1. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 1 Torts and Cyber Torts Chapter 4 BUSINESS LAW TODAY Essentials 9 th Ed. Roger LeRoy Miller - Institute for University Studies, Arlington, Texas Gaylord A. Jentz - University of Texas at Austin, Emeritus

2. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2 Learning Objectives  What is a tort?  What is the purpose of tort law? What are the two basic categories of torts?  What are the four elements of negligence?  What is meant by strict liability? In what circumstances is strict liability applied?  What is a cyber tort, and how are tort theories being applied in cyberspace?

3. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3 The Basis of Tort Law  A tort is a private, civil legal action to obtain monetary damages from a legal injury a person or property.  Damages: Compensatory Damages: actual losses. Puts plaintiff in position he would have been in if the tort had not occurred. Special Damages: quantifiable such as lost wages, medical bills. General Damages: nonmonetary losses such as pain and suffering. Compensatory Damages: actual losses. Puts plaintiff in position he would have been in if the tort had not occurred. Special Damages: quantifiable such as lost wages, medical bills. General Damages: nonmonetary losses such as pain and suffering. Punitive Damages: punish wrongdoer, typically only available in intentional torts. Punitive Damages: punish wrongdoer, typically only available in intentional torts.

4. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 4 The Basis of Tort Law  Plaintiff (injured party) sues the Defendant (tortfeasor).  Classification of Torts: Intentional. Intentional. Unintentional (negligence-no fault). Unintentional (negligence-no fault). Strict Liability (absolute liability). Strict Liability (absolute liability).

5. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 5  Assault: the reasonable apprehension or fear of immediate contact.  Battery: completion (contact) of the assault.  No motive is necessary, and plaintiff can be compensated for emotional harm.  Defenses: Consent. Consent. Self-Defense and Others. Self-Defense and Others. Defense of Property. Defense of Property. Intentional Torts: Assault and Battery

6. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6  False Imprisonment. Confinement or restraint of another person’s activities without justification. Confinement or restraint of another person’s activities without justification. Merchants can detain a suspected shoplifter as long as there is probable cause. Merchants can detain a suspected shoplifter as long as there is probable cause.  Infliction of Emotional Distress. Extreme and outrageous conduct. Extreme and outrageous conduct. Some courts require physical symptoms. Some courts require physical symptoms. Intentional Torts Against Persons

7. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 7  Defamation: Publication of a false statement (oral or written) that injures a person’s good reputation. Fact or Opinion?? Opinions are free speech and generally not actionable. Fact or Opinion?? Opinions are free speech and generally not actionable. Slander is oral, Libel is written. Statements made on the internet may be libel. Slander is oral, Libel is written. Statements made on the internet may be libel. Publication Requirement: third party must hear or see statement. An individual who re-publishes the statement may be liable. Publication Requirement: third party must hear or see statement. An individual who re-publishes the statement may be liable. Defamation

8. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 8  Libel: damages are presumed as a matter of law. Plaintiff need not prove she was actually injured. Reason: libel is “permanent” and continues to harm after statement made.  Slander : plaintiff must prove special damages (statement actually caused monetary loss). Reason: slander is temporary. Exception: Slander per se  Exception: Slander per se  Defamation - Damages

9. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 9  Defamation. Slander per se (no proof of damages is required): Slander per se (no proof of damages is required): Loathsome communicable disease.Loathsome communicable disease. Professional impropriety.Professional impropriety. Imprisonment for a serious crime.Imprisonment for a serious crime. Unmarried woman is unchaste.Unmarried woman is unchaste. Defamation

10. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 10  Defamation Defenses. Truth is normally an absolute defense. Truth is normally an absolute defense. Statement was Privileged: Statement was Privileged: Absolute: judicial and legislative proceedings.Absolute: judicial and legislative proceedings. Qualified: good faith, limited.Qualified: good faith, limited. Public Figures: plaintiff must show statement made with “actual malice.” Public Figures: plaintiff must show statement made with “actual malice.” Defamation

11. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 11  Invasion of the Right to Privacy. Person has the right to solitude. Breach of that duty is a tort. Person has the right to solitude. Breach of that duty is a tort. Appropriation of identity (discussed  ). Appropriation of identity (discussed  ). Intrusion into private affairs or seclusion. Intrusion into private affairs or seclusion. False Light. False Light. Public disclosure of private facts. Public disclosure of private facts. What about the rights of internet users? What about the rights of internet users? Invasion of Privacy

12. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 12 Appropriation  Use of another person’s name, likeness or other identifying characteristic, without permission, with benefit to user.  Degree of Likeness is distinguished by different courts.  Right of Publicity as a property right: focuses on commercial exploitation of likeness

13. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 13  Fraudulent (Intentional) Misrepresentation. Intentional deception of another that causes belief in a condition that is different from the condition that already exists. Intentional deception of another that causes belief in a condition that is different from the condition that already exists. Knowing misrepresentation of fact.Knowing misrepresentation of fact. Intent to induce innocent party to rely.Intent to induce innocent party to rely. Justifiable reliance by innocent party.Justifiable reliance by innocent party. Causation and Damages.Causation and Damages. Contrast: “puffery” or statements of opinion. Contrast: “puffery” or statements of opinion. Fraudulent Misrepresentation

14. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14  Key difference between intentional and negligent misrepresentation is whether person making the false statement actually knew it was false.  Typically occurs when person owes a duty to another to give correct information.  CASE 4.1 McClain v. Octagon Plaza, LLC (2008). Defendants negligently represented size of leased property and plaintiff justifiably relied, resulting in $90,000 in damages. Negligent Misrepresentation

15. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 15 Abusive or Frivolous Litigation  Plaintiff files suit based on malice or without a legitimate legal reason and loses the suit, he can be sued for malicious prosecution, recover costs of suit and, in some states, lost profits.  Abuse of process: does not require proof of malice or prior litigation.

16. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 16  Wrongful Interference with Contracts. Valid, enforceable contract exists between two parties. Valid, enforceable contract exists between two parties. Third party knows about contract. Third party knows about contract. Third party intentionally causes either party to breach the original contract. Third party intentionally causes either party to breach the original contract. Wrongful Interference

17. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17  Wrongful Interference with Business Relationship. Distinguish competition vs. predatory behavior. Predatory behavior is unlawfully driving competitors out of market. Distinguish competition vs. predatory behavior. Predatory behavior is unlawfully driving competitors out of market. To prevail, Plaintiff must show Defendant targeted only Plaintiff’s customers and product. To prevail, Plaintiff must show Defendant targeted only Plaintiff’s customers and product.  Defenses to Wrongful Interference: Interference was justified or permissible (bona fide competitive behavior). Wrongful Interference

18. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 18 Intentional Torts Against Property  Trespass to Land. Occurs when a person, without permission, enters onto (above or below) some one else’s land; or remains on the land or permits anything to remain on the land. Occurs when a person, without permission, enters onto (above or below) some one else’s land; or remains on the land or permits anything to remain on the land. Actual damages or harm to the property is not required to prove trespass. Actual damages or harm to the property is not required to prove trespass.

19. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 19  Trespass to Personal Property. Wrongfully taking or harm or interference with exclusive right of use of personal property (chattel) of another. Wrongfully taking or harm or interference with exclusive right of use of personal property (chattel) of another. Intentional Torts Against Property

20. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 20  Wrongfully taking or retaining possession of chattel and placing in service of another. Good intentions are not a defense. Good intentions are not a defense.  Usually occurs with trespass to personal property.  CASE 4.2 Trustees of University of District of Columbia v. Vossoughi (2009). Replacement cost is appropriate measure of damages for conversion of personal property. FMV may be inadequate in some cases. Conversion

21. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 21  Occurs when economically injurious falsehoods are made about another’s property or product.  Slander of Quality (Trade Libel): false statement about another’s product that caused a third party to refrain from dealing with plaintiff, causing financial loss.  Slander of Title: false statement about legal ownership of another’s product resulting in financial loss. Disparagement of Property

22. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 22 Unintentional Torts (Negligence)  Occurs when plaintiff is legally injured due to defendant’s failure to live up to a required duty of care causing foreseeable risk of injury.  Analysis: Did the Defendant owe the Plaintiff a legal duty of care? Did the Defendant owe the Plaintiff a legal duty of care? Did the Defendant breach that duty? Did the Defendant breach that duty? Did the Plaintiff suffer a legal injury? Did the Plaintiff suffer a legal injury? Did the Defendant’s breach of duty cause the Plaintiff’s injury? Did the Defendant’s breach of duty cause the Plaintiff’s injury?

23. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 23 Negligence: Duty of Care and Breach  Duty is based on reasonable person standard. How would a reasonable person have acted under the circumstances? How would a reasonable person have acted under the circumstances? Duty to Warn Business Invitees of risks, and keep common areas safe. Exception: Obvious risks. Duty to Warn Business Invitees of risks, and keep common areas safe. Exception: Obvious risks. Duty of Professionals to clients (attorneys, CPA’s, doctors). Duty of Professionals to clients (attorneys, CPA’s, doctors).

24. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 24  Plaintiff must suffer a legally recognizable injury. Plaintiff must show she suffered loss or harm to legally protected interest. Plaintiff must show she suffered loss or harm to legally protected interest. Not all injuries can be compensated. Not all injuries can be compensated. Compensatory damages are norm. Punitive damages are generally awarded only in intentional torts. Compensatory damages are norm. Punitive damages are generally awarded only in intentional torts. Negligence: Injury Requirement and Damages

25. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 25  To hold defendant liable, plaintiff must the tortious act was both the actual and proximate cause of the injury. Causation in Fact: “but for” defendant’s act, injury would not have occurred. Causation in Fact: “but for” defendant’s act, injury would not have occurred. Proximate Cause: defendant’s act created a foreseeable risk of injury to plaintiff (sufficient strong connection). Proximate Cause: defendant’s act created a foreseeable risk of injury to plaintiff (sufficient strong connection). Negligence: Causation

26. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 26 Defenses to Negligence  Assumption of the Risk. Not applied in emergency situations. Not applied in emergency situations.  Superseding Cause. Event must be unforeseeable. Event must be unforeseeable.  Contributory Negligence (few jurisdictions).  Comparative Negligence (more common). As long as Plaintiff is less than 50% at fault he can recover a pro-rata share of the verdict. As long as Plaintiff is less than 50% at fault he can recover a pro-rata share of the verdict.

27. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 27 Special Negligence Doctrines  Res Ipsa Loquitur.  Negligence Per Se. Violation of law is legal breach of duty. Plaintiff must show: Defendant broke a law/statute. Defendant broke a law/statute. Plaintiff is in special class to be protected; Plaintiff is in special class to be protected; Statute designed to prevent injury to Plaintiff. Statute designed to prevent injury to Plaintiff.  “Danger Invites Rescue” doctrine.  Dram Shop Acts.

28. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 28 Strict Liability  Does not require fault, intent or breach of duty.  Usually involves ‘abnormally dangerous’ activities and risk cannot be prevented.  Dangerous Animals.  Product Liability—manufacturers and sellers of harmful or defective products.

29. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 29 Cyber Torts – Online Defamation  Identifying the Author of Online Defamation. Threshold barrier to suing an internet service provide (ISP). Suits are now brought by “John Does” until discovery is completed. Threshold barrier to suing an internet service provide (ISP). Suits are now brought by “John Does” until discovery is completed.  Liability of ISPs. Communications Decency Act provides broad protection for ISPs, but there are limits to immunity: Communications Decency Act provides broad protection for ISPs, but there are limits to immunity:  CASE 4.3 Fair Housing Council of San Fernando Valley v. Roommate.com, LLC (2008). CDA does not provide immunity under FHA for questions that could be used to discriminate against housing residents.