Hoey & Farina Tort Report

JUDGE PUSHES FOR PRE-DELIBERATION DISCUSSIONS

2010-01-31T15:32:00.001-06:00

“Jurors are rarely brilliant and rarely stupid, but they are treated as both at once.” Chief U.S. District Judge Warren Urbom, Toward Better Treatment of Jurors by Judges, 61 Nebraska Law Review 409 (1982).

In other words, “We expect jurors to remember and understand brilliantly the facts and the law of complex cases, but often we think them too stupid to be trusted to take notes, ask questions, and in other ways take an active part in the acquisition and management of the information necessary to render an informed verdict.” William W. Schwarzer, Reforming Jury Trials, 1990 U. Chi. Legal. F. 119, reprinted in 132 F.R.D. 575 (1991).

Recent research has prompted some judges to reject old notions about how to treat jurors.

In 2007, for example, when Rhoderick T. Flockhart was accused of distributing marijuana in Denver, Colorado, the trial judge told the attorneys that “the court allows the jury to discuss the case prior to the conclusion of the case, but will instruct them not to draw any conclusions about what the evidence shows.”

Defense counsel objected, but the judge instructed the jury:

“You will be able to discuss the case as you go along. However, even though you’ll hear in opening statements what the evidence is expected to show, you’ll not have heard all the evidence until the last witness is finished. So don’t draw any firm conclusions about what you’ve heard. Keep an open mind all the way through the trial and draw your conclusions only at the conclusion of the case.”

The Colorado Court of Appeals reversed Flockhart’s conviction, with Judge Steve Bernard vigorously dissenting from the majority’s analysis of pre-deliberation discussions.

“Within the last fifteen years,” Judge Bernard explained, “the model of treating jurors as passive spectators has been subject to significant criticism.”

“A large and significant body of social science research about how human beings process information and learn indicates that jurors are active decision makers, rather than the mythical blank slates who wait until the close of a trial to decide a verdict,” Judge Bernard recounted.

This accumulating body of compelling research prompted the Arizona Supreme Court to authorize pre-deliberation discussions in civil cases.

Rule 39(f) of the Arizona Rules of Civil Procedure says that jurors “shall be instructed that they will be permitted to discuss the evidence among themselves in the jury room during recesses from trial when all are present, as long as they reserve judgment about the outcome of the case until deliberations commence. Nothwithstanding the foregoing, the jurors’ discussion of the evidence among themselves during recesses may be limited or prohibited by the court for good cause.”

After Arizona adopted this rule, Judge Bernard noted, “three empirical follow-up studies all provided evidence that allowing jurors to engage in predeliberation discussions under this rule improved the trial process.”

“Allowing jurors to engage in predeliberation discussions provides palpable benefits,” Judge Bernard concluded. “Jurors understand the evidence better, they are less confused, and, in some circumstances, predeliberation discussions convince jurors to alter or reverse preliminary decisions about the case.” People v. Flockhart, 2009 WL 4981910 (Colo.App.) (December 24, 2009).

Here are highlights of Judge Bernard’s analysis (with omissions not noted in the text):

Jurors in the United States are passive spectators of a well-orchestrated jury trial presented by lawyers and judges. Jurors act as passive judges of what evidence the parties choose to present and which proof the law of evidence allows.

The earliest English juries were much different than present-day American juries. They played an active role in the trial process, often gathering evidence before trials began.

The present-day model of jurors as passive listeners who choose between the parties’ evidence is a product of a historical struggle, hundreds of years in duration, in which lawyers and judges sought to gain control over juries.

It is, therefore, not surprising that the fear of losing total control over the trial and fact-finding processes prompts too many lawyers and judges to reject even the most modest of proposals for jury reform.

However, within the last fifteen years, the model of treating jurors as passive spectators has been subject to significant criticism. Controversial acquittals, such as those in the O.J. Simpson and Rodney King cases, raised questions about the effect of bias on the criminal justice system, and spurred calls for jury reform.

It is not my intent to take any position on those well-known acquittals. Rather, my attention is drawn, for the purposes of this case, to certain observations that commentators made about the jury system in general in the wake of the calls for jury reform flowing from those verdicts. For example:

“Chief Judge Warren Urbom of the District of Nebraska has succinctly described the way we treat jurors: ‘Jurors are rarely brilliant and rarely stupid, but they are treated as both at once.’ We expect jurors to remember and understand brilliantly the facts and the law of complex cases, but often we think them too stupid to be trusted to take notes, ask questions, and in other ways take an active part in the acquisition and management of the information necessary to render an informed verdict.” William W. Schwarzer, Reforming Jury Trials, 1990 U. Chi. Legal. F. 119, reprinted in 132 F.R.D. 575, 590 (1991).

Social Science Research

The commentators urging jury reform considered substantial social science research that raised questions about whether the enforced passivity of American juries is productive.

For example, one observer commented that American juries are excessively passive, which “interferes with learning and reduces opportunities for jurors, individually and collectively, to perform to their potential as community representatives and decision makers in trials of criminal and civil cases.” B. Michael Dann, “Learning Lessons” and “Speaking Rights”: Creating Educated and Democratic Juries, 68 Ind. L.J. 1229, 1235 (Fall 1993).

Such interference with learning creates real problems. Obstacles to jury comprehension “produce trials which leave jurors floundering in a mass of disconnected and obscure evidence.” Schwarzer, 132 F.R.D. at 576.

Jurors confused by a lack of comprehension lose interest in the trial process. Dann, 68 Ind. L.J at 1241.

Concerns like these led reformers to a large and significant body of social science research about how human beings process information and learn. This research indicates that jurors are “active decision makers,” “rather than the mythical blank slates who wait until the close of a trial to decide a verdict.” Valerie P. Hans, Paula L. Hannaford & G. Thomas Munsterman, The Arizona Jury Reform Permitting Civil Jury Trial Discussions: The Views of Trial Participants, Judges, and Jurors, 32 U. Mich. J.L. Reform 349 (Winter 1999).

Indeed, “studies consistently disclose that ‘the juror is not a passive and altogether accurate encoder of information who suspends judgment until the end of the case.’ Behavioral research reveals that a ‘juror’s natural tendency is to actively process information as it is received as well as afterward, thus forming tentative judgments about evidence’ before deliberation.

“In a survey of criminal jurors, approximately 57% of the jurors stated they made up their mind prior to deliberations. In another study examining 783 civil and criminal jurors, 71% admitted they began deciding the case before retiring for deliberations. In fact, only a quarter of the jurors polled (26%) stated they retained an open mind throughout the trial and only began to reach a decision about the outcome of the case after deliberating with their colleagues.” Natasha K. Lakamp, Deliberating Juror Predeliberation Discussions: Should California Follow the Arizona Model?, 45 UCLA L.Rev. 845 (1998) (quoting Dann, 68 Ind. L.J. at 1263, and William H. Carlile, Power to the Jurors, Christian Sci. Monitor, Feb. 22, 1996).

“Further, critics of the passive juror model argue that it “flies in the face of what studies about adult learning have proven. The educational model of learning, in contrast to the legal model, has demonstrated conclusively that active learners are better learners. The educational model recognizes the reality that jurors bring with them their own frames of reference. The existence of these frames of reference underscores the need to have continuous feedback and the need to provide a legal frame of reference as early in the trial as possible.” Jacqueline A. Connor, Jury Reform: Notes on the Arizona Seminar, 1 J. Legal Advoc. & Prac. 25 (1999).

Implementing Reform in Civil Cases

“This compelling body of research prompted reforms. Arizona was the first state to act, appointing a commission to study the problem. The commission’s report, issued in 1994, stated that, according to this research, “limitation of all discussions among trial jurors and the accompanying assumption that jurors can and do suspend all judgments about the case are unnatural, unrealistic, mistaken and unwise.” Arizona Supreme Court Committee on More Effective Use of Juries, Jurors: The Power of 12 at 97 (1994).

To address this problem, the Arizona Supreme Court issued Ariz. R. Civ. P. 39(f), which states that, in civil cases, jurors

“shall be instructed that they will be permitted to discuss the evidence among themselves in the jury room during recesses from trial when all are present, as long as they reserve judgment about the outcome of the case until deliberations commence. Nothwithstanding the foregoing, the jurors’ discussion of the evidence among themselves during recesses may be limited or prohibited by the court for good cause.”

At least three empirical follow-up studies have been conducted, which all provided evidence that allowing jurors to engage in predeliberation discussions under this rule improved the trial process.

The first study, in 1996, surveyed Arizona trial court judges. The results indicated that the benefits of predeliberation discussions outweighed the concerns. Jurors were more alert and happy; they understood the case better; they reached verdicts quicker; and allowing predeliberation discussions did not seem to benefit one party over the other. Lakamp, 45 UCLA L.Rev. 845 at 871-73.

The second study sent surveys to jurors, judges, attorneys, and litigants who had participated in about 160 civil trials in 1997 and 1998. A high percentage of jurors and judges thought that jurors’ comprehension of the evidence improved, and that predeliberation discussions contributed to that improvement.

Further, about seventy percent of the judges did not think that allowing jurors to discuss the case before the presentation of evidence had been concluded resulted in the jurors reaching premature decisions about a verdict. Hans, 32 U. Mich. J.L. Reform at 367, 371-72.

The third study videotaped all juror discussions and deliberations in about fifty civil trials conducted between 1998 and 2002.

This study showed that deliberations were shorter; jurors understood expert testimony better; jurors were better able to clarify evidence and understand it accurately; the judge would have reached the same result as the jury in ninety percent of the cases; and, perhaps most important for the discussion here, there was no evidence that predeliberation discussions favored the plaintiff. Shari Seidman Diamond et al., Juror Discussions During Civil Trials: Studying an Arizona Innovation, 45 Ariz. L.Rev. 1, 62, 63-64, 71 (Spring 2003).

Colorado quickly followed Arizona’s lead. In 1996, our supreme court established the Committee on the Effective and Efficient Use of Juries in Colorado, which was tasked with studying the jury system here and recommending ways in which communication with jurors could be improved.

This process produced a series of reforms that became effective in our state on January 1, 1999. These included allowing jurors to take notes; providing them with trial notebooks; allowing them to ask questions of witnesses under the court’s careful supervision; and, in a pilot project in civil cases, allowing jurors to engage in predeliberation discussions. Rebecca L. Kourlis & John Leopold, Colorado Jury Reform, 29 Colo. Law. 21 (Feb.2000).

Surveys of jurors participating in the 53 civil jury trials involved in the project reported that 93% of the jurors thought that predeliberation discussions assisted them in understanding the evidence and avoiding confusion; and, although about 14% of the jurors reported that they thought discussions held during the trials encouraged jurors to reach a final decision before the trials’ end, 62% of the jurors emphatically disagreed with this contention. Id . at 22.

As a direct result of these conclusions, jurors in Colorado are now instructed about discussions during a civil trial:

“You may discuss the evidence during the trial, but only among yourselves and only in the jury room when all of you are present.

“You must not, individually or as a group, form final opinions about any fact or about the outcome of this case until after you have heard and considered all of the evidence, the closing arguments, and the rest of the instructions [the judge] will give you on the law. Keep an open mind during the trial. Form your final opinions only after you have discussed this case as a group in the jury room at the end of the trial.” CJI-Civ. 1:4 n. 2 (2000).

Predeliberation discussions promote, rather than discourage, group decision making.

If proper instructions are given, such discussions can deter jurors from locking in their positions, because the jurors remind one another of the need to follow the court’s instructions, and to keep an open mind until their deliberations begin.

Predeliberation discussions do not encourage premature judgments. Rather, such discussions may encourage jurors to keep their minds open.

Allowing jurors to engage in predeliberation discussions provides palpable benefits. Jurors understand the evidence better, they are less confused, and, in some circumstances, predeliberation discussions convince jurors to alter or reverse preliminary decisions about the case.

Research indicates that jurors often form opinions about the case and talk about it before final deliberations. Research further demonstrates that allowing predeliberation discussions can channel these normal human behavioral tendencies in a manner that improves the quality and fairness of deliberations.

As the Arizona committee that studied jury reform observed, research shows that the “limitation of all discussions among trial jurors and the accompanying assumption that jurors can and do suspend all judgments about the case are unnatural, unrealistic, mistaken and unwise.”

Deceased Patient’s Conduct Supported Inference That Doctor Failed to Provide Proper Warnings of Deadly Side Effects

2010-01-25T07:49:00.002-06:00

Providing a classic illustration of the important distinction between permitted inference versus improper speculation, the Connecticut Appellate Court reversed a directed verdict for a primary care physician in an informed consent case where there was no direct evidence that the doctor failed to warn a deceased patient about the danger that an oral contraceptive could cause blood clots.

Forty-five year old Leeann Curran died from bilateral pulmonary emboli, caused by deep vein thrombosis, four-weeks after her primary care physician, Dr. Kroll, prescribed an oral contraceptive for menopausal symptoms.

Because Curran was dead, there was no direct evidence that the doctor failed to give Curran proper warnings about the danger of blood clots. Instead, the administrator of Curran’s estate relied on evidence that Curran began complaining of intense pain in her legs and groin; told her family that she did not know what could be causing the pain; and failed to seek medical help for the condition.

According to Dr. Kroll, though, she warned Curran about the danger that the oral contraceptive could cause an increased risk of deadly blood clots – and also told Curran that the symptoms to watch out for included pain in the legs. However, Curran’s medical chart did not say that Dr. Kroll provided these warnings.

Granting a defense request for a directed verdict, the trial judge concluded that “a failure to warn claim could not be based solely on an inference that might be drawn from the decedent’s failure to seek help.” Curran v. Kroll, 118 Conn.App. 401 (2009).

Here are highlights of the Appellate Court’s opinion (with omissions not noted in the quoted text):

Although it is the jury’s right to draw logical deductions and make reasonable inferences from the facts proven, it may not resort to mere conjecture and speculation.

In this case, in which the court directed a verdict after concluding that the plaintiff had failed to provide any evidence, either direct or circumstantial, from which the jury reasonably could have concluded that Dr. Kroll had breached the standard of care by failing to advise the decedent of the signs and symptoms associated with the risks of birth control pills, we need only determine whether the court properly concluded that such evidence was absent from the case.

We agree that there was no direct evidence that Dr. Kroll breached the standard of care; this was so because the person who could have provided such evidence was dead.

We disagree, however, that there was no circumstantial evidence that could have led to a reasonable inference if the jury had chosen to credit such evidence.

There is no distinction between direct and circumstantial evidence so far as probative force is concerned. In fact, circumstantial evidence may be more certain, satisfying and persuasive than direct evidence.

After thoroughly reviewing the record, we conclude that there was evidence to support a reasonable inference that Dr. Kroll had not advised the decedent in accordance with the proper standard of care.

Unlike Aristotelian and Thomistic logic, law does not demand metaphysical certainty in its proofs. In law, we recognize three principal proofs: beyond a reasonable doubt, which is the very high burden in a criminal case; clear and convincing evidence, required to prove fraud and certain other claims, which equates to a very high probability; and preponderance of the evidence, applied to civil claims generally, which means it is more probable than not. None of these varying proofs require absolute certainty.

To meet one’s burden of proof, evidence is necessary. This evidence comes in two forms, direct and circumstantial.

“The basic distinction between direct and circumstantial evidence is that in the former instance the witnesses testify directly of their own knowledge as to the main facts to be proved, while in the latter case proof is given of facts and circumstances from which the jury may infer other connected facts which reasonably follow, according to common experience.” 29 Am.Jur.2d 329, Evidence § 313 (1994).

Proof of a fact by the use of circumstantial evidence usually involves a two-step process. A fact is first established by direct evidence, which is ordinarily eyewitness or other direct testimony. That direct evidence can serve as a basis from which the jury infers another fact. Thus, the direct evidence may operate as circumstantial evidence from which a fact is inferred by the jury.

“When the necessity to resort to circumstantial evidence arises either from the nature of the inquiry or the failure of direct proof, considerable latitude is allowed in its reception.” 29 Am.Jur.2d 331, Evidence § 315 (2008).

“An inference is a factual conclusion that can rationally be drawn from other facts. If fact A rationally supports the conclusion that fact B is also true, then B may be inferred from A.

“The process of drawing inferences based on a rough assessment of probabilities is what makes indirect or circumstantial evidence relevant at trial. If the inference (fact B from fact A) is strong enough, then fact A is relevant to prove fact B.

“Inferences are by their nature permissive, not mandatory: although the fact proved rationally supports the conclusion the offering party hopes will be inferred, the factfinder is free to accept or reject the inference.” 1 C. Fishman, Jones on Evidence (1992) § 4:1.

Much has been written about the jury’s ability to draw inferences, but, as explained by Professor McCormick, “in few areas of the law have so many words been spoken by the courts with so little conviction.” 2 C. McCormick, Evidence (5th Ed.1999) § 338.

Just because a jury could, but is not required to, draw an inference does not mean that it is resorting to speculation.

“Inferences are based on common experience and probability. Reasonable inferences permit the jury to find the inferred fact without direct proof of that fact. Direct evidence of a fact or facts will often give rise to circumstance evidence of other fact or facts. Such inferences, if reasonable, permit the fact finder to find the inferred fact without direct proof of that fact.

“A trier is entitled to draw all reasonable and logical inferences based on the facts proved. Inferences should be based on probabilities, not possibilities, surmise, or conjecture. To state a truism, the only kind of inference the law recognizes is a reasonable one.

“Successive inferences are permissible if justified by the facts. Thus, one inference can be founded upon facts whose determination is the result of other inferences. The only question is whether the successive inferences are rationally justified by the facts.” C. Tait & E. Prescott, Connecticut Evidence (4th Ed.2008) § 4.3.1.

In this case, the court directed a verdict on the ground that a failure to warn claim could not be based solely on an inference drawn from the decedent’s failure to seek help.

Although we agree with such a statement, we conclude that there was other evidence from which such an inference reasonably could have been drawn.

The line between permissible inference and impermissible speculation is not always easy to discern. When we infer, we derive a conclusion from proven facts because such considerations as experience, or history, or science have demonstrated that there is a likely correlation between those facts and the conclusion.

If that correlation is sufficiently compelling, the inference is reasonable. But if the correlation between the facts and the conclusion is slight, or if a different conclusion is more closely correlated with the facts than the chosen conclusion, the inference is less reasonable.

At some point, the link between the facts and the conclusion becomes so tenuous that we call it speculation. When that point is reached is, frankly, a matter of judgment.

Viewing the evidence in the light most favorable to the plaintiff, we conclude the jury reasonably could have found that the decedent did not seek help from the medical community because she had no idea what was the cause of her severe leg pain; such an inference would have been reasonable in this case because the decedent had told her husband that she could not figure out why she was experiencing pain in her groin, and she had expressed to her mother that she had no idea what was the cause of her pain, and further, this puzzlement occurred one month after her office visit with Dr. Kroll.

The jury could have inferred that the reason the decedent had no idea what was the cause of her leg pain was because Dr. Kroll had not informed her adequately of the risks associated with birth control pills and had not explained fully the signs and symptoms associated with such risks, especially that the use of the pill increased the possibility of blood clots, that blood clots could be life threatening and that severe leg pain was a symptom associated with blood clots, which must be dealt with immediately.

In the present case, the evidence, viewed in the light most favorable to the plaintiff, reasonably could have led the jury to find that Dr. Kroll prescribed the birth control pill to the decedent slightly more than four weeks before the decedent’s death, and that Dr. Kroll made no notation that she had given the decedent a proper warning of the risks and the signs and symptoms associated with such risks.

When the decedent experienced severe leg pain over the course of a couple of days, she had no idea what was the cause of that pain.

Additionally, the jury could have found that persons generally seek to follow instructions of a medical nature concerning the serious symptoms associated with the side effects of medication.

These findings could have led the jury to the reasonable inference that Dr. Kroll, four weeks before the decedent’s death, had not discussed the signs and symptoms associated with the risks of birth control pills adequately with the decedent, because, if she had discussed them adequately, the decedent would have known that this might be the cause of her pain.

The decedent’s complete lack of knowledge and puzzlement as to the cause of her pain, combined with other evidence, reasonably could have led the jury to the inference that the decedent had not been informed adequately by Dr. Kroll.

Accordingly, we conclude that the court should not have directed a verdict in favor of the defendants but should have given the jury the opportunity to weigh this evidence and decide the issue.

EVEN WHEN USED CAR IS SOLD “AS IS,” DEALER HAS LIMITED DUTY TO INSPECT FOR DANGEROUS DEFECTS

2010-01-18T11:27:00.003-06:00

When a used-car dealer sells a vehicle “as is,” thereby disclaiming contract warranties, do general principles of negligence law nevertheless call for imposing a duty of reasonable care on the dealer to inspect the vehicle for unreasonably dangerous defects?

“Most courts which have considered the issue have recognized a limited duty on the part of the dealer to inspect for patent safety defects existing at the time of sale,” the Nebraska Supreme Court recently noted in Wilke v. Woodhouse Ford, Inc., 278 Neb. 800 (2009).

As the Montana Supreme Court explained in 1980:

“When the ordinary person purchases a car ‘as is,’ he expects to have to perform certain repairs to keep the car in good condition. He does not expect to purchase a death trap. Public policy requires a used car dealer to inspect the cars he sells and to make sure they are in safe, working condition. This duty cannot be waived by the use of a magic talisman in the form of an ‘as is’ provision.” Kopischke v. First Continental Corp., 187 Mont. 471.

Applying general principles of negligence law in determining whether a used-car dealer owed a duty to inspect a vehicle before it was sold “as is,” the Nebraska Supreme Court in Wilke v. Woodhouse reasoned:

“There is a relatively great magnitude of risk of injury in the circumstance where an unknowing buyer drives off the dealer’s lot in a used vehicle which has a patent safety defect, such as defective brakes or steering.

“The dealer is better equipped than the purchaser to perceive such a defect before it causes harm. The nature of the risk is such that personal injury or death could result not only with respect to the purchaser of the defective vehicle, but to other members of the motoring public.

“The dealer has the earliest opportunity to discover and repair a patent safety defect in a used vehicle. An unknown safety defect existing at the time of sale poses foreseeable harm to the purchaser and the general public, and there exists a policy interest in requiring reasonable conduct on the part of the dealer to prevent such harm.

“We, therefore, hold that a commercial dealer of used vehicles intended for use on public streets and highways has a duty to conduct a reasonable inspection of the vehicle prior to sale in order to determine whether there are any patent defects existing at the time of sale which would make the vehicle unsafe for ordinary operation and, upon discovery of such a defect, to either repair it or warn a prospective purchaser of its existence.” Wilke v. Woodhouse Ford, Inc., 278 Neb. 800 (2009).

Here are highlights of the Nebraska Supreme Court’s opinion (with omissions not noted in the quoted text):

We have never before addressed whether a used-car dealer has a duty to its customers to inspect vehicles for safety defects before they are sold.

Most courts which have considered the issue have recognized a limited duty on the part of the dealer to inspect for patent safety defects existing at the time of sale.

For example, Minnesota courts have held that the seller of a used vehicle intended for use upon the public highways has a duty to the public using such highways to exercise reasonable care in supplying the purchaser with a vehicle which will not constitute a menace or source of danger, so that liability attaches to the seller for injuries which are the result of patent defects in the vehicle, or defects which could have been discovered in the exercise of reasonable care. Crothers by Crothers v. Cohen, 384 N.W.2d 562 (Minn.App.1986); Kothe v. Tysdale, 233 Minn. 163, 46 N.W.2d 233 (1951).

Ohio courts have held that even when a dealer sells a used vehicle “as is,” the dealer has a duty to exercise reasonable care in examining the vehicle to discover defects which would make the vehicle dangerous to users or those who might come in contact with them, and upon discovery, to correct those defects or at least give warning to the purchaser. Stamper v. Parr-Ruckman Home Town Motor Sales, 25 Ohio St.2d 1, 265 N.E.2d 785 (1971); Thrash v. U-Drive-It Co., 158 Ohio St. 465, 110 N.E.2d 419 (1953).

The Kentucky Court of Appeals has noted that used cars are more likely to be subject to mechanical defects than new vehicles and that the dealer is in a better position than the average consumer to “discover what defects might exist in any particular car to make it a menace to the public,” holding that “we are of the opinion it is not too harsh a rule to require these dealers to use reasonable care in inspecting used cars before resale to discover these defects, which the customer often cannot discover until too late.” Gaidry Motors v. Brannon, 268 S.W.2d 627, 629 (Ky.App.1954).

In Kopischke v. First Continental Corp., 187 Mont. 471 (1980), the Montana Supreme Court held that a used-car dealer had a duty to inspect a vehicle for safety defects prior to sale, notwithstanding the fact that the vehicle was sold “as is.” The court reasoned:

“When the ordinary person purchases a car ‘as is,’ he expects to have to perform certain repairs to keep the car in good condition. He does not expect to purchase a death trap. Public policy requires a used car dealer to inspect the cars he sells and to make sure they are in safe, working condition. This duty cannot be waived by the use of a magic talisman in the form of an ‘as is’ provision.

But courts which have recognized a duty on the part of used-car dealers to inspect for safety defects prior to sale have also emphasized that the duty is limited.

Courts have stated that used-car dealers are not insurers and therefore are not liable for latent defects in the vehicle.

Courts have limited the duty to inspect for patent defects affecting the minimum essentials for safe operation of the vehicle.

Dealers are not required to disassemble the vehicle to inspect for latent defects, and they are not responsible for the continuing safety of the vehicles they sell.

Applying our risk-utility test for the existence of a legal duty to use reasonable care, we conclude that there is a relatively great magnitude of risk of injury in the circumstance where an unknowing buyer drives off the dealer’s lot in a used vehicle which has a patent safety defect, such as defective brakes or steering.

The dealer is better equipped than the purchaser to perceive such a defect before it causes harm. The nature of the risk is such that personal injury or death could result not only with respect to the purchaser of the defective vehicle, but to other members of the motoring public.

The dealer has the earliest opportunity to discover and repair a patent safety defect in a used vehicle. An unknown safety defect existing at the time of sale poses foreseeable harm to the purchaser and the general public, and there exists a policy interest in requiring reasonable conduct on the part of the dealer to prevent such harm.

We, therefore, hold that a commercial dealer of used vehicles intended for use on public streets and highways has a duty to conduct a reasonable inspection of the vehicle prior to sale in order to determine whether there are any patent defects existing at the time of sale which would make the vehicle unsafe for ordinary operation and, upon discovery of such a defect, to either repair it or warn a prospective purchaser of its existence.

The dealer has no duty to disassemble the vehicle to discover latent defects or to anticipate the future development of safety defects which do not exist at the time of sale.

The tort duty we recognize today is not affected by a valid disclaimer or exclusion of U.C.C. warranties, because such contractual provisions do not absolve a seller from exercising reasonable care to prevent foreseeable harm.

Tort liability is not based upon representations or warranties. Rather, it is based upon a duty imposed by the law upon one who may foresee that his or her actions or failure to act may result in injury to others.

Abraham Lincoln’s Handwritten Complaint in Jasper Harris v. The Great Western Railroad (1854)

2010-01-11T10:36:00.001-06:00

In the Circuit Court of Sangamon County
March term A.D. 1854

State of Illinois SS.
Sangamon County

Jasper Harris, plaintiff, complains of The Great Western Railroad Company, defendant, being in custody etc. of a plea of trespass on the case – For that whereas heretofore towit, on the ___ day of November, in the year of our Lord one thousand eight hundred and fifty three at the county of Scott, towit, at the county aforesaid, the said Railroad Company were possessed of a certain Railroad and were then and there possessed of and using thereon certain Locomotive-steam-engines, tanks, cars etc. and then and there had in their employment, as servant and engineer, managing and running one of their Locomotive steam engines with a tank and with and without cars attached, on their said Railroad, one Edgar; and also said Railroad Company, then and there, had in their employment, as servant and conductor, in charge of the same Locomotive-steam-engine, thank and cars managed and run by said Edgar as engineer as aforesaid, one George Armstrong; and also said Railroad Company, then and there, had in their employment, as servant and brakeman, on and about the Locomotive-steam-engine, tank and cars, last aforesaid, the aforesaid plaintiff – And the plaintiff avers that it was, then and there, the duty of both said engineer and brakeman, severally, to obey the proper orders of said conductor, and then and there, was the duty of said Railroad Company by their engineer, whenever said Locomotive-steam-engine and whatever might be thereto attached, should be at rest, to not put the same in motion without the order of said conductor, not without giving a known signal of the intention to do so – Yet the said Railroad Company, on the day and year aforesaid and at the county aforesaid by their said engineer being then and there in their employment as aforesaid and in the prosecution of their lawful business aforesaid; and the said Locomotive-steam-engine, then and there being at rest, with said tank thereto attached, (and said plaintiff then and there being in the attempt to go aboard of said tank in obedience to the proper order of said conductor and without any fault on his
part) they, the said Railroad Company, by their said engineer, and without the order of said conductor, and without the giving of the signal aforesaid, put said engine and tank in motion, whereby said plaintiff was thrown down and his right foot, ankle, leg and thigh greatly torn, crushed and broken; so that thereby said plaintiff became and was sick, lame and disordered, and has so remained for a long space of time, towit for the period of four months; and also by means of which said wrong of said Railroad Company, amputation of his said right limb above the knee became and was necessary, and has actually been performed, and said limb has been wholly lost to said plaintiff; and other wrongs the said Railroad Company then and there did to the said plaintiff, and to his damage of ten thousand dollars and therefore he brings his suit etc.

Lincoln & Herndon, p.q.

If you want a digital, color copy of the complaint that Lincoln wrote for Jasper Harris, contact Cindy Stahler at stahler@hoeyfarina.com.

LINCOLN RIDES TO THE RESCUE OF INJURED RAILROADER

2010-01-04T11:01:00.000-06:00

Abraham Lincoln’s work as a lawyer for railroads is well known. But back in 1854, Lincoln sued Great Western Railroad Company for a severely injured brakeman named Jasper Harris.

According a three-page complaint that is in Lincoln’s handwriting, Harris’ right leg was amputated above the knee because of an accident that was caused by the negligence of a fellow employee named George Armstrong.

Closing the complaint, Lincoln asked the court to give Harris $10,000 in compensation. That would be nearly two million dollars today.

Although the pleading was signed on behalf of Lincoln & Herndon, historians have verified that the handwriting belongs to Lincoln.

This was a tough case for any lawyer, even a legendary trial and appellate advocate like Lincoln.

The first problem was that the Federal Employers’ Liability Act did not exist in 1854, and Illinois still followed the harsh contributory negligence rule.

Making a bad situation worse, the Illinois Supreme Court adopted the notorious fellow-servant rule – barring employees from suing for injuries caused by co-workers – a few months after Lincoln sued Great Western. Honner v. Illinois Central Railroad, 15 Ill. 550 (1854).

We are not sure exactly happened in Harris vs. Great Western. The old records say the case was dismissed – at Harris’ request – before the Illinois Supreme Court adopted the fellow-servant rule.

Did Great Western settle to avoid having to face the formidable Lincoln in court? And did Lincoln shrewdly forecast that the Illinois Supreme Court was going to adopt the fellow-servant rule?

At least we now have a high-quality color copy of Lincoln’s pleading for Jasper Harris.

Although a black-and-white microfilmed copy of the Harris complaint is available through the Lincoln legal papers project, we tracked the original complaint to the Lincoln Collection in the Library of Congress, and received permission to obtain a high-quality, digitized color-copy of pleading.

If you want a copy of the complaint that Lincoln wrote for Jasper Harris, contact Cindy Stahler at stahler@hoeyfarina.com.

IOWA SUPREME COURT ADOPTS THE DUTY ANALYSIS ADVOCATED BY THE RESTATEMENT (THIRD) OF TORTS

2009-12-28T10:27:00.001-06:00

Swerving to avoid an unanchored trampoline that sailed onto a gravel road during a thunderstorm, Charles Thompson’s car ran into a ditch and rolled several times. But when Thompson sued the nearby homeowners, James Kaczinski and Michelle Lockwood, for negligence in not properly securing the recreational equipment, the trial judge – using traditional foreseeability analysis – ruled that the defendants owed no duty to Thompson.

Adopting § 7 of the Restatement (Third) of Torts, the Iowa Supreme Court reversed.

The new Restatement expressly rejects using foreseeability as a factor in reaching a no-duty determination negligence cases. Instead, § 7(a) of the new Restatement says:

“An actor ordinarily has a duty to exercise reasonable care when the actor’s conduct creates a risk of physical harm.”

With § 7(a), the Iowa Supreme Court explained, “in most cases involving physical harm, courts need not concern themselves with the existence or content of this ordinary duty, but instead may proceed directly to the elements of liability set forth in section 6.”

According to § 6, “An actor whose negligence is a factual cause of physical harm is subject to liability for any such harm within the scope of liability, unless the court determines that the ordinary duty of reasonable care is inapplicable.”

This, the Iowa Supreme Court recounted, means that:

“The general duty of reasonable care will apply in most cases, and thus courts can rely directly on § 6 and need not refer to duty on a case-by-case basis.

“However, in exceptional cases, the general duty to exercise reasonable care can be displaced or modified. An exceptional case is one in which an articulated countervailing principle or policy warrants denying or limiting liability in a particular class of cases.

“In such an exceptional case, when the court rules as a matter of law that no duty is owed by actors in a category of cases, the ruling should be explained and justified based on articulated policies or principles that justify exempting such actors from liability or modifying the ordinary duty of reasonable care.”

Turning to the question of foreseeability, the Iowa Supreme Court continued:

“The drafters acknowledge that courts have frequently used foreseeability in no-duty determinations, but have now explicitly disapproved the practice in the Restatement (Third) and limited no-duty rulings to ‘articulated policy or principle in order to facilitate more transparent explanations of the reasons for a no-duty ruling and to protect the traditional function of the jury as factfinder.’” Thompson v. Kaczinski, 2009 WL 3786631 (Iowa) (November 13, 2009).

Here are highlights of the Iowa Supreme Court’s opinion on the modern approach to no-duty analysis (with omissions not noted in the quoted text):

Our cases have suggested three factors should be considered in determining whether a duty to exercise reasonable care exists: (1) the relationship between the parties, (2) reasonable foreseeability of harm to the person who is injured, and (3) public policy considerations.

Our previous decisions have characterized the proposition that the relationship giving rise to a duty of care must be premised on the foreseeability of harm to the injured person as a fundamental rule of negligence law.

The factors have not been viewed as three distinct and necessary elements, but rather as considerations employed in a balancing process.

In the end, whether a duty exists is a policy decision based upon all relevant considerations that guide us to conclude a particular person is entitled to be protected from a particular type of harm.

The role of foreseeability of risk in the assessment of duty in negligence actions has recently been revisited by drafters of the Restatement (Third) of Torts.

“An actor ordinarily has a duty to exercise reasonable care when the actor’s conduct creates a risk of physical harm.” Restatement (Third) of Torts: Liab. for Physical Harm § 7(a) (2005).

Thus, in most cases involving physical harm, courts “need not concern themselves with the existence or content of this ordinary duty,” but instead may proceed directly to the elements of liability set forth in section 6. § 6 cmt. f.

The general duty of reasonable care will apply in most cases, and thus courts “can rely directly on § 6 and need not refer to duty on a case-by-case basis.” § 7 cmt. a.

However, in exceptional cases, the general duty to exercise reasonable care can be displaced or modified. Id. § 6 cmt. f, at 81-82. An exceptional case is one in which “an articulated countervailing principle or policy warrants denying or limiting liability in a particular class of cases.” Id. § 7(b), at 90.

In such an exceptional case, when the court rules as a matter of law that no duty is owed by actors in a category of cases, the ruling “should be explained and justified based on articulated policies or principles that justify exempting [such] actors from liability or modifying the ordinary duty of reasonable care.” § 7 cmt. j.

Reasons of policy and principle justifying a departure from the general duty to exercise reasonable care do not depend on the foreseeability of harm based on the specific facts of a case. Id.

“A lack of foreseeable risk in a specific case may be a basis for a no-breach determination, but such a ruling is not a no-duty determination.” Id.

The assessment of the foreseeability of a risk is allocated by the Restatement (Third) to the fact finder, to be considered when the jury decides if the defendant failed to exercise reasonable care.

“Foreseeable risk is an element in the determination of negligence. In order to determine whether appropriate care was exercised, the factfinder must assess the foreseeable risk at the time of the defendant’s alleged negligence.

“The extent of foreseeable risk depends on the specific facts of the case and cannot be usefully assessed for a category of cases; small changes in the facts may make a dramatic change in how much risk is foreseeable. Courts should leave such determinations to juries unless no reasonable person could differ on the matter.” Id. at 97-98.

The drafters acknowledge that courts have frequently used foreseeability in no-duty determinations, but have now explicitly disapproved the practice in the Restatement (Third) and limited no-duty rulings to “articulated policy or principle in order to facilitate more transparent explanations of the reasons for a no-duty ruling and to protect the traditional function of the jury as factfinder.” Id. at 98-99.

We find the drafters’ clarification of the duty analysis in the Restatement (Third) compelling, and we now, therefore, adopt it.

The district court clearly considered foreseeability in concluding the defendants owed no duty in this case. When the consideration of foreseeability is removed from the determination of duty, as we now hold it should be, there remains the question of whether a principle or strong policy consideration justifies the exemption of Kaczinski and Lockwood – as part of a class of defendants – from the duty to exercise reasonable care.

We conclude no such principle or policy consideration exempts property owners from a duty to exercise reasonable care to avoid the placement of obstructions on a roadway. In fact, we have previously noted the public’s interest in ensuring roadways are safe and clear of dangerous obstructions for travelers:

“While an abutting landowner is not liable with respect to highway hazards over which he has no control, he is under an obligation to use reasonable care to keep his premises in such condition as not to create hazards in the adjoining highway. He must conduct operations on his land in such a manner as not to injure the highway traveler.” Weber v. Madison, 251 N.W.2d 523 (Iowa 1977).

Accordingly, we conclude the district court erred in determining Kaczinski and Lockwood owed no common law duty under the circumstances presented here.

COURT ADOPTS “RESTATEMENT OF PROPERTY” AS EXCEPTION TO “ECONOMIC LOSS RULE” AGAINST CONDO DEVELOPER

2009-12-21T11:31:00.002-06:00

Section 6.20 of the Restatement (Third) of Property: Servitudes (2000), lists a series of duties that a condominium developer owes to a condo association and its members.

According to Section 6.20:

“Until the developer relinquishes control of the association to the members, the developer owes the following duties to the association and its members:

“(1) to use reasonable care and prudence in managing and maintaining the common property;

“(2) to establish a sound fiscal basis for the association by imposing and collecting assessments and establishing reserves for the maintenance and replacement of common property;

“(3) to disclose the amount by which the developer is providing or subsidizing services that the association is or will be obligated to provide;

“(4) to maintain records and to account for the financial affairs of the association from its inception;

“(5) to comply with and enforce the terms of the governing documents, including design controls, land-use restrictions, and the payment of assessments;

“(6) to disclose all material facts and circumstances affecting the condition of the property that the association is responsible for maintaining; and

“(7) to disclose all material facts and circumstances affecting the financial condition of the association, including the interest of the developer and the developer's affiliates in any contract, lease, or other agreement entered into by the association.”

In a case where a condo association pursued tort claims against a developer for water seepage and building subsidence – and the developer argued the claims were barred by the economic loss doctrine – the Utah Supreme Court adopted Section 6.20’s “limited fiduciary duty” as the source of an independent duty that was “outside the scope of the economic loss rule.” Davencourt at Pilgrims Landing Homeowners Ass’n v. Davencourt at Pilgrims Landing, LC, 2009 WL 3151197 (Utah) (October 2, 2009).

Davencourt at Pilgrims Landing, LC – the developer of a planned unit development in Utah – was managed by its member, LeGrand Woolstenhulme.

The developer, acting through Woolstenhulme, initially controlled the Davencourt at Pilgrim’s Landing Townhome Owners’ Association.

Several years after the association was turned over to the purchasers, water began seeping into the buildings.

According to the association, the developer had been warned, before construction, that the project was on collapsible subsurface soils that would subside if not properly prepared.

Post-construction subsidence allegedly caused sever damage to the structures, and the association sued the developer and Woolstenhulme, among others.

The claims against the developer and Woolstenhulme included negligence, negligent misrepresentation, misrepresentation and nondisclosure, and breach of fiduciary duties.

Invoking the economic loss rule, the trial judge dismissed these claims – but the Utah Supreme Court reversed. Here are highlights of the Supreme Court’s analysis (with omissions not noted in the text):

The economic loss rule is a judicially created doctrine that marks the fundamental boundary between contract law, which protects expectancy interests created through agreement between the parties, and tort law, which protects individuals and their property from physical harm by imposing a duty of reasonable care.

Absent physical property damage (i.e., damage to other property) or bodily injury, this doctrine prohibits recovery of economic losses. Economic losses are defined as:

Damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits – without any claim of personal injury or damage to other property – as well as the diminution in the value of the product because it is inferior in quality and does not work for the general purposes for which it was manufactured and sold.

Where the economic loss rule is at issue, the initial inquiry becomes whether a duty exists independent of any contractual obligations between the parties.

If we find that an independent duty exists under the law, the economic loss rule does not bar a tort claim because the claim is based on a recognized independent duty of care and thus does not fall within the scope of the rule.

The question of whether a duty exists is a question of law and involves the examination of the legal relationships between the parties, an analysis of the duties created by these relationships, and policy judgments applied to relationships.

The Limited Fiduciary Duty Owed by a Developer in Control of a Homeowner’s Association Falls Outside the Scope of the Economic Loss Rule

The Association argues that the district court erred where it ruled that the Developer and Woolstenhulme owed no duty or that “any duty the developer had to the homeowners association would essentially be to itself.”

The Association emphasizes that because the Developer and Woolstenhulme established and initially operated the Association, they owed the Association a fiduciary duty that lies outside the economic loss rule.

We agree to an extent with the Association.

We have yet to consider what, if any, duty a developer owes where it establishes and initially controls a homeowners association.

The Association urges us to impose a broad fiduciary duty under the Utah Revised Nonprofit Corporation Act. The Act requires directors and officers of a nonprofit corporation to discharge their duties in good faith, with the care of an ordinarily prudent person in a like position under similar circumstances and according to the best interests of the corporation.

While the Act may serve as a basis for imposing a broad fiduciary duty in a nonprofit setting, the inherent conflict that a developer faces in promoting and marketing property for a profit, while simultaneously ensuring the interests of a homeowners association and its members, causes us to look elsewhere.

The Restatement (Third) of Property offers guidance. It recognizes that a developer owes certain limited duties to an association and its members. Section 6.20 of the Restatement provides:

“Until the developer relinquishes control of the association to the members, the developer owes the following duties to the association and its members:

“(1) to use reasonable care and prudence in managing and maintaining the common property;

“(2) to establish a sound fiscal basis for the association by imposing and collecting assessments and establishing reserves for the maintenance and replacement of common property;

“(3) to disclose the amount by which the developer is providing or subsidizing services that the association is or will be obligated to provide;

“(4) to maintain records and to account for the financial affairs of the association from its inception;

“(5) to comply with and enforce the terms of the governing documents, including design controls, land-use restrictions, and the payment of assessments;

“(6) to disclose all material facts and circumstances affecting the condition of the property that the association is responsible for maintaining; and

“(7) to disclose all material facts and circumstances affecting the financial condition of the association, including the interest of the developer and the developer’s affiliates in any contract, lease, or other agreement entered into by the association.” Restatement (Third) of Property: Servitudes § 6.20 (2000).

We agree with this articulation of the duties owed in such a relationship and adopt this section of the Restatement.

We also embrace the Restatement’s concept of the fine line drawn between a typical fiduciary duty and this limited fiduciary duty.

This concept arises from the nature of the developer’s relationship with the association and its members. The Restatement expounds that “treating the developer and its appointees to the board as trustees overstates the fiduciary component of the relationship.” Id. cmt. a.

Given the developer’s self-interest, “the developer cannot be expected to act solely in the interests for the association and the homeowners. Conflicts of interest are inherent in the developer’s role while it retains control of the association.” Id.

While the developer thus should not be a fiduciary in the broadest sense, we are nonetheless convinced that the developer’s control in this nonprofit association requires certain interests of the members and the association be protected. This is achieved by the limited fiduciary duty.

In adopting this limited fiduciary duty, we recognize that it constitutes a newly-recognized independent duty of care in Utah. This recognition comports with our past treatment of independent duties. For example, we have imposed an independent duty on real estate agents, who, though not occupying a fiduciary relationship, are expected to be honest, ethical, and competent and have a direct relationship with purchasers.

The limited fiduciary duty between a developer and an association or its members also constitutes a type of special relationship that gives rise to an independent duty. See, e.g., Grynberg v. Agri Tech, Inc., 10 P.3d 1267, 1271 (Colo.2000) (citing to cases wherein fiduciary relationships, such as attorney-client relationship, physician-patient relationship, or insurer-insured relationship, “automatically triggered independent duties of care”).

And despite the recovery of what would otherwise be considered economic loss damages, claims arising under a fiduciary duty, similar to fraud claims, lie outside the scope of the economic loss rule.

Therefore, because a limited fiduciary duty constitutes an independent duty of care, tort claims brought under this duty fall outside the scope of the economic loss rule.

This limited fiduciary duty does not permit any and all tort claims to be brought. Instead, only those tort claims that stem from this independent, limited fiduciary duty are permitted.

Recovery by the Association is therefore restricted to the common areas.

The Association may only bring its claims for negligence and negligent misrepresentation in relation to the Developer’s and Woolstenhulme’s failures to use reasonable care and prudence in managing and maintaining the common property, to establish a sound fiscal basis for the Association by imposing and collecting assessments and establishing reserves for the maintenance and replacement of common property, and to disclose all material facts and circumstances affecting the condition of the property that the Association is responsible for maintaining.

Consequently, the claims of negligence per se and nuisance, which the Association predicated respectively on noncompliance with the building code and the intrusion of water, do not arise from the fiduciary duty and are thus precluded by the economic loss rule.

Accordingly, we hold that the Developer and Woolstenhulme owed an independent duty to the Association, and we reverse the district court on this point.

The Association may bring its claims for negligence and negligent misrepresentation against the Developer and Woolstenhulme insofar as the claims stem from the limited fiduciary duty owed.

On remand, certain factual questions regarding the scope of the fiduciary duty should be resolved, including when the Developer and Woolstenhulme relinquished control of the Association, an act that would mark the termination of the duty owed.

COURT CLARIFIES “PROXIMATE CAUSATION”

2009-12-14T10:43:00.002-06:00

The traditional approach to proximate causation focuses on the foreseeability of the harm suffered by the plaintiff. For example, Illinois Pattern Jury Instruction (Civil) 15.01 defines “proximate cause” as “a cause that, in the natural or ordinary course of events, produced the plaintiff’s injury.”

Rejecting the old terminology as confusing, Section 29 of the new Restatement (Third) of Torts explains that the phrase “proximate cause” is “a poor one to describe limits on the scope of liability.” Comment b.

“Even if judges and lawyers understand the term,” the Restatement explains, “it is confusing for a jury. Courts should craft instructions that inform the jury that, for liability to be imposed, the harm that occurred must be one that results from the hazards that made the conduct tortious in the first place.” Comment b.

To clarify causal limits on tort liability, the new Restatement focuses on risk of harm – and whether the injury suffered by the plaintiff was within the category of harms that were threatened by the type of tortious conduct engaged in by the defendant.

As articulated in Section 29:

“An actor’s liability is limited to those physical harms that result from the risks that made the actor’s conduct tortious.”

Providing a useful review of the new approach to proximate cause, the Iowa Supreme Court reversed a judgment of $838,000 for fraud.

The case involved an alleged misrepresentation by a bank president about the plaintiff’s liability on a personal guaranty. Yet the verdict included damages for the insolvency of a new business venture.

Although the plaintiff was entitled to some damages for fraud by the bank, the harm suffered by the plaintiff when his new business became insolvent was not within the risk of harm presented by the banker’s misrepresentation about liability under a personal guaranty. So the case was remanded for re-trial on damages.

As the Iowa Supreme Court explained:

“The modern trend is to refocus the analysis of legal causation from the foreseeability of harm to a risk-based standard. See Restatement (Third) of Torts, Liability for Physical Harm § 29 cmt. j (Proposed Final Draft No. 1 2005).

“In negligence cases causing physical harm, tort liability now focuses on whether the risk that produces liability actually caused the damages suffered. The scope of liability is limited to harms that result from the risks that made the actor’s conduct tortious.

“The shift in analysis has primarily occurred to clarify the often confusing concept of legal causation, not to change the substantive scope of liability.”

“Stated in terms of risk instead of foreseeability,” the high court continued, “this principle limits the scope of liability for tortious conduct by requiring the conduct to have enhanced (at the time the defendant acted) the chances of the harm occurring or that it would increase the chances (risk) of a similar accident (harm) in the future if the defendant should repeat the same wrong.

“In other words, a tortfeasor is not liable to a person whom he intended to harm and who has been harmed, unless from the standpoint of a reasonable man, his act has in some degree increased the risk of that harm.” Spreitzer v. Hawkeye State Bank, 2009 WL 3486740 (Iowa) (October 30, 2009).

Joseph Spreitzer alleged that he signed a personal guaranty for a $1.5 million loan to a new business – Walker Manufacturing – because of a deceptive statement by a bank president, Ray Glass, about Spreitzer’s potential liability.

Although the guaranty said that Spreitzer was 100% liable as guarantor on the entire $1.5 million loan, Spreitzer testified that Glass told him that he would only be liable for $750,000 if there was a default – and that the bank would pursue the co-guarantor (Byron Ross) for $750,000.

Glass was a friend of Ross and, at the time, Glass reportedly knew – but failed to inform Spreitzer – that Ross had arranged his financial affairs so that he was judgment proof.

According to Spreitzer, “but for” the fraud involving the guaranty, he would not have signed the guaranty – and would not have pumped $663,000 into Walker Manufacturing.

When Walker tanked and the bank sued Spreitzer on the guaranty, he wound up settling with the bank for $750,000.

Spreitzer nevertheless sued the bank for fraud, contending that – but for the deceit – he would not have signed the guaranty, and would not have invested $663,000 in the new business.

Meanwhile, as the result of separate litigation that netted $319,000, Spreitzer wound up mitigating his investment loss.

Back in the fraud case, the verdict for Spreitzer – $838,000 – included damages for his investment of $663,000 in the defunct firm.

Reversing, the Iowa Supreme Court explained that a fraudulent statement caused Spreitzer to sign the guarantee – and might have been a cause-in-fact of the investment loss.

Applying the harm-within-risk analysis, though, the high court concluded that Spreitzer’s damages were limited to the type of damages that were within the risk of harm that was threatened by the fraudulent statement about the guaranty.

Here are highlights of the Iowa Supreme Court’s opinion (with omissions not noted in the text):

As with other torts, it is generally recognized the causation element of a fraud claim is composed of both factual and legal causation of the loss. See W. Page Keeton, Prosser & Keeton on the Law of Torts § 110, at 767 (5th ed.1984) [hereinafter Prosser & Keeton].

Under the Restatement, the fraudulent misrepresentation must not only be a factual cause of the loss, but it must also be a legal cause. Restatement (Second) of Torts §§ 546 (factual cause), 548A (legal cause). Each must be satisfied.

The factual causation component addresses the question whether the representation, that is believed to be true but is actually fraudulent, caused the losses in some way. If the plaintiff did not rely on the representation in entering into the transaction in which the losses were suffered, the representation is not in fact a cause of the loss. Restatement (Second) of Torts § 546 cmt. a.

In this case, sufficient evidence was presented to support a finding by the jury that the misrepresentation to equally enforce the personal guaranty was a factual cause of the losses suffered by Spreitzer.

Based on the evidence, the jury could have found Spreitzer would not have suffered the losses he claims because he would not have invested in the business and would not have signed the new personal guaranty that was ultimately enforced against him if he had known the representation was false.

In applying the “but for” test of factual causation, we conclude there was sufficient evidence that the losses claimed would not have occurred “but for” Spreitzer’s reliance on the false representation.

The legal causation component goes further to address the question whether the losses that in fact resulted from the reliance were connected to the misrepresentation in a way to which the law attaches legal significance.

Legal causation is a critical component of the causation element of the tort of fraud. Without legal causation, the chain of losses resulting from an investment would be virtually limitless. See Movitz v. First Nat’l Bank of Chicago, 148 F.3d 760, 762 (7th Cir.1998) (explaining importance of requiring more than mere “but for” causation in assigning legal responsibility for a plaintiff’s loss).

Contractual counterparties would become virtual insurers against the risks inherent in business investing.

The modern trend is to refocus the analysis of legal causation from the foreseeability of harm to a risk-based standard. See Restatement (Third) of Torts, Liability for Physical Harm § 29 cmt. j (Proposed Final Draft No. 1 2005). In negligence cases causing physical harm, tort liability now focuses on whether the risk that produces liability actually caused the damages suffered. The scope of liability is limited to harms that result from the risks that made the actor’s conduct tortious. The shift in analysis has primarily occurred to clarify the often confusing concept of legal causation, not to change the substantive scope of liability.

We readily acknowledge legal causation for intentional torts often reaches a broader range of damages for harm than legal causation reaches in cases involving unintentional torts. This principle may also apply to intentional torts involving nonphysical harm, including fraud actions involving lost investments. Nevertheless, the cases are in accord that even a willful or intentional tortfeasor does not become an insurer of the safety of those whom he has wronged.

As with the scope of liability for unintentional torts, “intentional and reckless tortfeasors are not liable for harms whose risks were not increased by the tortious conduct, even if that conduct was a factual cause of the harm.” Restatement (Third) of Torts, Liability for Physical Harm § 33(c) & cmt. f.

Even though the authors of the venerable Prosser treatise on torts have traditionally used foreseeability to frame this component of legal causation, the substantive rule that has been charted essentially remains unchanged:

“In general and with only a few exceptions, the courts have restricted recovery to those losses which might have expected to follow from the fraud and from those events that are reasonably foreseeable. But if false statements are made in connection with the sale of corporate stock, losses due to a subsequent decline in the market, or insolvency of the corporation brought about by business conditions or other factors that in no way relate to the representations, will not afford any basis for recovery. It is only where the fact misstated was of a nature calculated to bring about such a result that damages for it can be recovered.” Prosser & Keeton, at 767.

Stated in terms of risk instead of foreseeability, this principle limits the scope of liability for tortious conduct by requiring the conduct to have “enhanced (at the time the defendant acted) the chances of the harm occurring or that it would increase the chances (risk) of a similar accident (harm) in the future if the defendant should repeat the same wrong.” Zuchowicz v. United States, 140 F.3d 381, 388 n. 7 (2d Cir.1998).

In other words, a tortfeasor is not liable to a person whom he intended to harm and who has been harmed, unless from the standpoint of a reasonable man, his act has in some degree increased the risk of that harm.

This risk-based approach is compatible with a long-established principle of legal causation, reflected in time-honored cases. For example, in Berry v. Sugar Notch Borough, 191 Pa. 345, 43 A. 240 (Pa.1899), a speeding trolley car was struck by a falling tree. The court held the causation requirement was not met. Id. at 240.

“This result was correct since, although the accident would not have occurred but for the trolley’s speeding, speeding does not increase the probability of trees falling on trolleys.” Zuchowicz, 140 F.3d at 388 n. 7.

Legal causation in fraudulent-representation cases requires, at a minimum, that the tortious aspect of the conduct increased the risk of the damages claimed. This amount of damage is distinguishable from the greater universe of losses caused by the mere fact that a false representation induced the investment.

Generally, an investor invests in a business operation to obtain a return on the investment through the receipt of profits from the operation of the business, through the future sale of the business at a profit, or through the sale of the investor’s interest in the business.

In this case, the business purchased by Spreitzer failed within a relatively short period of time, and Spreitzer never realized any operational business profits from his investment of $663,000.

Spreitzer failed to explain how the false promise to equally enforce the personal guaranty of the business debt between the coguarantors increased the risk of unprofitability of the business, and we can discern no such explanation from the record.

While some damages relating to the diminution of company assets could satisfy the legal causation standard, the amount would be limited by legal causation to those assets that were likely diminished by the tortious aspect of the bank’s conduct.

The tortious aspect of Glass’ conduct was the falsity of his representation regarding equal enforcement of the guaranty.

Even though the falsity of the promise increased the likelihood the bank would forego satisfaction from Ross, the falsity of the promise did not affect the amount of money the bank would have actually collected from Ross were the guarantee to be enforced equally.

Consequently, Spreitzer’s losses cannot exceed the amount of money he would have recovered from the company if the bank had equally pursued both coguarantors as promised.
We conclude there was insufficient evidence to support the jury award of $838,000. The record does not contain evidence of $838,000 of damages that were increased by the tortious aspect – the falsity – of the fraudulent misrepresentation at issue.

COURT OKAYS MEDICAL-MONITORING CLAIMS

2009-12-07T10:38:00.003-06:00

Proclaiming that tort law “must adapt to the growing recognition that exposure to toxic substances and radiation may cause substantial injury which should be compensable even if the full effects are not immediately apparent,” a landmark ruling from the Supreme Judicial Court of Massachusetts approved medical-monitoring claims in October.

“When competent medical testimony establishes that medical monitoring is necessary to detect the potential onset of a serious illness or disease due to physiological changes indicating a substantial increase in risk of harm from exposure to a known hazardous substance,” the high court concluded, “the element of injury and damage will have been satisfied and the cost of that monitoring is recoverable in tort.

“No particular level or quantification of increase in risk of harm is necessary, so long as it is substantial and so long as there has been at least a corresponding subcellular change.”

Moreover, “medical expenses are recoverable not only for direct treatment and diagnosis of a present injury or an injury likely to occur, but for diagnostic tests needed to monitor medically a person who has been substantially exposed to a toxic substance that has created physiological changes indicating a substantial increase in risk that the person will contract a serious illness or disease.

“The expense of medical monitoring is thus a form of future medical expense and should be treated as such.” Donovan v. Philip Morris USA, Inc. 455 Mass. 215 (October 19, 2009).

A group of plaintiffs who alleged that they smoked or still smoke Marlboro cigarettes, but do not have lung cancer, filed a class action in federal court demanding a “court-supervised program of medical surveillance for early detection of lung cancer utilizing a technique known as low-dose computed tomography (LDCT) scans of the chest.”

The district judge asked the Massachusetts high court whether the complaint alleged a valid claim under local tort law.

Here are highlights of the Supreme Judicial Court’s ruling (with omissions not noted in the text):

The plaintiffs allege and argue that they seek not a remedy, but a court-ordered, court-supervised program of medical surveillance for early detection of lung cancer utilizing LDCT scans.

They further contend that without this program they have no adequate remedy at law, and that injunctive relief establishing such a program is necessary.

No class has been certified, and the first certified question asks only if the complaint states a cognizable claim under Massachusetts law. We therefore consider the question in the context of a dispute between two individuals, and leave the idea of a “program” to consideration of the question of class certification.

We address only the named plaintiffs and their individual claims.

We conclude that the plaintiffs have stated a claim under Massachusetts law for future medical expenses that may be satisfied by an adequate remedy at law.

The plaintiffs argue that they have sustained a present injury in the form of objectively observable and identifiable damage to the tissues and structures of their lungs resulting in a substantially increased risk of cancer, and that this injury was caused by Philip Morris’s negligence in the design and manufacture of Marlboro cigarettes.

They further argue that, under traditional tort principles, this injury entitles them to present and future medical expenses, which they have styled “medical monitoring,” to ascertain whether they have in fact contracted cancer.

Philip Morris contends that the plaintiffs have not established the essential element of a manifest physical injury, that is, physical harm manifested by objective symptomology.

The elements of a claim of negligence, generally, are (1) negligence, that is, the failure of a responsible person, either by omission or by action, to exercise that degree of care, vigilance and forethought which, in the discharge of the duty then resting on him, the person of ordinary caution and prudence ought to exercise under the particular circumstances; (2) the causal connection between the defendant’s negligence and the plaintiff’s injury or damage; and (3) damages. See Jupin v. Kask, 447 Mass. 141, 146, 849 N.E.2d 829 (2006).

“’Damages’ is the word which expresses in dollars and cents the injury sustained by a plaintiff.” Turcotte v. DeWitt, 333 Mass. 389, 392 (1955). Injury and damages are the focus of the parties’ briefs.

At trial the plaintiffs will have the burden of proving each element of a negligence claim by a preponderance of the evidence.

Negligence in the abstract does not support a cause of action. A negligence action may not be maintained unless one has suffered injury or damage.

Under our law of negligence injury and damages are integrally related: there can be no invasion of the rights of another unless legal damage is caused, and for that reason nominal damages cannot be recovered.

Generally, the measure of damages in negligence for personal injury is fair compensation for the resulting injuries, which includes pain and suffering; reasonable expenses incurred for medical care and nursing in the treatment and cure of the injury; diminution in earning capacity; and pain and suffering and such medical expenses and diminution in earning capacity as are shown to be reasonably probable to continue in the future.

With respect to future damages, a plaintiff is entitled to compensation for all damages that reasonably are to be expected to follow, but not to those that possibly may follow, the injury which he has suffered.

He is not restricted to compensation for suffering and expense which by a fair preponderance of the evidence he has proved will inevitably follow. He is entitled to compensation for suffering and expense which by a fair preponderance of the evidence he has satisfied the jury reasonably are to be expected to follow, so far as human knowledge can foretell.

There are many cases where the suffering and expense following an injury cannot be foretold with exactness. The fact that suffering and expense cannot always be foretold with exactness is a fact which the jury have to deal with in determining what suffering and expense reasonably will follow as distinguished from what possibly may follow.

Future damages must be reduced to an amount as of the date of the filing of the complaint.

The plaintiffs are not suing for pain and suffering or diminution of earning capacity. They have not contracted cancer, and they do not allege they are likely to contract cancer in the immediate future as a result of the alleged negligence of Philip Morris.

The plaintiffs do not ask us to extend the holding in Matsuyama v. Birnbaum, 452 Mass. 1 (2008), which recognized loss of chance as a theory of injury in a wrongful death action based on medical malpractice, or recognize increased risk of cancer as a basis for rewarding the full range of tort damages.

It is important to realize that the plaintiffs are suing only for medical expenses reasonably to be incurred because of the alleged negligence of Philip Morris.

In its simplest and most straightforward form, the plaintiffs’ complaint seeks only present and future medical expenses for diagnostic LDCT scans to determine the onset of cancer at the earliest practicable time for the purpose of maximizing the effective treatment of the disease.

These damages are indeed the only presently provable damages for the impact these plaintiffs have suffered as a result of the alleged negligence of Philip Morris.

Philip Morris contends that our jurisprudence requires proof of physical harm manifested by objective symptomology as a necessary part of damages.

We disagree.

This requirement applies to claims of negligent infliction of emotional distress, as a safeguard against false claims. See Payton v. Abbott Labs, 386 Mass. 540 (1982).

The plaintiffs do not seek damages for emotional distress. They are seeking only reasonable medical expenses for diagnostic tests.

There can be no doubt that an infant negligently and violently shaken by someone may recover expenses for diagnostic tests determined to be medically necessary under the standard of care to ascertain whether the child suffered a brain injury, even if those test results are negative.

Similarly, a pedestrian negligently struck by a (non “no-fault”) motorist may recover expenses for diagnostic tests determined to be medically necessary under the standard of care to ascertain the existence of internal injuries absent any external injuries, even if those tests produce negative results.

In those instances outward manifestations of physical harm would not be required.

In the instant case the plaintiffs have produced sufficient proof of “impact” to safeguard against false claims: they have proffered evidence of physiological changes caused by smoking, and they have proffered expert medical testimony that, because of these physiological changes, they are at a substantially greater risk of cancer due to the negligence of Philip Morris.

Modern living has exposed people to a variety of toxic substances. Illness and disease from exposure to these substances are often latent, not manifesting themselves for years or even decades after the exposure.

Some people so exposed may never develop an illness or disease, but some will. Subcellular or other physiological changes may occur which, in themselves, are not symptoms of any illness or disease, but are warning signs to a trained physician that the patient has developed a condition that indicates a substantial increase in risk of contracting a serious illness or disease and thus the patient will require periodic monitoring.

Not all cases will involve physiological change manifesting a known illness, but such cases should be allowed to proceed when a plaintiff’s reasonable medical expenses have increased (or are likely to increase, in the exercise of due care) as a result of these physiological changes.

We leave for another day consideration of cases that involve exposure to levels of chemicals or radiation known to cause cancer, for which immediate medical monitoring may be medically necessary although no symptoms or subclinical changes have occurred.

Here, the physiological changes with the attendant substantial increase in risk of cancer, and the medical necessity of monitoring with its attendant cost, may adequately establish the elements of injury and damages.

Our tort law developed in the late Nineteenth and early Twentieth centuries, when the vast majority of tortious injuries were caused by blunt trauma and mechanical forces.

We must adapt to the growing recognition that exposure to toxic substances and radiation may cause substantial injury which should be compensable even if the full effects are not immediately apparent.

When competent medical testimony establishes that medical monitoring is necessary to detect the potential onset of a serious illness or disease due to physiological changes indicating a substantial increase in risk of harm from exposure to a known hazardous substance, the element of injury and damage will have been satisfied and the cost of that monitoring is recoverable in tort.

No particular level or quantification of increase in risk of harm is necessary, so long as it is substantial and so long as there has been at least a corresponding subcellular change. This should address any concern over false claims, yet permit a genuinely injured person to recover legitimate expenses without having to overcome insurmountable problems of proof in this difficult and complex area.

In this respect, medical expenses are recoverable not only for direct treatment and diagnosis of a present injury or an injury likely to occur, but for diagnostic tests needed to monitor medically a person who has been substantially exposed to a toxic substance that has created physiological changes indicating a substantial increase in risk that the person will contract a serious illness or disease.

The expense of medical monitoring is thus a form of future medical expense and should be treated as such.

In conclusion, each plaintiff must prove the following.

(1) The defendant’s negligence (2) caused (3) the plaintiff to become exposed to a hazardous substance that produced, at least, subcellular changes that substantially increased the risk of serious disease, illness, or injury (4) for which an effective medical test for reliable early detection exists, (5) and early detection, combined with prompt and effective treatment, will significantly decrease the risk of death or the severity of the disease, illness or injury, and (6) such diagnostic medical examinations are reasonably (and periodically) necessary, conformably with the standard of care, and (7) the present value of the reasonable cost of such tests and care, as of the date of the filing of the complaint.

Proof of these elements usually will require competent expert testimony.

We address a related issue. The very nature of this type of action raises the question whether the “single controversy rule,” which requires a party to include in the action all related claims against the opposing party, would bar a future action for damages in the event a plaintiff subsequently contracts cancer.

This rule was never intended to address the problem of toxic torts, where a disease may be manifested years after the exposure.

In this context, the rule acts as a deterrent to persons seeking early detection of catastrophic disease, and it would expose both plaintiffs and defendants to far more serious consequences should the disease later manifest itself in an advanced stage. Such a result makes no sense.

Finally, as the Supreme Court of New Jersey noted, the single controversy rule would not apply because the subsequent cause of action would not accrue until the disease is manifested. See Ayers v. Jackson, 106 N.J. 557 (1987).

For these reasons we conclude that, in the context of toxic torts, the single controversy rule does not bar a subsequent action for negligence if one of these plaintiffs actually contracts cancer.

COURT ADOPTS NEW RESTATEMENT FOR “ENHANCED INJURY” CLAIMS

2009-11-30T11:21:00.000-06:00

In the decades after Larsen v. General Motors Corp., 391 F.2d 495 (8th Cir.1968), approved enhanced injury claims – based on the conclusion that a car company has a “reasonable duty of care in the design of its vehicle consonant with the state of the art to minimize the effect of accidents” – judges and scholars have debated: (1) plaintiff’s burden-of-proof on apportioning harm; and (2) whether principles of comparative fault apply.

On the first question, the Huddell approach obligates the plaintiff to prove that the “sole cause” of an enhanced injury was a product defect – meaning that the plaintiff has the burden of apportioning the loss.

An alternative line of cases – called the Fox-Mitchell approach – merely requires the plaintiff to prove that the product defect was a “substantial factor” in causing harm that exceeded the damages that would have otherwise been caused in the underlying accident.

As for the second question, the majority rule is that the usual principles on concurrent causation and contributory fault apply in enhanced injury cases.

Section 16(c) of the Restatement (Third) of Torts: Products Liability adopts the Fox-Mitchell approach to burdens-of-proof in enhanced injury cases, while section 17(b) applies general principles of comparative fault.

Sorting through the “clash of court cases and academic antlers,” the Iowa Supreme Court adopted sections 16 and 17 of the new Restatement. Jahn v. Hyundai Motor Co., 2009 WL 3232781 (October 9, 2009).

Glen Jahn was seriously injured when Grace Burke zoomed past a stop sign and rammed into the side of his Hyundai Elantra. Exacerbating the harm, the driver-side airbag on the Elantra allegedly failed to function.

After settling with Burke, Jahn sued Hyundai Motor America (HMA), alleging enhanced injury because of a product defect.

A federal district judge asked the Iowa Supreme Court whether it would adopt sections 16 and 17.

Section 16 provides:

“(a) When a product is defective at the time of commercial sale or other distribution and the defect is a substantial factor in increasing the plaintiff’s harm beyond that which would have resulted from other causes, the product seller is subject to liability for the increased harm.

“(b) If proof supports a determination of the harm that would have resulted from other causes in the absence of the product defect, the product seller’s liability is limited to the increased harm attributable solely to the product defect.

“(c) If proof does not support a determination under Subsection (b) of the harm that would have resulted in the absence of the product defect, the product seller is liable for all of the plaintiff’s harm attributable to the defect and other causes.

“(d) A seller of a defective product that is held liable for part of the harm suffered by the plaintiff under Subsection (b), or all of the harm suffered by plaintiff under Subsection (c), is jointly and severally liable or severally liable with other parties who bear legal responsibility for causing the harm, determined by the applicable rules of joint and several liability.”

And Section 17 says:

“(a) A plaintiff’s recovery of damages for harm caused by a product defect may be reduced if the conduct of the plaintiff combines with the product defect to cause the harm and the plaintiff’s conduct fails to conform to generally applicable rules establishing appropriate standards of care.

“(b) The manner and extent of the reduction under Subsection (a) and the apportionment of plaintiff’s recovery among multiple defendants are governed by generally applicable rules apportioning responsibility.”

Here are highlights of the Supreme Court’s opinion (with omissions not noted in the text):

As late as 1966, courts rejected the notion that a product manufacturer could be liable for defective products where the negligence of another party was the cause of the underlying accident.

The rationale was generally that manufacturers could be held liable only for injuries resulting from intended use. Despite the forseeability of automobile collisions, they were not considered an intended use.

In the seminal case of Larsen v. General Motors Corp., 391 F.2d 495 (8th Cir.1968), the Eighth Circuit broke new ground. The court noted, “No rational basis exists for limiting recovery to situations where the defect in design or manufacture was the causative factor of the accident, as the accident and the resulting injury all are foreseeable.”

As a result, the Larsen court saw no reason “why the manufacturer should not be held to a reasonable duty of care in the design of its vehicle consonant with the state of the art to minimize the effect of accidents.”

The Larsen approach was further refined by the Fourth Circuit in Dreisonstok v. Volkswagenwerk, A. G., 489 F.2d 1066 (4th Cir.1974).

In Dreisonstok, the court stated that a manufacturer’s duty extended only to designing a vehicle to avoid “unreasonable risk of injury in the event of a collision.” Dreisonstok, 489 F.2d at 1070 n. 11. See generally Barry Levenstam & Daryl J. Lapp, Plaintiff’s Burden of Proving Enhanced Injury in Crashworthiness Cases: A Clash Worthy of Analysis, 38 DePaul L.Rev. 55, 61 (1988) [hereinafter Levenstam & Lapp].

Under an enhanced injury theory, the product defect is not the cause of the initial accident. As a result, the manufacturer cannot be held liable for injuries arising out of the initial collision.

The manufacturer, however, is liable for enhanced injuries over and above the injuries caused by the initial collision.

Burden of proof

A question arises regarding the plaintiff’s burden of proof to sustain an enhanced injury claim.

One line of cases, often named the Huddell approach after a leading case, holds that the plaintiff has the burden of showing that the “sole cause” of the enhanced injury was a product defect. See Huddell v. Levin, 537 F.2d 726 (3d Cir.1976).

According to the court in Huddell, a plaintiff in an enhanced injury case must prove: (1) the existence of a safer, practicable, alternative design, (2) the extent of the injuries the plaintiff would have suffered had the alternative design been used, and (3) “some method of establishing the extent of enhanced injuries attributable to the defective design.” Id. at 737-38.

The Huddell approach was elaborated upon in Caiazzo v. Volkswagenwerk A. G., 647 F.2d 241 (2d Cir.1981).

In Caiazzo, the court stressed that the plaintiff had the burden of showing not only the fact of enhanced injury but the extent of enhanced injuries attributable to the defective design.

According to Caiazzo, if the plaintiff cannot identify what portion of the injury occurred as a result of the design defect by a preponderance of evidence, the enhanced injury claim fails.

The practical impact of the Huddell rule as applied in Caiazzo is that the plaintiff has the burden of apportioning the loss and loses his enhanced injury claim if he fails to offer proof of apportionment.

This approach has been adopted in a number of cases. See, e.g., Barris v. Bob’s Drag Chutes & Safety Equip., Inc., 685 F.2d 94 (3d Cir.1982) (applying Pennsylvania law); Dawson v. Chrysler Corp., 630 F.2d 950 (3d Cir.1980) (applying New Jersey law).

The Huddell approach pulls apart and segregates the injuries and, as a result, principles of joint and several liability do not apply in an enhanced injury case.

A second line of cases imposes a less stringent proof requirement on plaintiffs. Under this second line of cases, often referred to as the Fox-Mitchell approach, the plaintiff must prove only that the product defect was a “substantial factor” in creating damage greater than that attributable solely to the underlying accident. See Mitchell v. Volkswagenwerk, AG, 669 F.2d 1199 (8th Cir.1982); Fox v. Ford Motor Co., 575 F.2d 774 (10th Cir.1978).

If the factfinder is unable to segregate the harm caused by the initial collision from the harm caused by the product defect, the manufacturer is liable for the entire injury.

The rationale of the Fox-Mitchell approach is generally that injuries are often indivisible and that the Huddell approach imposes an unfair burden by requiring the plaintiff to “prove the impossible.”

In addition, the Huddell approach is criticized as inconsistent with orthodox concurrent tortfeasor theory in which apportionment of injuries is not required to impose joint liability for the entire injury.

As is apparent, the Fox-Mitchell approach, which has been adopted in a number of cases, see, e.g., Fouche v. Chrysler Motors Corp., 103 Idaho 249 (Idaho Ct.App.1982); Lee v. Volkswagen of Am., Inc., 688 P.2d 1283 (Okla.1984), produces the opposite result of Huddell in the event of indivisible injury.

Under Huddell, the plaintiff has the burden of showing apportionment, usually through expert testimony, and has no enhanced injury claim if the claim is indivisible.

Application of comparative fault

Another disputed issue relates to the relationship between enhanced injury claims and comparative fault.

The majority view is that the principle of concurrent causation applies to cases involving enhanced injuries and, as a result, the principles of comparative fault apply. See, e.g., Montag by Montag v. Honda Motor Co., 75 F.3d 1414 (10th Cir.1996); Gen. Motors Corp. v. Farnsworth, 965 P.2d 1209 (Alaska 1998); Daly v. Gen. Motors Corp., 20 Cal.3d 725 (Cal.1978); Estate of Hunter v. Gen. Motors Corp., 729 So.2d 1264 (Miss.1999); Harsh v. Petroll, 584 Pa. 606 (Pa.2005); Duncan v. Cessna Aircraft Co., 665 S.W.2d 414 (Tex.1984).

The majority view may be supported in part on the ground that it imposes upon users the responsibility to safely use products and that it would be unfair to impose costs of substandard plaintiff conduct on manufacturers, who would presumably pass on some or all of those costs to users and consumers, including those who use and consume products safely and wisely. See William J. McNichols, The Relevance of the Plaintiff’s Misconduct in Strict Tort Products Liability, the Advent of Comparative Responsibility, and the Proposed Restatement (Third) of Torts, 47 Okla. L.Rev. 201, 283-84 (1994).

A minority of cases, however, do not apply comparative fault principles or at least limit their application in the enhanced injury context. See, e.g., Binakonsky v. Ford Motor Co., 133 F.3d 281 (4th Cir.1998); D’Amario v. Ford Motor Co., 806 So.2d 424 (Fla.2001); Andrews v. Harley Davidson, Inc., 106 Nev. 533 (Nev.1990); Green v. Gen. Motors Corp., 310 N.J.Super. 507 (N.J.Super.Ct.App.Div.1998); Alami v. Volkswagen of Am., Inc., 97 N.Y.2d 281 (N.Y.2002).

Some of these cases, however, arise in jurisdictions applying contributory negligence and may have been motivated by a desire to prevent the harsh result of completely denying a plaintiff recovery where the plaintiff’s negligence was modest.

The minority viewpoint has its adherents in the academic literature. See generally Robert C. Reichert, Limitations on Manufacturer Liability in Second Collision Actions, 43 Mont. L.Rev. 109 (1982).

The reasoning behind the minority line of cases is often that a manufacturer has a duty to minimize the injurious effect of a crash no matter how the crash is caused and has a duty to anticipate foreseeable negligence of users and third parties.

As noted by the New Jersey Supreme Court, “once it is established that the defendant has a duty to protect persons from the consequences of their own foreseeable faulty conduct, it makes no sense to deny recovery because of the nature of the plaintiff’s conduct.” Green v. Sterling Extruder Corp., 95 N.J. 263 (N.J.1984) (quoting Patricia Marschall, An Obvious Wrong Does Not Make a Right: Manufacturer’s Liability for Patently Dangerous Products, 48 N.Y.U. L.Rev. 1065, 1088 (1973)).

This viewpoint was reiterated in Jimenez, where the court observed that “the concept of ‘enhanced injury’ effectively apportions fault and damages on a comparative basis; defendant is liable only for the increased injury caused by its own conduct, not for the injury resulting from the crash itself.” Jimenez v. Chrysler Corp., 74 F.Supp.2d 548 (D.S.C.1999), rev’d in part and vacated in part by Jimenez v. DaimlerChrysler Corp., 269 F.3d 439 (4th Cir.2001).

In addition, some cases support the minority rule on the ground that product manufacturers should be encouraged to design products that protect the user in the event of an accident. Andrews, 796 P.2d at 1095.

Restatement (Third) of Torts.

Against the above clash of court cases and academic antlers, the American Law Institute in the Restatement (Third) of Torts: Products Liability considered the proper approach to enhanced injury claims in sections 16 and 17.

Section 16 of the Restatement (Third): Products Liability provides:

“(a) When a product is defective at the time of commercial sale or other distribution and the defect is a substantial factor in increasing the plaintiff’s harm beyond that which would have resulted from other causes, the product seller is subject to liability for the increased harm.

“(b) If proof supports a determination of the harm that would have resulted from other causes in the absence of the product defect, the product seller’s liability is limited to the increased harm attributable solely to the product defect.

“(c) If proof does not support a determination under Subsection (b) of the harm that would have resulted in the absence of the product defect, the product seller is liable for all of the plaintiff’s harm attributable to the defect and other causes.

“(d) A seller of a defective product that is held liable for part of the harm suffered by the plaintiff under Subsection (b), or all of the harm suffered by plaintiff under Subsection (c), is jointly and severally liable or severally liable with other parties who bear legal responsibility for causing the harm, determined by the applicable rules of joint and several liability.” Restatement (Third) of Torts: Products Liability § 16 (1998).

Section 17 provides:

“(a) A plaintiff’s recovery of damages for harm caused by a product defect may be reduced if the conduct of the plaintiff combines with the product defect to cause the harm and the plaintiff’s conduct fails to conform to generally applicable rules establishing appropriate standards of care.

“(b) The manner and extent of the reduction under Subsection (a) and the apportionment of plaintiff’s recovery among multiple defendants are governed by generally applicable rules apportioning responsibility.” Id. § 17, at 256.

With respect to the issue of indivisible harm in an enhanced injury case, the language of section 16(c) supports the Fox-Mitchell approach.

This interpretation is confirmed by the Reporter’s Note to section 16, which expressly states that the Fox-Mitchell approach is the majority viewpoint and is embraced in the Restatement (Third).

The Reporter’s Note emphasizes, however, that section 16(c) does not formally shift any burden of proof to the defendant. Instead, according to the Reporter’s Note,

“if the plaintiff has established that the product defect increased the harm over and above that which the plaintiff would have suffered had the product been nondefective, and if, at the close of the case, proof does not support a determination of the harm that would have resulted in the absence of the product defect, then the defendant is liable for all the harm suffered by the plaintiff.”

On the issue of application of comparative fault, the Restatement (Third) section 17(b) indicates that generally applicable comparative fault principles should apply among multiple defendants.

The official comments to section 17, however, address only the issue of apportionment of plaintiffs’ fault. The Reporter’s Note emphasizes that a majority of courts utilize comparative fault to reduce the recoveries of product liability plaintiffs, but does not discuss the issue of applying comparative fault principles among defendants.

Adoption of Fox-Mitchell Approach to Causation and Rejection of Divisible Injury Requirement

As stated in the Reporter’s Note, the Restatement (Third) section 16(c) expressly adopts the Fox-Mitchell approach to indivisible harm.

Although Hubbell has a few adherents, on this issue of first impression, we adopt the Fox-Mitchell approach. We believe the Fox-Mitchell approach to causation and the rejection of a requirement that plaintiff show a divisible harm is the soundest approach.

Specifically, we hold that in an enhanced injury case, the plaintiff has the burden of showing the fact of enhanced injury. This burden can be met by offering evidence that the design defect was a substantial cause of injury above and beyond that which would have occurred without the design defect. There is no requirement that a plaintiff prove a divisible injury.

We regard the above statement of law as consistent with Restatement (Third) of Torts: Products Liability section 16(b) and (c).

Application of Comparative Fault and Joint and Several Liability

In light of the Restatement (Third), the evolving case law from other jurisdictions, we align our law with the Restatement (Third) and the majority of jurisdictions.

Conclusion.

We adopt the Fox-Mitchell approach to the required causation in enhanced injury cases.

We further hold that the principles of comparative fault and joint and several liability apply in enhanced injury cases.

Court Uses New Restatement To Clarify “Substantial Factor” Test

2009-11-23T10:27:00.003-06:00

Trying to prove causation, 27 plaintiffs who alleged bodily injury from exposure to radiation in Uravan, Colorado, invoked the substantial factor test from the Restatement (Second) of Torts.

To clarify this doctrine, the 10^th U.S. Circuit Court of Appeals turned to the “the more precise, and clearer, treatment of multiple possible causes in the Proposed Final Draft of the Restatement (Third) of Torts: Liability for Physical Harm.”

“Roughly speaking,” the 10^th Circuit explained – affirming summary judgment for the defendants – “under the Restatements a Plaintiff could recover from Defendants only if either (1) Uravan radiation was a but-for cause of the Plaintiff’s ailments or (2) that radiation (either alone or with other factors) would have caused the ailments.”

Although the American Law Institute approved the proposed final draft on Liability for Physical Harm, publication is being held up by work on other portions of the new Restatement. Yet, the 10^th Circuit explained, “the ultimate legal standards in the two Restatements are essentially identical for our purposes.”

“To sum up,” the Court of Appeals recounted – after providing a useful introduction to the new Restatement’s “innovative” notion of “causal sets” – “as we understand the Restatement (Second) and the Restatement (Third), a defendant cannot be liable to the plaintiff unless its conduct is either (a) a but-for cause of the plaintiff’s injury or (b) a necessary component of a causal set that (probably) would have caused the injury in the absence of other causes.” June v. Union Carbide Corp., 577 F.3d 1234 (10^th Cir.) (2009).

The plaintiffs alleged that they or their decedents suffered bodily injury from exposure to radiation in Uravan, Colorado.

Named after the metals mined in the area – uranium and vanadium – Uravan was contaminated from the radioactive residue of operations to process uranium ore.

When the radiation hazard was recognized and Uravan was placed on the EPA’s National Priorities List in 1986, the residents were evacuated and the entire town was torn down.

The 27 bodily-injury plaintiffs sued Union Carbide Corporation and Umetco Minerals Corporation in federal court. Eleven of these claimants contend that the exposure to radiation caused nonthyroid cancer, while 16 alleged thyroid disease (including one case of thyroid cancer).

Another group of plaintiffs pursued medical-monitoring claims under a federal law: the Price-Anderson Nuclear Industries Indemnity Act.

Granting defense requests for summary judgment, the district judge ruled that (1) the bodily injury claimants failed to establish causation, and (2) medical-monitoring claims are not permitted under the Price-Anderson Act.

On appeal, the bodily injury claimants argued that they did not have to prove but-for causation. Instead, they maintained, they merely had to prove that exposure to radiation in the tailings left behind after milling uranium ore in Uravan was a substantial factor in causing their cancers and thyroid diseases.

Contending that negligence by the defendants in exposing them to radiation was a “legal cause” of their bodily injuries, the 27 plaintiffs invoked the substantial-factor test from Section 431 of the Restatement (Second) of Torts § 431.

According to Section 431,

“The actor’s negligent conduct is a legal cause of harm to another if (a) his conduct is a substantial factor in bringing about the harm, and (b) there is no rule of law relieving the actor from liability because of the manner in which his negligence has resulted in the harm.”

The bodily injury plaintiffs also relied on the portion of Comment a that says:

“The word ‘substantial’ is used to denote the fact that the defendant’s conduct has such an effect in producing the harm as to lead reasonable men to regard it as a cause, using the word in the popular sense, in which there always lurks the idea of responsibility . . . .”

Here are highlights of the 10^th Circuit’s opinion (with omissions not noted in the text):

The term substantial factor appears in the treatment of causation in the Restatement (Second) of Torts (as well as its predecessor, the original Restatement of Torts). It has been abandoned, however, in the Restatement (Third) of Torts because of the misunderstanding that it has engendered. See id. § 26 cmt. j.

Causation under the Restatement (Third) has two components. First, the tortious conduct must be the “factual cause” of the physical harm to the plaintiff. See id. §§ 26, 27.

Ordinarily, a cause is a “factual cause” only if it is a but-for cause, see id. § 26, although there is a potential exception, which we will discuss shortly, when there are multiple causes, see id. § 27.

Second, the harm must be among the “harms that result from the risks that made the actor’s conduct tortious.” Id. § 29.

Traditionally, this second component has been referred to as “proximate cause,” a term that has baffled law students (to say nothing of jurors, lawyers, and judges) for generations; but the Restatement (Third) has wisely redescribed the subject matter as “scope of liability.” See id. Ch. 6, Special Note on Proximate Cause; id. § 29 cmt. b.

We need not dwell on this topic – the focus of our attention is on factual cause – but an illustration in the Restatement (Third) conveys what is necessary to show that an injury factually caused by the defendant is within the scope of liability:

“Richard, a hunter, finishes his day in the field and stops at a friend’s house while walking home. His friend’s nine-year-old daughter, Kim, greets Richard, who hands his loaded shotgun to her as he enters the house. Kim drops the shotgun, which lands on her toe, breaking it. Although Richard was negligent for giving Kim his shotgun, the risk that made Richard negligent was that Kim might shoot someone with the gun, not that she would drop it and hurt herself (the gun was neither especially heavy nor unwieldy). Kim’s broken toe is outside the scope of Richard’s liability, even though Richard’s tortious conduct was a factual cause of Kim’s harm.” Id. cmt. b, illus. 3.

Returning to the concept of factual cause, § 26 states that “conduct is a factual cause of harm when the harm would not have occurred absent the conduct.”

As comment b to the section states, this standard “is familiarly referred to as the ‘but-for’ test.” That test “requires a counterfactual inquiry” in which the court considers “what would have occurred if the actor had not engaged in the tortious conduct.” Id. cmt. e.

If the harm complained of would have occurred notwithstanding the actor’s conduct, then that conduct is not a but-for cause. See id.

Section 27, however, recognizes that it is sometimes appropriate to impose liability even when the harm would have occurred without the defendant’s act. This exceptional circumstance is narrowly defined to impose liability only “when a tortfeasor’s conduct, while not necessary for the outcome, would have been a factual cause if the other competing cause had not been operating.” Id. § 27 cmt. a.

The black letter of § 27 states: “If multiple acts exist, each of which alone would have been a factual cause under § 26 of the physical harm at the same time, each act is regarded as a factual cause of the harm.” Again, an illustration clarifies the concept:

“Rosaria and Vincenzo were independently camping in a heavily forested campground. Each one had a campfire, and each negligently failed to ensure that the fire was extinguished upon retiring for the night. Due to unusually dry forest conditions and a stiff wind, both campfires escaped their sites and began a forest fire. The two fires, burning out of control, joined together and engulfed Centurion Company’s hunting lodge, destroying it. Either fire alone would have destroyed the lodge. Each of Rosaria’s and Vincenzo’s negligence is a factual cause of the destruction of Centurion’s hunting lodge.” Id. cmt. a, illus. 1.

The formulation of the requirements for causation in the Restatement (Third) employs different nomenclature from that in the Restatement (Second), but it does not impose a stricter requirement for factual causation. We explain.

Section 430 of the Restatement (Second) states that a negligent person is liable for another’s harm only if the negligent conduct was a “legal cause” of the harm.

Section 431 then introduces the notion of “substantial factor,” stating that “negligent conduct is a legal cause of harm to another if ... his conduct is a substantial factor in bringing about the harm” and no rule of law exempts him from liability.

Section 433 sets forth considerations that are “important in determining whether the actor’s conduct is a substantial factor in bringing about harm to another.” Those considerations are:

“(a) the number of other factors which contribute in producing the harm and the extent of the effect which they have in producing it; (b) whether the actor’s conduct has created a force or series of forces which are in continuous and active operation up to the time of the harm, or has created a situation harmless unless acted upon by other forces for which the actor is not responsible; (c) lapse of time.” Restatement (Second) of Torts § 433.

Reading the black letter of §§ 430, 431, and 433, one could easily conclude that courts and juries have substantial leeway to depart from but-for causation in imposing liability. It would appear to be enough if the considerations listed in § 433 suggest that liability is appropriate.

This is how Plaintiffs appear to understand the doctrine. But this conclusion cannot stand once one reads § 432, which imposes a requirement for liability that is at least as stringent as the factual-cause requirement in the Restatement (Third).

Section 432(1) sets forth the general requirement of but-for causation; and § 432(2) recognizes what has become the exception in Restatement (Third) § 27 for “multiple sufficient causes.” Section 432 states:

“(1) Except as stated in Subsection (2), the actor’s negligent conduct is not a substantial factor in bringing about harm to another if the harm would have been sustained even if the actor had not been negligent.

“(2) If two forces are actively operating, one because of the actor’s negligence, the other not because of any misconduct on his part, and each of itself is sufficient to bring about the harm to another, the actor’s negligence may be found to be a substantial factor in bringing it about.”

Thus, as we understand the substantial-factor requirement in the Restatement (Second), it adopts essentially the same standard for factual cause as the Restatement (Third). And that standard is different from what Plaintiffs advocate.

What Plaintiffs would apparently use to determine whether conduct is a substantial factor – the conditions set forth in § 433 – are actually limitations on what conduct can qualify as a substantial factor.

Once conduct satisfies one of the alternative requirements in § 432(1) and (2) – which in the Restatement (Third) §§ 26, 27 are the alternative grounds for being a factual cause – it must still qualify under § 433 if it is to be considered a substantial factor. (The counterpart to § 433 in the Restatement (Third) is § 36, which states that “when an actor’s negligent conduct constitutes only a trivial contribution to a causal set that is a factual cause of physical harm under § 27, the harm is not within the scope of liability.” An actor’s trivial contribution thus would still be a factual cause, but the actor would not be liable because the harm was outside the scope of liability. It should be noted that § 36, unlike Restatement (Second) § 433, applies only to one of multiple sufficient causes, not to a but-for factual cause.)

There are two further nuances regarding factual cause that need to be explained: the notion of causal sets and the meaning of the term sufficient cause.

The notion of a causal set is a helpful innovation in the Restatement (Third). A number of factors (often innocent) generally must coexist for a tortfeasor’s conduct to result in injury to the plaintiff.

Even when the defendant drives his car into the plaintiff’s car, no injury would have resulted if the plaintiff had not entered her car and driven to the accident site. That there are many factors does not mean that the defendant’s conduct was not a cause. As comment c to § 26 of the Restatement (Third) explains:

“A useful model for understanding factual causation is to conceive of a set made up of each of the necessary conditions for plaintiff’s harm. Absent any one of the elements of the set, the plaintiff’s harm would not have occurred. Thus, there will always be multiple (some say, infinite) factual causes of a harm, although most will not be of significance for tort law and many will be unidentified. That there are a large number of causes of an event does not mean that everything is a cause of an event. The vast majority of acts, omissions, and other factors play no role in causing any discrete event.

“This causal-set model does not imply any chronological relationship among the causal elements involved, although all causes must precede the plaintiff’s harm. An actor’s tortious conduct may occur well before the other person suffers harm and require a number of subsequent events to produce the harm. Thus, a gas valve negligently constructed may not fail for many years. Toxic substances may be sold without adequate warnings but not produce harm for decades. Conversely, the tortious conduct may occur after a number of other necessary events have already occurred but close in time to the occurrence of harm. Nor does this model imply any relationship among the causal elements; causal elements may operate independently, as when a property owner neglects a patch of ice on a sidewalk and a careless pedestrian fails to notice the condition, producing a fall.”

When § 27 of the Restatement (Third) speaks of “multiple sufficient causes,” it could more precisely speak of “multiple sufficient causal sets.” See id. § 27 cmt. f.

For example, the evidence at trial may show (1) that conditions A, B, C, D, E, and F were present; (2) that if only A, B, and C had been present, the injury would probably have occurred; and (3) that if only D, E, and F had been present, the injury would probably have occurred.

If F is the defendant’s misconduct, then F was not a but-for cause of the injury; even without F, the injury would have occurred (all it took was A, B, and C). But since D, E, and F would also have caused the injury, F is a component of a second causal set.

F must, of course, be a necessary component of the second causal set to be a factual cause of the injury. See id. That is, F would not be a factual cause if D and E alone would have been enough to cause the injury; F must be a “but for” component of at least one causal set for liability to attach.

Moreover, multiple causal sets may share some components. If A, B, and C would probably have caused the injury (with each of A, B, and C being necessary) and so would have A, B, and D, the tortfeasor who committed D would be liable. The Restatement (Third) provides the following example:

“Able, Baker, and Charlie, acting independently but simultaneously, each negligently lean on Paul’s car, which is parked at a scenic overlook at the edge of a mountain. Their combined force results in the car rolling over the edge of a diminutive curbstone and plummeting down the mountain to its destruction. The force exerted by each of Able, Baker, and Charlie would have been insufficient to propel Paul’s car past the curbstone, but the combined force of any two of them is sufficient. Able, Baker, and Charlie are each a factual cause of the destruction of Paul’s car.” Id. § 26 cmt. f, illus. 3.

A real-world example would be a typical asbestosis lawsuit. A person suffering from asbestosis may have been exposed to asbestos from a number of sources (say, four), and the total exposure may have been more than enough to cause asbestosis.

It may well be (1) that asbestosis would probably have arisen even without exposure of the victim to Source A, so Source A is not a but-for cause; and (2) that Source A by itself would not have caused asbestosis. But Source A may be a factual cause if it was a necessary component of a causal set that included, say, two of the other sources and the three together would probably have caused asbestosis.

Finally, we attempt to dispel some confusion that may arise from use of the word sufficient in the provisions of the Restatement (Second) and the Restatement (Third) that provide an alternative to but-for causation in limited circumstances.

Restatement (Second) § 432(2) employs the phrase “forces . . . sufficient to bring about harm to another” and Restatement (Third) § 27 is entitled “Multiple Sufficient Causes.”

The use of the word sufficient in both Restatements does not mean that either of them would impose liability for conduct that is not a but-for cause if only the conduct could have caused the injury. Rather, it is necessary for the plaintiff to show that the conduct (or the causal set of which it is a necessary part) would in fact have caused the injury.

As we all know, in the modern world of many hazardous substances, there may be many possible causes of a particular cancer. Each could be said to be sufficient to cause a specific person’s cancer. But one who suffers that cancer does not have a cause of action based on each such substance to which he was exposed, regardless of how unlikely it is that the cancer resulted from that exposure.

Only a substance that would have actually (that is, probably) caused the cancer can be a factual cause without being a but-for cause. This is clear in the black letter of Restatement (Third) § 27, which states:

“If multiple acts exist, each of which alone would have been a factual cause under § 26 of the physical harm at the same time, each act is regarded as a factual cause of the harm.” Id. (emphasis added).

And the illustrations to the section confirm this reading. We have already quoted the illustrations involving two fires, each of which “alone would have destroyed the lodge,” id. cmt. a, illus. 1, and involving three persons leaning on a car, “the combined force of any two of [whom] is sufficient [to propel the car],” id. cmt. f, illus. 3.

A third illustration, the one most pertinent to the case before us, requires proof that a drug “would have caused” the birth defect that could also have been caused by an unrelated genetic condition. Id. cmt. e, illus. 2. It is not enough that the drug could have caused the defect, as might be inferred from use of the term sufficient cause.

The Restatement (Second) is not as clear as the Restatement (Third) in excluding conduct that merely “could have” caused the injury, but the sole illustration to the point in Restatement (Second) § 432 is essentially the same as the concurrent-fires illustration in Restatement (Third) § 27.

In any event, the very notion of two (or more) causes (or causal sets), neither of which is a but-for cause, necessarily assumes that each of the causes would have caused the injury.

Say there are two such causes, A and B. The reason that A is not a but-for cause is that the injury would probably have occurred even if A had not been present. But that is merely another way of saying that even in the absence of A, B probably would have caused the injury; it would not be enough (to prevent A from being a but-for cause) that B may have caused the injury on its own but probably would not have.

To sum up, as we understand the Restatement (Second) and the Restatement (Third), a defendant cannot be liable to the plaintiff unless its conduct is either (a) a but-for cause of the plaintiff’s injury or (b) a necessary component of a causal set that (probably) would have caused the injury in the absence of other causes.

In particular, conduct was not a “substantial factor”, within the meaning of the term in the Restatement (Second), in bringing about a plaintiff’s injury unless it satisfied (a) or (b), and also was a sufficiently significant factor under the considerations set forth in Restatement (Second) § 433.

Thus, Plaintiffs’ substantial-factor argument misconceives the meaning of substantial factor in the Restatement (Second).

We therefore hold that Defendants would be liable only upon proof of one of the following: (1) that exposure of a Plaintiff to Uravan radiation was a but-for cause of the Plaintiff’s medical condition or (2) that such exposure to Uravan radiation was a necessary component of a causal set that would have caused the medical condition.

Professor Calls For Applying “Reversed Implied Preemption”

2009-11-13T13:23:00.003-06:00

The power of Congress to expressly preempt state-law tort claims also includes a symmetrical right to overtly signal retreat by repealing preemption provisions. Congress giveth the defense of express preemption; so Congress can also taketh that tort immunity away.

Shouldn’t the same symmetry of Congressional power to signal a legislative retreat also apply to the judge-made doctrine of implied preemption?

Yes, according to Implied Reverse Preemption, a new article by Professor Anita Bernstein in Brooklyn Law Review (2009).

The notion that Congress sometimes silently signals its intent to completely block certain state-law tort claims as being inconsistent with the goals of some federal legislation is, by now, deeply chiseled into our case law.

Judges sometimes infer that Congress silently intended to occupy an entire field of law; while in other cases judges occasionally conclude that Congress intended to bar state-law claims as being inconsistent with regulations imposed by federal administrators.

Because Congress is sometimes deemed as calling for preemption without expressly saying so, Professor Bernstein argues that judges should also acknowledge that Congress can also impliedly signal that it has changed its mind on implied preemption.

Pointing to the changing Congressional attitudes on federal regulation of consumer-product safety – where Congress started out strong in 1972 with the Consumer Product Safety Act; turned around and steadily marched backwards during the anti-regulatory era; and is now moving toward stronger regulation, with the Consumer Product Safety Improvement Act of 2008 – Bernstein argues that the judge-made doctrine of implied preemption “calls for a complementary judicial inference to recognize the abandonment of an earlier regulatory design.”

“Any court empowered to infer that Congress intended to occupy a field or impose a scheme, when Congress did not announce this path expressly, is also empowered to infer a Congressional retreat,” according to Bernstein.

Just as Congress can expressly repeal express preemption, Bernstein says, “Similar reasoning should govern implied preemption. Any congressional scheme to occupy a field or establish comprehensive regulation can be abandoned.”

This is an important point because, if Congress impliedly abandoned an implied intent to block certain state-law tort claims, then judges should now permit the previously barred lawsuits. Earlier decisions that invoked implied preemption can become “obsolete” in light of subsequently inferred Congressional intent.

“Just as courts find preemption where circumstances warrant, Bernstein explains, “they must also, again only where circumstances warrant, infer a retreat from implied preemption.” This retreat is what Bernstein calls implied reverse preemption.

Bernstein discusses “markers of congressional intent” which point to the conclusion that “Congress has pulled back from an inferred early agenda and no longer forecloses tort liability.” For example, Congress can impliedly retreat signal a retreat from implied preemption by dropping the level of appropriations for a regulatory program such as product safety, or by or enacting amendments “that contract or undermine the original regulatory endeavor.” And when an agency exercises delegated authority to regulate an industry, “Reduced rulemaking activity, budgetary passivity, and a subdued public presence all manifest retreat from a regulatory agenda.”

The history of product-safety regulation provides a good illustration of reverse implied preemptions, Bernstein says, because, “at some point during a period of seventeen years, Congress ceased to intend, if it ever did, to assert a federal safety-regulatory stance that precluded tort liability for injuries attributed to consumer products. This absence or withdrawal or preemption left consumer product safety open to the powers and prerogatives of state law, especially state tort liability.”

While Bernstein acknowledges that tort liability might obstruct a “national scheme of safety regulation,” she argues that, without the doctrine of implied reverse preemption, there can be an “unprincipled gift of immunity to the injuring sector.” To counteract this unjustified tort immunity, and “enhance public welfare” in cases where Congress or an administrative agency have impliedly retreated from a regulatory program, we need state-law tort remedies.

There is a “sweet spot between” between tort claims and administrative regulation as methods for promoting general social welfare. “Courts attuned to this balance,” Bernstein concludes, “will find implied reverse preemption just as fundamental as preemption.”

Professor Invokes Economic Analysis In Calling For Expansion Of Negligence Per Se

2009-11-06T17:21:00.007-06:00

The classic limitation on use of negligence per se is under attack, based on a law-and-economic analysis by a visiting professor at the University of Chicago.

With negligence per se, Don Defendant’s conduct qualifies as negligent if Paula Plaintiff suffers personal injury as a result of Don’s breach of a safety statute. But according to the classic formulation, the doctrine of negligence per se does not apply unless (a) Paula was a member of the class of persons that the statute was drafted to protect, and (b) she suffered the type of harm that the law was aimed at preventing.

This means that even when Paula’s injury was a reasonably foreseeable result of the breach – and even when she suffered a type of harm that was also reasonably foreseeable – the doctrine of negligence per se would not apply, because Paula was not a member of the protected class, and did not suffer the precise kind of harm the statute was aimed at preventing.

Criticizing the classic limitations on negligence per se as “misguided,” Professor Ariel Porat argues that the “the weight” that judges give to these requirements “should be drastically reduced.”

In an upcoming issue of the Wake Forest Law Review, Porat concludes “there is a strong prima facie case” for applying the doctrine of negligence per se whenever a statutory violation increases either “the risks to the class of persons to which the victim belongs,” or “the type of injury the victim suffered” – and “those risks were foreseeable.”

Porat’s article – Expanding Liability for Negligence Per Se – is available at tortssymposium.law.wfu.edu/papers/porat.pdf.

Judges should apply an expanded version of negligence per se, Porat continues, “even when the risks that materialized are usual or background risks that in themselves would not justify the enactment of the statute.”

As an illustration, Porat uses an example from the proposed final draft of Restatement (Third) of Torts. Example 1, in Comment g of § 14, involves: (1) a statute that requires special railings on stairways, to prevent people with disabilities from falling; and (2) an able-bodied person who is injured in a fall that would have been prevented if the owner had complied with the law.

The doctrine of negligence per se would not apply, according to Comment g, because judges would probably view the able-bodied plaintiff’s fall “as not the type of accident the statute is considering.”

Rejecting the traditional approach, Porat contends “there is a strong prima facie case for liability in this example, even if it is clear that, in the absence of a disabled person, there is no duty to install the railing.”

Although able-bodied people would benefit from the special railing, Porat reasons, the benefit to that group would probably not be great enough to prompt a statute requiring the special equipment. But the benefit to disabled persons might also not be great enough to make the statute “cost-justified.” So, Porat explains, combining the risk of harm to disabled persons, plus the additional risk of falls by able-bodied persons, might be needed to justify the cost of special railings.

“In other words,” Porat explains, “it is possible that both the cumulative weight of the background risks (to able-bodied persons) and the unusual risks (to disabled persons) combined persuaded the legislature to impose a duty to install railings. Liability for risks to both classes of victims is therefore justified.”

Plugging some numbers into the example to show why the classic limitations on negligence per se are misguided, Porat assumes that: (1) the average cost of installing the special railings is 80; (2) the risk of harm to able-bodied persons who use the stairs is 30; and (3) the risk of injury to disabled persons who use the stairs is 60.

Under a law-and-economics analysis, conduct is considered negligent if the cost of a precaution is less than the expected value of the potential harm (calculated as the probability of an accident occurring, multiplied by the likely costs of the harm that would be sustained if the accident occurs).

If there is a 10% chance of an accident that will cause $1 million in damages, for example, but the defendant can eliminate this risk by taking a precaution that costs One Dollar, general societal well-being is optimized by holding the defendant liable for negligence if he skips the precaution and causes the accident. As the economists say, holding the defendant liable for negligence in this scenario is “welfare enhancing.”

Applying this type of analysis, Porat reasons that the risk of harm to able-bodied persons would not justify the cost of the special railings, because the expected value of the potential harm (30) is less than the cost of installing the railings (80). And, significantly, the risk of harm to disabled persons does not justify the cost, because 60 is less than 80.

The only way that special railings are cost-justified in this scenario would be to consider both the risks to disabled and able-bodied persons, because the combined potential harms (30 plus 60) are greater than the costs of compliance (80).

To optimize general social well-being, Porat concludes that the doctrine of negligence per se should apply to able-bodied persons in this situation. And extending the analysis, Porat also shows how failing to apply the doctrine of negligence per se to able-bodied persons in this scenario will, at times, “result in under-protection” for the disabled.

Using the same hypothetical numbers, Porat notes that, if the doctrine of negligence per se was not applied to protect able-bodied persons in this example, “a self-interested rational wealth-maximizing employer might prefer not to spend 80 on railings and instead shoulder liability of 60 towards disabled plaintiffs.”

“This would clearly be socially inefficient and impair social welfare,” Porat concludes, because it would undermine the statutory goal of protecting the disabled.

Porat acknowledges that the results would be different with different cost assumptions:

“But we (or the courts) don’t really know what the numbers are, and there is always the possibility that they could indeed work out similarly to the first numerical assumptions for Example 1. Furthermore, there are definite advantages to a doctrine of negligence (and negligence per se) that can uniformly be applied to all cases, regardless of the numbers. That is precisely how the general doctrine of negligence works: the injurer bears liability for risks he or she could have reasonably prevented, even if lower liability would be sufficient to incentivize him or her to take adequate precautions.”

Porat therefore suggests interpreting all safety statutes “as referring prima facie to all potential classes of victims who are expected – as a positive [i.e., practical] matter – to benefit from the given statute and to all types of injury that are expected – again, as a positive [practical] matter – to be reduced or prevented if the statutory duty is upheld.”

Porat refers to this as a prima facie approach for applying negligence per se, because he is not advocating that courts abandon traditional limitations on tort liability – including what the Restatement (Third) calls “the scope of liability” (formerly known as “proximate cause”), and the doctrine that “an injurer’s liability is limited only to wrongful risks, i.e., those risks that made his behavior wrongful.”

Mindful of these potential complications, Porat argues that “a breach of statutory duty should amount to no more than a strong prima facie case for liability.”

Summing up, Porat explains (again using the term “positive” in the sense of “practical”) that:

“The most plausible interpretation of a safety statute is that all victims of its breach who are expected – as a positive matter – to benefit from its protection are entitled to recovery and all foreseeable injuries that are expected – again, as a positive matter – to result from the breach are compensable. A breach of a safety statute should therefore give rise to a strong prima facie case for recognizing liability.”