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Chapter 10 Business Torts

MARIANNE M. JENNINGS. Its Legal, Ethical, and Global Environment. 7 th Ed. Chapter 10 Business Torts. What is a Tort?. A tort is a civil wrong that is an interference with someone’s person or property such that injury results. Latin Word Tortus: m eans “crooked, dubious, twisted”.

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Chapter 10 Business Torts

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  1. MARIANNE M. JENNINGS Its Legal, Ethical, and Global Environment 7th Ed. Chapter 10 Business Torts

  2. What is a Tort? • A tort is a civil wrong that is an interference with someone’s person or property such that injury results. • Latin Word Tortus: means “crooked, dubious, twisted”.

  3. Torts vs. Crimes • Tort is a private wrong. • Injured party seeks remedy. • Recovers damages from the one who commits the tort. • Crime is a public wrong. • Wrongdoer is prosecuted. • Pays fine to government or is jailed to pay debt to society.

  4. Types of Torts • Intentional torts: • More than an accidental wrong. • Tort of negligence: • Accidental harms that result from the failure to think through the consequences. • Still have liability but there are defenses. • Strict tort liability: • Absolute standard of liability. • Used in product liability cases.

  5. Property Torts Trespass Disparagement Palming off Negligence Personal Torts False imprisonment Defamation Battery Assault Emotional distress Negligence Other Types of Torts

  6. Defamation • Untrue statement by one party that is published to a third party. • Slander is oral or spoken defamation. • Libel is written, and in some states broadcast, defamation.

  7. Defamation • Elements: • Statement about a business’ or person’s reputation or honesty that is untrue. • Statement is directed at business and made with malice and intent to injure. • Publication - someone heard and understood the statement. • Damages - economic losses such as damage to reputation.

  8. Defamation • Defenses: • Truth is a complete defense. • Privileged speech: two types. • Absolute privilege. • Qualified privilege.

  9. Defamation • Case 10.1Wilkow v. Forbes (2001). • What was Forbes’ defense to libel? • Can an opinion be libelous? • Case 10.2 Burnett v. National Enquirer, Inc. (1983). • Was malice established in the case? Why was it necessary to establish malice? • Is the National Enquirer a newspaper for purposes of the protection of the privilege?

  10. Defamation • References and defamation. • Managers must use caution when speaking of former or current employees to potential new employers. • The tort of defamation can be established if false statements are made.

  11. Contract Interference • Elements: • Tortfeasor knew of Employee’s contract. • Tortfeasor intended to interfere with or breach contract between Employer-Plaintiff and Employee. • Employer-Plaintiff is injured by breach of contract.

  12. Contract Interference • Texaco, Inc. v. Pennzoil, Co. (1987) • The court awarded Pennzoil $7.53 billion in actual damages and $3 billion in punitive damages for tortuous interference of contract. • On April 12, 1987, Texaco filed for bankruptcy protection.

  13. False Imprisonment • Custody of someone else for any period of time against their will. • Need not establish physical damages; just the fact that they are detained establishes sufficient damages. • Defense of shopkeeper’s privilege. • Can detain for reasonable time. • Must have basis for detaining the individual.

  14. Intentional Infliction of E.D. • Liability for conduct that exceeds all bounds of decency. • Difficult for plaintiff to establish emotional distress. • Has been used by debtors against collectors.

  15. Invasion of Privacy • Public disclosure of private facts • Appropriation of another’s name for commercial advantage • Galella v. Onassis (1972). • The court ruled Galella had invaded Jacqueline Kennedy Onassis’ privacy. • HIPAA protects health/patient privacy.

  16. Appropriation • Unauthorized use of someone’s name, voice, image, or likeness for commercial advantage. • Even if manner of use is accurate, it is a tort because of the use without authorization.

  17. Appropriation • Case 10.3Midler v. Ford Motor Co.(1988). • On appeal, Ms. Midler’s case was tried and she recovered $400,000. • Was the audience confused as to who really sang in the commercial? • Was the use of Midler’s voice appropriation?

  18. Negligence • Duty—Element One. • All persons are expected to behave as ordinary and reasonably prudent persons do: • Standard of the law is not always used. • Example: The speed limit of 45 is not appropriate in ice and snow.

  19. Negligence • Case 10.4Randi W. v. Muroc Joint Unified School District(1997). • What concerns are raised about imposing liability on those who provide letters of recommendation? • What was the proximate cause of Randi W’s injury?

  20. Negligence • Breach of Duty—Element Two • Failure to comply with established standard of conduct • Often connected with element one as courts struggle to determine whether a duty even exists • Case 10.5Graves v. Warner Brothers (2004). • What duty did Jenny Jones show have to the Plaintiffs?

  21. Negligence • Causation—Element Three. • Breach of duty caused the plaintiff’s injuries. • “But/for” causation test . • Restricted by the zone of danger rule = Duty.

  22. Negligence • Proximate Cause (Foreseeability)—Element Four. • Some courts hold the cut-off line must be drawn between the "but/for" causation and events contributing to plaintiff's injuries • Case 10.6Palsgraf v. Long Island RR (1928) • There is a legal limit to what is foreseeable.

  23. Negligence • Damages—Element Five. • Medical bills. • Lost wages. • Pain and suffering. • Loss of consortium (as between spouses).

  24. Defenses to Negligence • Contributory negligence: • Plaintiff is also negligent. • Operates as a complete bar to recovery • Comparative negligence: • Compare acts of plaintiff and defendant and assess blame for accident. • Reduces plaintiff’s recovery by amount of fault.

  25. Defenses to Negligence • Assumption of risk—plaintiff knew of inherent risk and went forward anyway. • Case 10.7Mosca v. Lichtenwalter(1997). • Is the risk of being struck by a line inherent in the sport of fishing? • What is the difference between assumption of the risk in day-to-day activities and in sports?

  26. Tort Reform • Current Attempts at Reform: • Limits on verdicts. • Standards for recovery. • Case 10.8BMW of North America, Inc. v. Gore(1996). • What constitutional issues are raised? • To whom would the dissent leave the issue of punitive damage?

  27. Tort Reform • Limits on Punitives: • Eighth Amendment excessive punitive damages is cruel and unusual punishment. Cooper Industries v. Leatherman Tool Group (2001). • Due Process violated with excessive punitives. State Farm v. Campbell (2003).

  28. Strict Liability • Absolute liability for injury. • Can result from violation of statute (improper disposal of toxic waste). • Public policy reason is manufacturers take appropriate steps to design and manufacture products.

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