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Chapter 10 Business Torts
Its Legal, Ethical, and Global Environment
MARIANNE M. JENNINGS
7th Ed.
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• 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”.
What is a Tort?What is a Tort?
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• 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.
Torts vs. CrimesTorts vs. Crimes
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• 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.
Types of TortsTypes of Torts
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• Property Torts– Trespass
– Disparagement
– Palming off
– Negligence
• Personal Torts– False
imprisonment– Defamation– Battery– Assault– Emotional distress– Negligence
Other Types of TortsOther Types of Torts
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• 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.
DefamationDefamation
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• 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.
DefamationDefamation
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• Defenses:– Truth is a complete defense.
– Privileged speech: two types.• Absolute privilege.
• Qualified privilege.
DefamationDefamation
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• Case 10.1 Wilkow 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?
DefamationDefamation
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• 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.
DefamationDefamation
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• 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.
Contract InterferenceContract Interference
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• 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.
Contract InterferenceContract Interference
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• 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.
False ImprisonmentFalse Imprisonment
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• Liability for conduct that exceeds all bounds of decency.
• Difficult for plaintiff to establish emotional distress.
• Has been used by debtors against collectors.
Intentional Infliction of Intentional Infliction of E.D.E.D.
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• 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.
Invasion of PrivacyInvasion of Privacy
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• 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.
AppropriationAppropriation
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• Case 10.3 Midler 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?
AppropriationAppropriation
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• 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.
NegligenceNegligence
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• Case 10.4 Randi 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?
NegligenceNegligence
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• 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 10.5 Graves v. Warner Brothers (2004).• What duty did Jenny Jones show have to
the Plaintiffs?
NegligenceNegligence
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• Causation—Element Three.– Breach of duty caused the plaintiff’s
injuries.
– “But/for” causation test .
– Restricted by the zone of danger rule = Duty.
NegligenceNegligence
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• 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 10.6 Palsgraf v. Long Island RR (1928) – There is a legal limit to what is foreseeable.
NegligenceNegligence
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• Damages—Element Five.– Medical bills.
– Lost wages.
– Pain and suffering.
– Loss of consortium (as between spouses).
NegligenceNegligence
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• 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.
Defenses to Defenses to NegligenceNegligence
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• Assumption of risk—plaintiff knew of inherent risk and went forward anyway.
• Case 10.7 Mosca 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?
Defenses to Defenses to NegligenceNegligence
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• Current Attempts at Reform:– Limits on verdicts.– Standards for recovery.
• Case 10.8 BMW of North America, Inc. v. Gore (1996).– What constitutional issues are raised?– To whom would the dissent leave the issue of
punitive damage?
Tort ReformTort Reform
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Tort ReformTort 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).
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Strict LiabilityStrict 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.