only emotional instead of physical. Today, most courts allow a plaintiff to recover from a defendant who intentionally causes emotional injury. Behavior causing injury must be extreme and outrageous. Must have caused serious emotional harm. Some courts allow recovery for emotional injury caused by negligent behavior (but not in Texas). INTENTIONAL TORTS INTENTIONAL TORTS Intentional Infliction of Emotional Distress The intentional infliction of emotional distress results from extreme and outrageous conduct that causes serious emotional harm Ford Motor Credit Co. v. Sheehan (1979) Jane Doe and Nancy Roe v. Lynn Mills (1995) Jane Doe v. Lynn Mills, p. 134 Jane Doe v. Lynn Mills, Facts: Late one night, an anti­abortion protestor named Robert Thomas climbed into a dumpster located behind the Women's Advisory Center, an abortion clinic. He found documents indicating that the plaintiffs were soon to have abortions at the clinic. Thomas gave the information to Lynn Mills. The next day, Mills and Sister Lois Mitoraj created signs, using the women's names, indicating that they were about to undergo abortions, and urging them not to “kill their babies.” Doe and Roe (not their real names) sued, claiming intentional infliction of emotional distress (as well as breach of privacy, discussed later in this chapter). The trial court dismissed the lawsuit, ruling that the defendants' conduct was not extreme and outrageous. The plaintiffs appealed. Jane Doe v. Lynn Mills, p. 134 Jane Doe v. Lynn Mills, Issue: Have the plaintiffs made a valid claim of intentional infliction of emotional distress? Holding: Dismissal reversed, and remanded for trial. “The objectionable aspect of defendants' conduct does not relate to their views on abortion or their right to express those views, but, rather, to the fact that defendants gave unreasonable or unnecessary publicity to purely private matters involving plaintiffs. . . . We believe this is the type of case that might cause an average member of the community, upon learning of defendants' conduct, to exclaim, ‘Outrageous!’ Jane Doe v. Lynn Mills, p. 134 Jane Doe v. Lynn Mills, Question: What are the elements of intentional infliction of emotional distress? Answer: A plaintiff must prove extreme and outrageous conduct that caused her serious emotional harm. Question: According to the appeals court, how does the law determine whether a defendant’s conduct is sufficiently extreme to constitute this tort? Answer: The court said that the elements have probably been established if the average member of the community would exclaim, “outrageous!” Question: Don’t the defendants have a First Amendment right to express their opinions? Answer: Absolutely. Question: Then how can the appeals court reverse the trial court’s dismissal? Isn’t the court diminishing the defendants’ First Amendment rights? Answer: The court acknowledges that the defendants have a right to express their views on abortion. What they do not have a right to do is publicize the names of these women and the fact that they were about to undergo abortions. That is purely private information of no interest to the general public, and that in turn means that the defendants had no right to divulge it. Intentional Tort ­ Battery and Assault Intentional Tort ­ Battery is a touching of another person in a way that is unwanted or offensive. The touch does not have to hurt the victim ­­ sexual touching that is offensive, but not painful, is battery. An intentional action that does hurt someone may be battery even if the injury is unintentional. Assault can occur without the battery ever Assault is an action that causes the victim to fear an imminent battery. happening. Pulling a gun on someone ­­ even if it is unloaded ­­ is usually considered assault. INTENTIONAL TORTS INTENTIONAL TORTS TORTS INVOLVING PROPERTY Trespass, Conversion and Fraud Trespass Trespass is intentionally entering land that belongs to someone else or remaining on the land after being asked to leave Keeping an object, such as a vehicle, on someone else’s land and refusing to move it is also trespassing. You may be trespassing if you enter someone’s property mistakenly believing it is public property. “Intentionally” means you deliberately entered the land INTENTIONAL TORTS INTENTIONAL TORTS Conversion Conversion is taking or using someone’s personal property without consent Personal property is any possession other than land Fraud Fraud is injuring another person by deliberate deception A jury may award compensatory damages ­­ payment for injury ­­to a plaintiff who prevails in a civil suit. The Single Recovery Principle mandates that the court must decide all damages ­­ past, present and future ­­ at one time and settle the matter completely. Damages may include money for three purposes: Compensatory Damages to restore any loss (such as medical expenses) caused by the illegal action to restore lost wages if the injury kept the defendant from working to compensate for pain and suffering George Grubbs Enterprises v. Bien (1994) Intended for conduct that is outrageous and extreme Designed to “make an example” out of the defendant Should deter others from doing same conduct and prevent this defendant from repeating actions Sometimes punitive damage awards are While the purpose of compensatory damages is to help the victim recover what was lost, punitive damages are intended to punish the guilty party. Punitive Damages huge, but in most cases they are close to or less than the amount of compensatory damages awarded. Boeken v Philip Morris Incorp. ­ p. 140 Boeken v Philip Morris Incorp. Facts: Richard Boeken started smoking Marlboro cigarettes in the mid­ 1950’s. Advertisements targeted at boys 8­10 years old convinced him that the Marlboro Man was mach and healthy. Boeken later switched to Marlboro Lights but continued smoking into the 1990’s, when he was diagnosed with lung cancer. Boeken filed suit against Philip Morris for fraud and other torts. Boeken died of cancer before the case was concluded. Evidence at trial proved that by the mid­1950’s scientists agreed that cigarette smoking caused lung cancer. Nevertheless Philip Morris began a campaign to cast doubt on the connection between smoking and cancer. The evidence also showed that tobacco was physically addictive, and that Philip Morris added chemicals, like urea to their cigarettes to increase the addictiveness. Boeken testified that in the 1960’s he did see the Surgeon General’s warning about the health risks of smoking, but he believed Philip Morris’ statements that smoking was safe. Boeken tried many times to quit, but ultimately was unsuccessful. The jury found Philip Morris liable for fraudulently concealing that cigarettes were addictive and carcinogenic. The jury awarded Boeken $5.5 million in compensatory damages and $3 billion in punitive damages. The trial judge reduced the punitive damages to $100 million and Philip Morris appealed. Boeken v Philip Morris Incorp. ­ p. 140 Boeken v Philip Morris Incorp. Issue: Was the punitive damage award excessive? Holding: The court reduced the jury’s award of punitive damages to $50 million. The court stated that Philip Morris knew it manufactured a dangerous product and knowingly made it more dangerous by adding chemicals. Moreover, Philip Morris advertised its product in a misleading way specifically targeting male adolescents. Although the health risks of smoking may have been known to the public, Philip Morris created a false controversy regarding the health effects of smoking and the addictiveness of their product. Moreover, the company marketed their Light cigarettes knowing that they are more dangerous than ordinary consumers would expect, while still adding chemicals to increase the delivery of the nicotine into the lungs. Based on this, the company must be held accountable. In order to fulfill the goal of deterrence, the defendant must feel the pain of the award. Philip Morris’ domestic tobacco company has a value of $30­35 billion, and earns a profit of nearly $15 million per day. The extreme reprehensibility of the conduct of the company justifies a ratio of at least 9:1, therefore the court found punitive damages of $50 million. Exxon Shipping Co. et al. v. Baker et al Exxon Shipping Co. et al. v. Baker et al Facts: In 1989, the Exxon supertanker Valdez ran aground on a reef in Alaska spilling 11 million gallons of crude oil into Prince William Sound. The captain of the Valdez, John Hazelwood had completed a 28­day alcohol treatment program while employed by Exxon, as his superiors knew, but dropped out of the required follow­up program and stopped attending Alcoholics Anonymous meetings. Witnesses testified that before the Valdez left port on the night of the spill, Hazelwood drank at least five double vodkas, which is about 15 ounces of 80­proof alcohol, enough “that a non­alcoholic would have passed out.” The accident occurred after Hazelwood, inexplicably left the bridge, leaving a difficult course correction to an unlicensed subordinate. The officer failed to make a necessary turn and the tanker ran aground on Bligh Reef, tearing the hull open and spilling the millions of gallons of oil. as a result, Exxon spent about $2.1 billion in cleanup efforts. The United States charged the company with criminal violations of the Clean Water Act, the Refuse Act of 1899, the Migratory Bird Treaty Act, the Ports and Waterways Safety Act, and the Dangerous Cargo Act. Exxon pleaded guilty and agreed to pay a $150 million fine, which was later reduced to $25 million plus restitution of $100 million. A civil action by the United States and the state of Alaska resulted in a consent decree whereby Exxon will pay $900 million toward restoring natural resources, and Exxon paid another $300 million in voluntary settlements with fishermen, property owners, and other private parties. Exxon Shipping Co. et al. v. Baker et al Exxon Shipping Co. et al. v. Baker et al The remaining civil cases were consolidated and a class of plaintiffs sought punitive damages. Exxon admitted it was negligent in the disaster and liable for compensatory damages. In charging the jury on the issue of punitive damages, the court told the jurors that the purpose of punitive damages was to punish and deter defendants. The court instructed the jury to consider the reprehensibility of the defendant’s conduct, their financial condition, the magnitude of the harm, and any mitigating facts. The jury awarded $5,000 in punitive damages against Hazelwood and $5 billion against Exxon. Exxon appealed the punitive damage award to the Court of Appeals for the Ninth Circuit. That court remanded twice for adjustments and reduced the award to $2.5 billion. Exxon appealed to the United States Supreme Court Exxon Shipping Co. et al. v. Baker et al Exxon Shipping Co. et al. v. Baker et al Issue: Was the punitive damage award excessive? Holding: Yes, the decision of the Court of Appeals is vacated and remanded. Excerpts from Justice Souter’s Opinion: Exxon argues that the $2.5 billion punitive damage award exceeds the bounds justified by the punitive damages goal of deterring reckless (or worse) conduct. This claim hits at the heart of our understanding of where punitive damages fit in the modern civil law and reasonable standards of process in administering punitive damages. The consensus today is that punitive damages are aimed not at compensation but principally at retribution and deterring harmful conduct; conduct that is outrageous, grossly negligent, willful, wanton, and even worse. Although American punitive damages have come under much criticism lately, many of the studies seem to undercut much of that criticism. Although some studies show the dollar amounts growing, the real problem is the unpredictable nature of punitive awards. Available studies show that the median ratio of punitive to compensatory awards has remained 1:1; however the spread between high and low awards is great which means in the outlier cases defendants are being subjected to punitive damages that greatly exceed the compensatory damages. A penalty should be reasonably predictable in its severity, so that even Holmes’s “bad man” can look ahead and know what the stakes are in deciding a course of conduct. Applying a quantifiable limit on punitive damages would achieve this predictability. An acceptable standard can be found in the many studies which reflect the judgments of judges and juries in thousands of cases dealing with conduct at all levels from malice to recklessness to gross negligence. That data put the median ratio at less than 1:1. The court finds that a 1:1 ratio is a fair upper limit in this case where the action is worse than negligent but less than malicious, and where the compensatory damages are high. Because the District Court’s calculation of the total amount of compensatory damages was $507.5 million, a punitive­to­compensatory Tort Reform About half of the states have passed statutory limits on tort awards. In most cases, a jury can award whatever seems reasonable for economic damages. Non­economic damages usually may not exceed a prescribed limit, such as 3 times the economic damages, or a flat cap such as $250,000 total. BUSINESS TORTS BUSINESS TORTS Tortious Interference With Business Relations Healthy competition becomes illegal interference Tortious interference with a contract Tortious interference with a prospective advantage There was a contract between plaintiff and a third party; Defendant knew of the contract; The defendant improperly induced the third party to breach the contract or made performance of the contract impossible; and There was injury to the plaintiff Texaco v. Pennzoil (1983) Brumfield v. Death Row Records, Inc. (2003) A plaintiff who has a definite and reasonable expectation of obtaining an economic advantage may sue a corporation that maliciously interferes and prevents the relationship from developing The action of defendant generally has to be independently illegal Carvel v. Noonan (2004) Carvel v Noonan ­ p. 145 Facts: For decades, Carvel sold its ice cream only through franchised stores. However, a decline in revenues caused the company to begin selling its product in supermarkets. That effort expanded quickly, but many of the franchised stores (franchisees) went out of business. Franchisees filed suit, claiming tortious interference with a prospective advantage. In particular, the plaintiffs argued that Carvel undersold them in supermarkets, and issued coupons only redeemable there. The case reached New York’s highest court. Issue: Had Carvel committed tortious interference with a prospective advantage? Carvel v Noonan ­ p. 145 Holding: Judgment for Carvel. In the words of the court: The franchisees' tort claim is that Carvel unlawfully interfered with the relationships between the franchisees and their customers. The franchisees do not claim that the customers had binding contracts that Carvel induced them to breach; they allege only that, by implementing its supermarket program, Carvel induced the customers not to buy Carvel products from the franchisees. The juries have found that Carvel did so induce customers, and the question for us is whether that inducement was tortious interference under New York law. Inducing breach of a binding agreement and interfering with a nonbinding "economic relation" can both be torts, but that the elements of the two torts are not the same. Where there has been no breach of an existing contract, but only interference with prospective contract rights, however, plaintiff must show more culpable conduct on the part of the defendant. The implication is that, as a general rule, the defendant's conduct must amount to a crime or an independent tort. The franchisees’ claim that Carvel used wrongful economic pressure fails for two reasons. First, it is ill­founded because the economic pressure that must be shown is not, as the franchisees assume, pressure on the franchisees, but on the franchisees' customers. All Carvel did to the franchisees' customers was to make Carvel goods available in supermarkets at attractive prices. Second, Carvel’s activities do not amount to the sort of extreme and unfair "economic pressure" that might be "wrongful." The crux of the franchisees' complaint is that Carvel distributed its products through competitive channels, to an extent and in a way that was inconsistent with the franchisor­franchisee relationship. The relationship between franchisors and franchisees is a complex one. It does not preclude all competition; and the extent to which competition is allowed should be determined by the contracts between the parties, not by courts or juries seeking after the fact to devise a code of conduct. BUSINESS TORTS BUSINESS TORTS Privacy and Publicity Intrusion Intrusion into someone’s private life is a tort if a reasonable person would find it offensive Commercial exploitation This right prohibits the use of someone’s likeness or voice for commercial purposes Midler v. Ford Motor Co. (1988) Jack Ass (formerly Bob Craft) v. Jackass Intrusion (prying into someone’s private life) is a tort if a reasonable person would find it offensive. Examples: wiretapping, stalking, peeping Technology is creating new ways for a person’s privacy to be exploited, and therefore creating a demand for new laws The Electronic Communications Privacy Act prohibits unauthorized interception and disclosure of wire and electronic communication. The Stored Communications Act, prohibits unauthorized access to a facility through which an electronic service is provided. Commercial Exploitation is when a person’s image or voice is used for commercial purposes without that person’s permission. Privacy and Publicity (passed in 1946, amended in 1988) The Lanham Act This statute prohibits ­­ and provides punishment for ­­ false statements made by a business intended to hurt another business. To win a case under this act, the plaintiff must prove three things: The defendant made false or misleading fact statements about the plaintiff’s business The defendant used the statements in commercial advertising or promotion The statements created a likelihood of harm to the plaintiff “A wide variety of intended acts can have unintended consequences. With intentional torts, the defendant may not have intended to harm the plaintiff, but her deliberate actions have resulted in the alleged injury. Anticipating the harm that can result enables us to consider carefully the actions themselves.” ...
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