1. Its Legal, Ethical & Global Environment 6 th Ed. Its Legal, Ethical & Global Environment 6 th Ed. B U S I N E S S MARIANNE M. JENNINGS Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. Chapter 10 Business Torts

2. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 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”  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. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 3  Torts Versus 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  Torts Versus 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 What is a Tort?

4. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 4  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  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 What is a Tort?

5. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 5  Property Torts Trespass Disparagement Palming off Negligence  Property Torts Trespass Disparagement Palming off Negligence  Personal Torts False imprisonment Defamation Battery Assault Emotional distress Negligence What is a Tort?

6. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 6 The Intentional Torts  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  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. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 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  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 The Intentional Torts

8. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 8  Defamation: Defenses Truth is a complete defense Privileged speech: two types Absolute privilege Qualified privilege  Defamation: Defenses Truth is a complete defense Privileged speech: two types Absolute privilege Qualified privilege The Intentional Torts

9. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 9  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?  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? The Intentional Torts

10. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 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  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 The Intentional Torts

11. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 11 The Intentional Torts  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.  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. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 12 The Intentional Torts  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  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. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 13 The Intentional Torts  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  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. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 14 The Intentional Torts  Intentional Infliction of Emotional Distress 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 Emotional Distress Liability for conduct that exceeds all bounds of decency Difficult for plaintiff to establish emotional distress Has been used by debtors against collectors

15. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 15 The Intentional Torts  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  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

16. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 16 Competition Torts  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  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. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 17 Competition Torts  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?  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?

18. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 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  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. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 19 Negligence  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?  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?

20. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 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  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

21. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 21 Negligence  Case 10.5 McClung v. Delta Square Limited Partnership (1996) What was the common law on the duty to protect others from criminal acts What public policy issues do you see on both sides of the arguments in this case  Case 10.5 McClung v. Delta Square Limited Partnership (1996) What was the common law on the duty to protect others from criminal acts What public policy issues do you see on both sides of the arguments in this case

22. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 22 Negligence  Causation—Element Three Breach of duty caused the plaintiff’s injuries “But/for” causation test Restricted by the zone of danger rule = Duty  Causation—Element Three Breach of duty caused the plaintiff’s injuries “But/for” causation test Restricted by the zone of danger rule = Duty

23. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 23 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 10.6 Palsgraf v. Long Island RR (1928) There is a legal limit to what is foreseeable.  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.

24. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 24 Negligence  Damages—Element Five Medical bills Lost wages Pain and suffering Loss of consortium (as between spouses)  Damages—Element Five Medical bills Lost wages Pain and suffering Loss of consortium (as between spouses)

25. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 25 Negligence  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  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

26. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 26 Negligence  Defenses to Negligence 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 Negligence 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?

27. Copyright ©2003 by West Legal Studies in Business, a division of Thomson Learning. All rights reserved. 27 Tort Reform  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?  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?