Adv Torts Hopkins

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Advanced Torts
I. Introduction
a. Tort is a civil wrong, other than a breach of contract, for which the law provides a
remedy
i. Tortfeasor: one who commits a tort, a wrongdoer
b. Major purposes of tort law
ii. Provide a peaceful means for adjusting the rights of parties who might
otherwise take the law into their own hands
iii. Deter wrongful conduct
iv. Encourage socially responsible behavior
v. Restore injured parties to their original condition by compensating them
for their injury
vi. Promote broad distribution of losses by encouraging the buying of
insurance
c. Two English common law writs are the genesis of tort law: writ of trespass and
writ of trespass on the case
i. Modern tort and contract law developed from trespass on the case
ii. Writ of trespass involved injuries caused by direct action
1. Originally the only writ, if you cant get it under here you are
screwed
2. Transferred intent doctrine of intentional torts is the last vestige of
the original writ of trespass
iii. Trespass on the case involved injuries sustained, but not by forcible or
direct action
1. Indirect action
2. Example of indirect action: defamation, misrepresentation,
invasion of privacy
iv. Today we use forms/causes of actions instead of writs
b. Types of Torts
i. Actions for nuisance
ii. Conversion
iii. Deceit
iv. Defamation
v. Malicious prosecution
vi. Interference with economic relations
vii. Negligence
viii.
Etc.
c. Fault
i. Fault based liability: we hold someone responsible when they are at fault
ii. Three bases of fault
1. Intentional
2. Negligence: failure to take the level of care required by society to
protect others from harm
3. Strict Liability
a. Animals
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b. Abnormally dangerous activities

c. Product liability
II. Strict Liability: Animals, Abnormally Dangerous Activities and Limitations
a. Strict liability requires the defendant to pay damages although the defendant
neither intentionally acted nor failed to live up to the objective standard of
reasonable care that traditionally has been at the root of negligence law
b. Absolute liability: liability without fault, holding someone liable when someone
isnt at fault
i. Policy driven concept
ii. Not truly absolute, are exceptions
c. Strict liability and animals
i. Owner of domesticated animals who are likely to roam are strictly liable
for any damage
1. Cattle, etc.
2. Cats and dogs dont count, seen as family
3. When animals are enroute to somewhere, owner is exempted from
strict liability if it flees and causes damage
ii. Domesticated vs. Wild Animals
1. Owner for injuries caused by non-trespassing animal could be held
liable, but not strictly liable
a. Exception: can be held strictly liable if the owner knows
animal has dangerous propensities
2. Domesticated animals: dogs, cats, pigs, cows, horses, etc.
3. Owner of wild animal could be strictly liable if non-trespassing
4. Wild animals: bears, foxes, lions, etc.
iii. Dog bites
1. Old rule: first bite is free, cant know dangerous propensities
unless be acted at least once
2. Dog bite statutes: designed to eliminate burden for defendant of
having to prove dangerous propensities
3. Statutes now see if defendant was acting peacefully/nonthreatening when on premises
b. Person who brings on his lands and collects and keeps there anything likely to
cause damage if it escapes, must keep it in at his peril and if not he is answerable
for all damages which is the natural consequence of its escape. (Rylands v.
Fletcher, 692)
i. Broad rule, could potentially flood court system
ii. Plaintiff though free from all blame on his part, must bear the loss, unless
he can establish that it was the consequences of some default for which the
defendants are responsible
1. Defendants are liable if they put their land to a non-natural use for
the purposes of introducing onto it that which in its natural
condition was not in or upon it
2. Example: a large quantity of water
iii. Defendant can excuse himself by showing that the escape was owing to
the plaintiffs default or act of God
1. Just because we cant hold the defendant liable for strict liability,
doesnt mean they cant be held liable for another tort
iv. Most US states originally rejected this ruling
2. 1st restatement used words like ultrahazardous activities (limiting
term)
3. Later abnormally dangerous activities was used (2nd restatement)
b. The use of guns, even though dangerous, isnt the type of activity that must be
deemed ultrahazardous. (Miller v. Civil Constructors, 699)
i. Restatement 519: One who carries on an abnormally dangerous activity is
subject to liability for harm to the person, land or chattels of another
resulting from the activity, although he has exercised the utmost care to
prevent the harm
ii. Restatement 520: In determining whether an activity is abnormally
dangerous, the following factors are to be considered:
1. Existence of a high degree of risk of some harm
2. Likelihood that the harm that results will be great
3. Inability to eliminate the risk by the exercise of reasonable care
4. Activity is not a matter of common usage
5. Inappropriateness of activity of the place it is done/locality
6. Value to community is outweighed by danger
iii. Need to meet more then one factor to find if activity is abnormally
dangerous
iv. Why are guns ok?
1. Shooting range is usually a controlled environment and use of
utmost care will eliminate risk
2. Guns are a matter of common usage, 2nd Amendment
3. No reason why a gravel pit is inappropriate place to have a
shooting range
4. Target practice has social utility, especially for police officers
b. Negligence standard would adequately handle the problem of spillage of
flammable materials during transportation. (Indiana Harbor v. American
Cyanamid, 702)
i. Transportation of a dangerous chemical = activity
ii. Storage and transport of toxic chemicals and flammable liquids often, but
not always, gives rise to strict liability
iii. Main purpose of tort law is to produce economic efficiency
1. Strict liability will over-deter and should therefore be imposed only
where a negligence scheme will not be sufficient to produce the
right amount of activity
2. If accident can be eliminated by the use of due concern, then there
is no reason to impose strict liability
c. The largest class of cases in which strict liability for abnormally dangerous
activities is applied involves the use of dynamite and other explosives for
demolition in residential or urban areas. Other activities that have been held to be
abnormally dangerous:
i. Transportation and storage of toxic chemicals and inflammable liquids
ii. Pile driving

iii. Crop dusting
iv. Fumigation with toxic gases
v. Testing of rockets
vi. Fireworks displays
vii. Operation of hazardous waste disposal sites
viii.
Operation of oil wells
ix. Storage of large quantities of water and other liquids
d. Strict liability is founded upon a policy of the law that imposes upon anyone who
for his own purpose creates an abnormal risk of harm to his neighbors, the
responsibility of relieving against that harm when it does in fact occur
i. Liability is applicable to an activity carried on with all reasonable care
ii. Of course, one who carries on an abnormally dangerous activity may also
be negligent in the way in which he conducts it and therefore subject to
liability on both cases
e. There has to be a nexus between the injury and the type of conduct that we apply
strict liability to. (Foster v. Preston Mill, 710)
i. Example of limitations on strict liability
1. Defendant will not be liable for his abnormally dangerous
activities if the harm would not have occurred except for the fact
that the plaintiff conducts an abnormally sensitive activity
ii. Strict liability should be confined to consequences which lie within the
extra ordinary risk whose existence calls for such responsibility
1. Has to be some proximity between the activity and damage
2. EX: It was the nervous disposition of the mink that caused the
death of the kittens and not the ordinary noise created by defendant
iii. Law doesnt impose the rule of strict liability to protect against harms
incidental to plaintiffs extraordinary and unusual use of land
1. Blanket liability would be against public policy and hurt business
b. Defendant isnt responsible for things that escape from his land due to an act of
God. (Golden v. Amary, 712)
i. Act of God can relieve someone of liability
ii. Event must be beyond the capacity of anyone to anticipate and was clearly
an act of God
iii. If you exercise the utmost level of care you can and an act of God happens
anyway causing damage, you wont be held liable
c. No liability if injury is attributable, not to the keeping of the animal, but to the
injured partys unnecessarily and voluntarily putting himself in a way to be hurt
knowing the probable consequence of his act, so that he may be deemed to have
brought the injury upon himself. (Sandy v. Bushey, 714)
i. By common law keepers of dangerous animals can be held answerable for
injuries unless plaintiff showed a want of due care
ii. Plaintiffs contributory negligence can be a defense to strict liability
1. Generally not a defense unless the type of contributory negligence
rises to the level of voluntary assumption of the risk
II. Strict Liability: Defective Products and Products Liability
a. Products liability is the umbrella term for the liability of a manufacturer, seller, or
other supplier of chattels, to one with whom he is not in privity of contract, who
suffers physical harm caused by the chattel
b. Theories of recovery for injuries resulting from products:
i. Negligence (McPherson)
ii. Warranties
1. Evolved from writ of trespass on the case
2. Contract law embraced this idea
3. Can be expressed (Baxter) or implied (Henningsen)
4. Still viable cause of action in torts
a. Problem is they can protect manufacturer from liability
5. Warranties designed to protect consumer
a. Consumers disadvantaged when dealing with businesses
b. Warranties provide additional protection
iii. Strict Liability (Greenman)
1. Most important theory under product liability
2. Not absolute, too much of a burden to require manufacturer to
insure every item he makes
3. Plaintiff needs to prove manufacturer did certain things
b. If object is reasonably certain to be dangerous when negligently made and if
there is knowledge that the thing will be used by persons other then the purchaser
and used without new test, the manufacturer of this object is under a duty to make
it carefully. (MacPherson v. Buick, 719)
i. Once the plaintiff shows that the product will be unreasonably dangerous
if defective, he may sue in negligence without privity.
1. No debate that plaintiff can sue retailer for breach of contract
2. Whether plaintiff can sue manufacturer is the issue because there is
no privity of contract
3. Privity requirement is unnecessary, plaintiff can bring a negligence
claim on the manufacturer
ii. Must be a knowledge of a danger, not merely possible but probable
iii. If manufacturer is negligent, where danger is to be foreseen, liability will
follow
iv. Duty to safeguard life and limb, when the consequences of negligence
may be foreseen, grows out of contract
v. Car is not an inherently dangerous vehicle unless negligently constructed
1. Not necessary to show that car are inherently dangerous
vi. Manufacturer is responsible for the finished product
vii. More probable the danger the greater the need for caution
b. A seller may expressly represent that her goods have certain qualities. If the
goods turn out not to have these qualities, the purchaser (or possibly other
affected persons) may sue for this breach of warranty. (Baxter v. Ford, 722)
i. Example of the express warranty theory of recovery for products liability
1. Note: always read the contract, take the time to read it
ii. Right to rely on sellers representations if falsity is not readily
apparent
1. Ex: shatter-proof glass is not readily detectable by a consumer

b. When a manufacturer puts a new car in the stream of trade and promotes its
purchase to the public, an implied warranty that it is reasonably suitable for use
accompanies it into the hands of the ultimate purchaser. (Henningsen v.
Bloomfield Motors, 726)
ii. Example of the implied warranty theory of recovery for products liability
iii. If buyer, expressly or by implication, tells seller what article will be used
for and buyer relied on sellers skill/judgment, an implied warranty arises
iv. Strict liability is imposed on maker or seller and recovery of damages does
not depend on negligence or knowledge of defect
v. To protect societys interest in safety, the requirement of privity between
maker and dealers and consumer must be eliminated
1. Defective car, with its greater potentiality for harm, demands less
adherence to privity
2. Modern marketing targets ultimate consumer, not dealer, so
responsibility should be toward consumer
3. Person who in the reasonable contemplation of the parties to the
warranty, might be expected to become a user of the car has no
barrier to recovery
4. Those who can best fix the defect have the burden of losses
vi. Burden on judiciary to protect ordinary man against the loss of important
rights though what, in effect, is the unilateral act of the manufacturer
vii. Creating contracts with no warranty goes against public good
1. Disclaimer are adhesion contracts that result from gross inequality
between manufacturer and consumer
b. A manufacturer is strictly liable in tort when an article he places on the market,
knowing that it is to be used without inspection for defects, proves to have a
defect that causes injury to a human being. (Greenman v. Yuba, 732)
i. Liability is not assumed by agreement but imposed by law and the refusal
to permit the manufacturer to define the scope of its own responsibility for
defective products, makes it clear that the liability is governed by law of
strict liability in tort
ii. Purpose of such liability is to insure that the costs of injuries resulting
from defective products are borne by the manufacturers that put such
products on the market rather than by the injured persons
iii. To establish manufacturers liability its sufficient that plaintiff proved that
he was injured while using the product in a way it was intended to be used
as a result of a defect in design and manufacture of which plaintiff was not
aware that made the product unsafe for its intended use
c. Rd 402A: Liability of Seller of Product for Physical Harm to User/Consumer
i. (1) One who sells any product in a defective condition unreasonably
dangerous to the user or consumer or to his property is subject to liability
for physical harm thereby caused to the ultimate user or consumer, or to
his property, if
1. (a) The seller is engaged in the business of selling such a product
b.
c.
d.
e.
f.
2. (b) It is expected to and does reach the user or consumer without

substantial change in the condition in which it is sold
ii. (2) The rule stated in subsection (1) applies although
1. (a) The seller has exercised all possible care in the preparation and
sale of his product, and
2. (b) The user or consumer has not bought the product from or
entered into any contractual relation with the seller
iii. Notes
1. Instrumental in setting the stage for products liability
2. Extends liability to seller and manufacturer
A number of rationales in support of strict liability in tort:
i. Provides incentive to manufacturers to make products as safe as possible
ii. Costs of accidents placed on party best able to determine whether there are
means to prevent that accident
Restatement 1(a), Liability of Commercial Seller or Distributor for Harm Cause
by Defective Products: One engaged in the business of selling or otherwise
distributing products who sells or distributes a defective product is subject to
liability for harm to persons or property caused by the defect
Three types of defects
iii. Manufacturing defect
1. Easy to prove, just compare good product to bad product
2. Ex: missing a part or a piece was not put on properly
iii. Design defect: example the Ford Pinto, hardest to prove
iv. Warning/informational defect: strict liability requires that a
manufacturer provide an adequate warning when a product poses an
unreasonable danger of harm to the user or consumer
Prima facie case for defective Products Liability (Rix v. General Motors, 740)
i. Defendant was the seller (manufacturer or distributor) of a product that
injures the plaintiff
ii. Product was defective
iii. Defect was present in the product at the time of sale and was not
introduced by a distributor, or installer or repairer
iv. Defective product was the cause (factual and legal) of the plaintiffs
injuries
v. Plaintiff was injured
Restatement 2, Categories of Product Defect: A product is defective when, at the
time of sale or distribution, it contains a manufacturing defect, is defective in
design, or is defective because of inadequate instructions or warnings. A product:
i. (a) Contains a manufacturing defect when the product departs from its
intended design even though all possible care was exercised in the
preparation and marketing of the product
ii. (b) Is defective in design when the foreseeable risks of harm posed by the
product could have been reduced or avoided by the adoption of a
reasonable alternative design by the seller or other distributor, or a
predecessor in the commercial chain of distribution, and the omission of
the alternative design renders the product not reasonably safe
g.
h.
i.
j.
b.
iii. (c) Is defective because of inadequate instructions or warnings when the

foreseeable risks of harm posed by the product could have been reduced or
avoided by the provision of reasonable instructions or warnings by the
seller or other distributor, or a predecessor in the commercial chain of
distribution, and the omission of the instructions or warnings renders the
product not reasonably safe
Policies for strict liability on product defects
i. Give manufacturers incentive to make safe product
ii. Spreading the costs
iii. Easing evidentiary burden
Manufacturing defects are imperfections in a product because something went
wrong with the manufacturing process. (Rix v. General Motors, 740)
i. A defectively manufactured product does not conform in some significant
aspect to the intended design or the great majority of products
manufactured in accordance with the design
ii. May result from mishap in manufacturing process, improper
workmanship, or because defective materials were used in construction
Two tests for design defects:
i. Risk utility (used more)
ii. Consumer expectation: failure of the product to perform safely may be
viewed as a violation of reasonable expectation of the consumer
A manufacturer of a product made under a plan or design which makes it
dangerous for uses for which it is manufactured is subject to liability to others
whom he should expect to use the product or to be endangered by its probable use
from physical harm caused by his failure to exercise reasonable care in the
adoption of a safe plan or design. (Prentis v. Yale Mfg., 743)
i. Plaintiff has burden to prove product is defective
ii. Risk-utility analysis: whether a product suffers from a design defect is to
be determined by a pure negligence standard, in which the products
utility is to be weighed against the risks it presents
1. Risk-utility analysis always involves assessment of the decisions
made by manufacturers with respect to the design of their products
2. Risk utility balancing test invites the trier of fact to consider the
alternatives and risks faced by the manufacturer and to determine
whether in light of these the manufacturer exercised reasonable
care in making the design choice if made
iii. Pure negligence, risk utility tests in products liability actions against
manufacturers of products, where liability is predicated upon defective
design
1. Concept of negligence and strict liability are not exactly at odds
Manufacturer has a duty to use reasonable care in designing his product and
guarding it against foreseeable and unreasonable risk of injury and this may
include reasonably anticipated misuse. (Prentis v. Yale Mfg., 743)
i. Liability of the manufacturer rests upon a departure from proper standards
of care, so that the tort is essentially a matter of negligence
c.
d.
e.
f.
ii. Design defects result from deliberate and documentable decisions and
plaintiffs should be able to learn facts surrounding decisions through
liberal discovery
iii. Purpose of products liability law it to encourage the design of safe
products and a negligence standard will reward a manufacturer who does
this but punish one who does not
iv. Plaintiff threatens an entire product line for design fault, so should be
required to pass a higher threshold of a fault test
v. Fault system is fairer to safety-oriented manufacturer who will not bear
the burden of paying for losses cause by the negligent product seller
While manufacturing flaws can be evaluated against the intended design of the
product, no such objective standard exists in the design defect context
i. As the state developed their tests for design defect, many of them
appeared to be requiring negligence or at least some showing of fault,
despite their explicit adoption of strict liability
ii. Many jurisdictions instruct the jury on all available causes of action,
negligence, breach of warranty, and strict liability
Even if the current design cannot be improved on, the design of the product is
such that its risks outweigh its utility. (OBrien v. Muskin Corp., 750)
i. Some factors relevant in risk utility analysis
1. Usefulness and desirability of the product
2. Safely aspects of product
3. Availability of a substitute product
4. Manufacturers ability to eliminate unsafe character of the product
without impairing usefulness or making it too expensive
5. Users ability to avoid danger by the exercise of care
6. Users anticipated awareness of the dangers inherit in the product
and their avoidability, because of general public knowledge of the
obvious condition of the product, or of the existence of suitable
warnings or instructions
7. Feasibility on the part of the manufacturer, of spreading the loss by
setting the price of the product or carrying liability insurance
A key issue in design liability cases is whether a defendant can avoid liability by
showing compliance with the state of the art at the time the product was made.
ii. Requirement that the best scientific and medical technology that is
practically and economically feasible at the time the product was made or
marketed be utilized by the manufacturer
iii. The product is evaluated in light of knowledge and technology that were
available when it was made rather than at the time of trial
If the defendant can show that it neither knew nor, in the exercise of reasonable
care, should have known of a particular danger at the time of sale, the vast
majority of courts hold that there was no duty to warn of the unknowable danger.
(Anderson v. Owens-Corning Fiberglass, 757)
i. Example of information/warning defect
ii. When is a warning adequate?
1. Gets users attention
b.
c.
d.
e.
f.
2. Explain to user what the hazard is

3. Should tell user how to avoid the risk
iii. When regards to manufacturers knowledge, unfair to require warning if
they are not aware of hazard, unless they have actual or constructive
knowledge of hazards
1. Knowledge (actual, constructive)
State of the art evidence should be admitted when regarding whether the
defendant manufacturer had knowledge of hazard. (Anderson v. Owens-Corning
Fiberglass, 757)
i. State of art evidence: danger was not known to the scientific community at
the time of manufacture
1. Should be appropriate as defense (can be used by plaintiff too)
2. Product complied with highest level of tech at the time
In warning cases, most courts still apply a fault-based standard by requiring the
plaintiff to show that the manufacturer knew or should have known of risks that
injured the plaintiff
ii. Most jurisdictions have found no duty to warn of obvious dangers or of
risks that are generally known
iii. The determination whether the warning was adequate is usually left to the
jury who in turn rely on expert testimony
In cases involving pharmaceuticals, most courts hold that warnings and
instructions should be provided to the physician, who is a learned intermediary
between the drug company and the patient and the best person to understand the
patients needs and assess the risks and benefits of a particular course of treatment
i. It is assumed that the physician will decide which warnings to pass on to
the patient, taking into consideration the patients well-being
ii. Many jurisdictions do not apply the learned intermediary rule in situations
where the manufacturer is aware that there will be no medical provider to
provide learned advice or where the patient is expected to take an active
role in the selection of the product
Plaintiff bears the burden of proof in a products liability action
i. Plaintiff must prove the prima facie elements for a defective product
ii. Policy consideration supporting the imposition of strict liability is easing
the burden of proof for a plaintiff injured by a defective product
A defect may be proven by circumstantial evidence where a preponderance of that
evidence establishes that the accident was caused by a defect and not other
possibilities although not all other possibilities need be eliminated. (Friedman v.
GM, 765)
i. Plaintiff has burden to show that the product, and its defective aspects,
were the proximate cause of her injuries
ii. Circumstantial evidence is the most useful because sometimes the product
is not available
1. Ex: the car blew up
iii. Direct evidence can be used also
1. Ex: the product itself, the remnants of the product, doctors bills,
witness testimony, etc.
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iv. Demonstrative evidence: show the defect in action

v. Expert testimony: problem can be so complex, like alternative designs,
may need expert to explain what is wrong
vi. Preponderance of evidence (51%)
b. Defenses to Products Liability
i. Alternation of the product after it left manufacturers hands
ii. Comparative fault (45 jurisdictions)
1. 5 jurisdictions still use contributory negligence
iii. Assumption of risk: plaintiff is aware of harm, plaintiff can appreciate risk
of harm, plaintiff voluntary places himself at risk
iv. Misuse: seller/manufacturer is still held responsible for foreseeable
misuse, but not for unforeseeable misuse
c. Comparative negligence should be used when plaintiff knowingly pursues an
activity that would be high-risk even in the absence of a defect, and the activity
combines with a defect to create an accident, or to make an accident worse.
(Daly v. GM, 769)
i. Majority of states adopted this
ii. Comparative fault reduces total amount defendant pays
1. If defendant is only 99% responsible, only pays 99% of damages
iii. Comparative negligence principles will not reduce a manufacturers
incentive to produce safe products; since there is no way a manufacturer
can predict, in a particular case, that a potential plaintiff will be
contributorily negligent.
d. Manufacturer is not liable for injuries resulting from abnormal or unintended use
of his product, if such use was not reasonably foreseeable, but if misuse is
foreseeable design could still be defective. (Ford v. Matthews, 774)
i. Rd 402A: A product is not in a defective condition when it is safe for
normal handling and consumption. If the injury results from abnormal
handlingthe seller is not liable
ii. In strict liability case the defendant has the duty to foresee certain
unintended uses and foreseeability should be left to jury
iii. Jury determination to decide misuse unless there is precedent
II. Misrepresentation
a. Caveat emptor: let the buyer beware
b. Misrepresentation: false statement of fact (or concealment of fact) made
knowingly without belief in its truth (or recklessly)
i. Policy is to protect freedom from reliance on false info in business or
personal dealings
ii. Not all false statements are actionable
iii. Cause of action supposed to protect your pecuniary interest
c. Elements of Misrepresentation
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i. False Representation/Concealment of a material fact

ii. Person or 3rd person
iii. Induce to act or refrain from acting
iv. Plaintiff/3rd person relies
v. Pecuniary detriment/money damages
d. If defendant is found liable for non-disclosure then every seller is liable who fails
to disclose any nonapparent defect known to him in the subject of the sale which
materially reduces its value and which the buyer fails to discover. (Swinton v.
Whitinsville Savings Bank, 1024)
i. Rule of non-liability for bare nondisclosures, plaintiff never prevented
from finding the truth (old common law rule)
ii. Fiduciary supposed to act in your best interest
1. Seller of a house is not this
2. Buyer and seller in an equal bargaining position
iii. Exception
1. Certain types of contracts, such as those of suretyship and
guaranty, joint adventure, or insurance, were recognized as in
themselves creating or involving something of a confidential
relation, and hence as requiring the utmost good faith, and full and
fair disclosure of all materials facts
2. Utterance of half truth
iv. Termite cases frequently involve duty to disclose
1. Originally law did not provide special treatment for termites, today
it is a big topic in courts
2. IL requires signed form of seller of any termite infestation
a. Could be a basis of a misrepresentation claim if filled out
incorrectly
3. Today justice, fairness, and equity require disclosure of termites
a. If you arent aware, no big deal, but if you know anything
you have to say it
b. One who makes a fraudulent misrepresentation or concealment is subject to
liability for pecuniary loss to the persons or class of persons whom he intends or
has reason to expect to act or to refrain from action in reliance upon the
misrepresentation or concealment. (Griffith v. Byers Construction, 1026)
i. There are basic facts required to be disclosed
1. Ex: Soil of land isnt good enough to grow trees or other plants
ii. Restatement 551
1. One who fails to disclose to another a thing that he knows may
justifiably induce the other to act or refrain from acting in a
business transaction is subject to the same liability to the other as
though he had represented the nonexistence of the matter that he
has failed to disclose, if, but only if, he is under a duty to the other
to exercise reasonable care to disclose the matter in question.
2. One party to a business transaction is under a duty to disclose to
the other before the transaction is consummated
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a. (e) Facts basic to the transaction, if he knows that the other

is about to enter into it under a mistake as to them, and that
the other, because of the relationship between them, the
customs in the trade or other objective circumstances would
reasonably expect a disclosure of those facts.
iii. Doctrine of privity provides no defense to defendant if plaintiff were
within a class of persons defendant intended to reach
1. Case extends privity between consumer and developer of housing
iv. For fraudulent concealment to be actionable it has to be material to the
transaction
2. Material = outcome determinative, fact is so important that given
truthfully it would change outcome
3. A matter is material if it is one to which a reasonable man would
attach importance in determining his choice of action in the
transaction in question
b. In an action of deceit (fraud) it is not enough to establish misrepresentation
alone; there must be proof of fraud. (Derry v. Peek, 1029)
i. To prevent a false statement being fraudulent there must always be an
honest belief in its truth
ii. Matters not that there was no intention to cheat or injure the person to
whom the statement was made
iii. Test is whether a reasonable man situated as the defendants were, with
their knowledge and means of knowledge, might well believe they did
believe and consider that the representations made were substantially true
1. Scienter = knowledge
c. Restatement 526: A misrepresentation is fraudulent if the maker:
i. (a) Knows or believes that the matter is not as he represents it to be
ii. (b) Does not have the confidence in the accuracy of his representation that
he states or implies, or
iii. (c) Knows that he does not have the basis for his representation that he
states or implies
d. Recovery is allowed for negligent misrepresentation where the defendants
statements are made in the course of his business or profession, and he had a
pecuniary interest in the transaction. (International Products v. Erie RR, 1033)
i. Liability for a negligent misrepresentation arises only when there is a duty
to give correct info
1. Negligence instead of fraud
2. Public interest is to protect people from reliance on false info in
business and personal dealings
ii. Elements of negligent misrepresentation
1. Knowledge
2. Info desired for a serious purpose
3. Reliance
4. False or erroneous
5. Duty of care
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b. Threat of liability without fault could seriously inhibit those who wish to share
thoughts and theories. Thus publisher has no duty to investigate the accuracy of
the contents of the books it publishes. (Winter v. GP Putnams Sons, 1036)
i. Product liability law concerns tangible world and not ideas/expressions
ii. Ex: False aeronautical charts come under products liability, but a book on
how to use a compass or an aeronautical chart would not be
iii. Strict products liability does not apply to books or other statements
iv. A book is pure thought and expression, 1st amendment
1. Shouldnt do anything that infringes on 1st amendment
c. Defendant may be liable for negligent representation of either fact or opinion it if
held itself out to the public as disinterested party possessing superior knowledge
and special info concerning the product it endorsed or guaranteed. (Hanberry
v. Hearst, 1041)
i. Ex: Good Housekeeping held itself out as a disinterested third party which
had examined the shoes, found them satisfactory, and gave its
endorsement, it was inducing people to buy them and would be liable if
they were defective since its reasonable to assume they tested them
ii. Negligence in failing to test and then communicating this
d. Maker of negligent misrepresentation is liable to persons with whom he was not
in contract only if (1) the maker was aware that the representation would be used
for a particular purpose; (2) the maker knew the identity of the party who was
intended to rely; and (3) there was some conduct on the part of the maker linking
him to that relying party, which conduct demonstrates that the maker understood
that the reliance would occur. (Ultramares v. Touch, Niven & Co., 463 supp)
i. A thoughtless slip or blunder, failure to detect a theft or forgery may
expose accountants to endless liability
ii. Ultramares still requires privity
e. Accountant is only liable, absent privity of contract, to a third party when
statements were primarily for the 3rd party making them, in effect, if not in name,
a party to the contract, and only incidentally for that of the formal promisee.
(Credit Alliance v. Arthur Anderson, 1045)
i. Relationship between third party and accounting firm can practically be
the equivalent of privity
1. Professional negligence usually requires privity of contract
2. Worries that there may be too many plaintiffs
3. Dont want one mere error to subject an accountant to indefinite
liability unless the facts indicate that actions approach privity
ii. To be liable in negligence to noncontractual parties one must prove:
1. Accountants were aware financial reports were to be used for a
particular purpose(s)
2. Party intended to rely on them
3. Link between accountant and party, so accountant understood
reliance
iii. Direct communications and personal meetings where representations are
made can result in privity with noncontractual party
b. Intermediate View
14
i. Rd 552, liability for negligent misrepresentation is limited to loss suffered:

1. (a) By the person or one of a limited group of persons for whose
benefit and guidance the accountant intends to supply the info or
knows the recipient intends to supply it; and
2. (b) Through reliance upon it in a transaction that the accountant
intends the info to influence or knows the recipient so intends or in
a substantially similar transaction.
ii. Rd 522 extends causes of action to a limited # of 3rd parties who are
expected to gain access to the financial statement info in an expected
transaction
1. Rd 522 Comment h: Not important that defendant knows third
party but instead representation to influence a particular person or
persons who foreseeably will see info and rely on it
2. Restatement takes an intermediate position on privity
a. Person or limited group of persons
b. The absence of privity should not bar negligence and actions by reasonably
foreseeable 3rd parties against accountants and a finding of non-liability will be
made only if there is strong public policy requiring such a finding. (Citizens State
Bank v. Trimm, Schmidt, and Co., 1050)
i. Unless liability is imposed, 3rd parties who rely upon the accuracy of the
financial statements will not be protected
ii. Unless an accountant can be held liable to a relying third party this
negligence will go undeterred
iii. Accountant is fully liable for all foreseeable consequences of his act
except those consequences that are limited by policy factors
1. Incentive to avoid negligence in preparation of financial statements
2. Less cost to the general public who suffer from negligence
iv. Public policy reasons for not imposing liability despite negligence:
1. Injury is to remote from negligence
2. Injury is out of proportion to the culpability of defendant
3. Highly extraordinary that the negligence caused the harm
4. Recovery would place unreasonable burden on defendant
5. Allowance of recovery would open way for fraudulent claims
6. Allowance of recovery would enter field that has no stopping point
v. Determination of the public policy questions should be made after the
facts of this case have been fully explored at trial
vi. Rules apply to other professionals
b. Liability for fraud if audit is so negligent as to justify a finding that they had no
genuine belief in its adequacy. (Ultramares v. Touche, Niven, & Co., 1056)
i. How do we police honest belief defense
1. So egregious reasonable person would notice/gross negligence
2. Cant turn your eyes from a problem
3. Reasonable person would have investigated
ii. Negligence or blindness even when not equivalent to fraud, is none the
less evidence to sustain an inference of fraud
15
c.
b.
c.
d.
e.
iii. Testing and sampling not sufficient when inspection of the invoices were
necessary
iv. Negligence requires privity, but with fraud you can easily sue accountant
Plaintiff could so easily have investigated that his failure to do so made his
reliance unreasonable. (Williams v. Rank & Son Buick, 1058)
i. Plaintiff may not close his eyes to the obvious
ii. Ex: Plaintiff who does not check to see if car had AC cant say he relied
on statement that there was AC in car
iii. Plaintiff must rely on misrepresentation or else no injury
1. Reliance has to be reasonable and justifiable
2. No one can rely on a known falsity
iv. Whether the falsity of the statement could have been discoverable through
ordinary care is to be determined by:
1. Intelligence and experience of the misled individual
2. Relationship between the parties
The mere expression of an opinion, however strong and positive the language
may be, is not fraud. (Saxby v. Southern Land, 1062)
i. Not justified in placing reliance on vague, indefinite, conjectural or
exaggerated statements
ii. Opinions are different from facts
1. Fraud is not opinions and future events/predictions because it is
unreasonable to rely on them
2. No reasonable person would rely on an opinion
iii. Future predictions, speculative expressions of opinion and mere trade talk
cant be relied on either because they are too speculative
Some statements clearly in the form of an opinion are actionable
i. Jewelry dealer who tells customer a stone is worth $2000
ii. Defendant knows plaintiff is gullible and plans to mislead him
Claims of quality are mere puffing or dealers talk and are not actionable, unless
the statement went beyond the realm of opinion and plaintiff can prove it was
false. (Vulcan Metals v. Simmons Mfg., 1064)
i. Important question is whether parties stand on equal footing
ii. There are some kinds of talk which no sensible man takes seriously, and if
he does he suffers from his credulity
1. Such as puffing or trade talk
2. Statements though generally false should not have been taken
literally by a buyer
Fraud cannot be predicated upon misrepresentations of law, but plaintiff may rely
upon implied factual statement included with representation of law. (Sorenson v.
Gardner, 1067)
i. Misrepresentation concerning legal effect of an instrument is not
actionable
1. Every man is presumed to know the law
2. Plaintiff should have known defendant was only giving an opinion
ii. Restatement 545
16
b.
c.
d.
e.
f.
1. If a representation as to a matter of law in a business transaction is

a representation of fact the recipient is justified in relying upon it
as though it were a representation of any other fact.
2. If the representation as to a matter of law in a business transaction
is a representation of opinion as to legal consequences of facts
known to the maker and the recipient or assumed by both to exist,
the recipient is justified in relying upon it to the same extent as
though it were a representation of any other opinion.
iii. If a representation concerns the legal effect of facts not disclosed or not
otherwise known to the recipient, it may justifiably be interpreted as
implying that there are facts which substantiate the statement
iv. On the other hand if all the facts believed by the maker to exist are stated
to the recipient or otherwise known by him and from these facts the maker
of the representation asserts that title vests in the person in question as a
legal consequence, the representation is an expression of opinion
In making representations the defendant intended to knowingly mislead the
plaintiffs, the representations might be understood to be asserting fact and a
charge of fraud may be based thereon, through the represented event was to occur
in the future. (McElrath v. Electric Investment, 1069)
i. Promises/assurance as to future events cannot be made the basis of fraud
ii. Statement about intentions may still be sued on if defendant knew it was
false and it was reasonably understood as the defendants present plan
Statute of fraud will not render inadmissible testimony of an oral promise made
with the fraudulent intent on the part of the promisor at the time the promise was
made not to fulfill or perform the same. (Burgdorfer v. Thielemann, 1071)
i. If defendant never intended to keep the promise, this was a fraudulent
misrepresentation which is actionable
ii. Statute of Frauds wont stop it
Benefit of bargain: plaintiff can recover the benefit of his bargain if sufficiently
proved. Plaintiff is compensated as though the transaction had been carried out as
represented. (Hinkle v. Rockville Motor Co., 1073)
i. Value of the object represented less its actual value at the time of sale
ii. Usually available in fraud cases, contractual remedy for damages
iii. Gives higher damages
Out of pocket cost: minority of states restricts plaintiffs to out of pocket expenses
so the plaintiff is economically returned to the position he was in prior to the
fraudulent transaction thus allowing him recoupment of actual losses but not
expected gain. (Hinkle v. Rockville Motor Co., 1073)
i. Theory recognizes that tort remedies are designed to compensate for actual
harm suffered
Flexibility theory (Hinkle v. Rockville Motor Co., 1073):
ii. If defrauded party wants what he actually lost, he will get that
iii. If fraudulent representation amounted to a warranty, recovery may be
based on the loss of the bargain because wrongdoers should be punished
for both the fraud and broken promise
17
iv. When value of property cannot be determined, court will award damages
equal only to the loss sustained
v. Benefit of the bargain rule will be employed when damages can be proven
g. Notes on flexibility theory
i. Plaintiff should be allowed to chose which theory to recover under
ii. Damages have to be pecuniary
iii. Recovery follows a strict adherence to out of pocket remedy
iv. Can prove damages through expert testimony
v. Evidence of the cost of necessary repair will demonstrate existence of
damages and provide adequate measures upon which they could be
predicated
II. Defamation
a. Elements for Defamation
i. False Statement
1. Important, cant try a defamation case without a false statement
2. Can sometimes lead to 1st amendment issues (see next section)
ii. Of and concerning plaintiff (Neiman-Marcus, Bindrim, NY Times)
iii. Publication/Communication to someone other then plaintiff
(Econompoulous)
iv. Damages (injury to reputation) (Terwilliger)
b. Defamation is designed to protect someones reputation
i. Once reputation has been blemished it may be impossible to repair it
c. Defamatory is a legal conclusion, cant be reached until ruling
ii. Say instead injurious to reputation
d. Pleading defamation
i. Use extrinsic facts to prove statement is injurious to reputation
ii. Facts may not be enough, may have to plead innuendo-connection
e. Two forms of defamation
i. Libel = written (generally)
1. If libel, then actionable per se without showing damage
2. We presume you were injured if it was a libel
3. Also includes pictures, signs, statutes, motion pictures, hanging
plaintiff in effigy, reading a defamatory writing out loud, etc.
ii. Slander = oral (generally)
1. Requires a showing of special damage
2. Also includes transitory gestures, such as the signals of a deaf
mute, or stopping a woman and searching her shopping bag
iii. Generally libel is communicated by the sense of sight, while slander is
conveyed by the sense of hearing
iv. Restatement 568:
1. Libel consists of the publication of defamatory matter by written or
printed words, or by its embodiment in physical form, or by any
other form of communication which has the potentially harmful
qualities characteristic of written and printed words
18
b.
c.
d.
e.
f.
2. Slander consists of the publication of defamatory matter by spoken

words, transitory gestures, or by any form of communication other
than those stated in Subsection (1)
3. The area of dissemination, the deliberate and premeditated
character of its publication, and the persistence of the defamation
are factors to be considered in determining whether a publication is
a libel rather than a slander.
If the publication itself, without reference to extrinsic facts, is capable of carrying
a defamatory meaning and if yes it is for a jury to determine whether it was so
understood by at least one person. (Belli v. Orlando Daily Newspapers, 830)
i. A civil action for libel when there has been a false and unprivileged
publication by letter or otherwise which exposes a person to distrust,
hatred, contempt, or ridicule
ii. It is for the court to determine whether the words are reasonably capable
of a particular interpretation, or whether they are necessarily so; it is then
for the jury to say whether they were in fact understood as defamatory
iii. If the language used is open to 2 meanings it is for the jury to determine
whether the defamatory sense was the one conveyed
iv. Role for both judge and jury in defamation cause of action
1. If article only has one meaning, judge only
2. If article can have 2 meanings, goes to jury
Allegation is defamatory as long as some who would feel so, even though they
would be wrong to do. (Grant v. Readers Digest, 834)
i. Rd 559: Statement is defamatory as long as a significant and respectable
minority of persons would draw an adverse opinion of the plaintiff from it,
even if most people would not.
Substantial truth is an affirmative defense to defamation. (Kilian v. Doubleday,
837)
ii. Only need something to corroborate the story
Where the group or class libeled is large, none can sue even though the language
used is inclusive, while when a group or class libeled is small, and each and every
member of the group or class is referred to, then individual member can sue.
(Neiman-Marcus v. Lait, 841)
i. Most, some, all: language is important
ii. Even where the group is large a member may have a cause of action if
some particular circumstances point to the plaintiff as the person defamed
iii. Groups smaller then 25, courts will entertain individual defamation
claims, but over 25 and they wont
iv. Not an official defense but can attack of and concerning element of
defamation
Any living person can be defamed, but generally agreed that there can be no
actionable defamation of the dead, since there is no living person whose
reputation is affected.
i. Defamation of the dead may, however, be actionable if it defames
someone living
19
g. Corps and partnerships have no reputation in the personal sense, and cannot be
defamed
ii. Corporation can maintain an action for defamation that casts an aspersion
upon its honesty, credit, efficiency, or other business or moral character
iii. A charitable or not for profit, may establish a good cause of action since
defamation affecting its character or operations may deprive it of gifts or
other sources of revenue
iv. Same is true of a partnership, or an unincorporated association, such as a
labor union, to the extent that the latter is recognized as a legal entity
capable of bringing suit
h. If a non-explicit reference to the plaintiff is reasonably understood as in fact
referring to him, it is not important that a different name or characterization
refers to the plaintiff, nor will recovery be denied merely because the publication
is labeled as a novel. (Bindrim v. Mitchell, 846)
i. Test is whether a reasonable person reading the book, would understood
that the fictional character therein pictured was, in actual fact, the plaintiff
acting as described.
ii. Fiction will not protect you from injuring a reputation
1. If plaintiff is similar to the fictional character, any differences with
the fictional character may be attributed to the plaintiff as how he
actually acts
2. Anyone who knew plaintiff could reasonably identify him as a
fictional character
3. Irrelevant whether all readers realized real and fictional person
were identical
i. Defamation by radio or TV is actionable per se, whether read from a script or adlibed. (Shor v. Billingsley, 852)
i. Utterance of defamatory remarks, read from a script into a radio
microphone and broadcast constitutes publication of libel
ii. Ad-libbed lacks the measure of durability possessed by written libel, but in
no wise lessens its capacity for harm
iii. In the hand of a wrongdoer, radio and motion pictures have untold
possibilities toward producing an effective libel
iv. Matter is now primarily regulated by statute
1. Most statutes provide that any broadcast defamation is to be treated
as slander, whether there is a script or not
j. To establish slander plaintiff must show he sustained special damages/harm of a
pecuniary nature because of the natural, immediate, and legal consequence of
the defamatory words. (Terwilliger v. Wands, 853)
i. Special damages = pecuniary
ii. Damages should flow as a result of the false statement
iii. Consequence was not a natural, ordinary one, as it does not prove that the
plaintiffs character was injured
iv. Hard to show injury in defamation
v. Mere apprehension by plaintiff that his reputation would be lowered is
insufficient
20
k. Slander per se: statements assumed to be slander without having to show damages
i. Categories of slander per se
1. Imputations of major crime
a. Bigamy
b. Incest/pedophilia
c. Wife/parent beating
d. Lewdness
e. Fraud
2. Loathsome disease
a. HIV/AIDS once considered this
b. Bird flu, SARS, Swine flu
3. Defamation incompatible with proper conduct of business,
trade, profession or office
a. Any profession qualifies
4. Serious sexual misconduct
a. Homosexuality
b. Attacking chastity of a woman
l. Libel per se and libel per quod
ii. Libel per se: actionable without showing of special damages
iii. Libel per quod: statements that are not defamatory on their face and
extrinsic evidence are necessary to prove the claim
m. Plaintiff must show that a third person not only heard or saw, but also understood
the communication and perceived its defamatory aspects. (Econompoulos v.
Pollard, 858)
i. Publication: communication to a third party about the plaintiff
ii. Person has to understand communication/publication to be actionable
iii. Sometimes the court presumes that some one has read and understood the
defamatory words
n. If its an interactive website and not a content provider, the website will not be
liable for any defamatory statements made. (Carafano v. Metrosplash.com, 861)
i. Website has immunity if another party uses it to publish false or
defamatory material
ii. However if the website is personally publishing info and not simply
providing a forum, it loses immunity and becomes liable
o. Publication of a book, periodical, or newspaper containing defamatory matter
gives rise to but one cause of action for libel, which accrues at the time of the
original publication, and the SOL runs from that date. (Ogden v. Association of
the US Army, 867)
i. Old common law rule: each sale or delivery of a copy of the offending
material will give rise to a new and separate cause of action
ii. New rule called the single publication rule
p. Basis for Liability for Publishers
i. The fact that the publisher has no actual intention to defame a particular
man or indeed to injure anyone does not prevent recovery of
compensatory damages by one who connects himself with the
publication. (Corrigan v. Bobbs-Merrill, 870)
21
1. Irrelevant that the defendant had every reason to believe that the
statement was true
2. Question is not so much who was aimed at as who was hit
ii. Exception: a vendor or distributor of a newspaper, magazine, or book is
called a secondary publisher and is not liable if he had knowledge of
libelous matter in the publication and had no reason to be put on guard
1. Need intent to be liable
iii. A newspaper or book publishing company does not qualify as a secondary
publisher and is subject to strict liability even though it innocently took the
defamatory material from someone else without reason to be put on guard
iv. Republication from wire services will not be subject to liability if:
2. The service was reputable
3. Defendant did not know of the falsity
4. The story itself does not reveal its falsity
5. No substantial change was made to the story
v. Local radio and TV networks are treated as an original publisher
vi. Internet websites that provide news are secondary sources
II. Defamation and the First Amendment
a. Supremacy Clause: This Constitution, and the Laws of US which shall be made in
Pursuance thereof; and all Treaties made, or which shall be made, under the
Authority of the US, shall be the supreme law of the land; and the judges in every
state shall be bound thereby
b. 1st amendment: Congress shall make no law abridging the freedom of speech, or
of the press
i. Uninhibited, robust and wide-open debate on public issues (NY Times)
ii. Avoid self-censorship (Gertz)
iii. Breathing space essential for fruitful exercise of speech (Gertz, HarteHanks)
c. 10th Amendment: powers not delegated to the US, nor prohibited by it to the
States, are reserved to the States respectively, or to the people
d. A public plaintiff cannot recover damages for a defamatory falsehood made
against him/her without clear and convincing proof that the false statement was
made with actual malice (knowledge that it was false or with reckless
disregard of the truth). (NY Times v. Sullivan, 871)
i. Defamation is primarily a state cause of action until SC got involved
1. Constitution limits a states power to award damages for libel in
actions brought by public officials against critics of their official
conduct
2. Plaintiffs right to recover for defamation must give way to
defendants 1st amendment rights
ii. Policies on the 1st amendment and defamation
1. Debate on public issues should be uninhibited, robust, and wideopen, and it may well include vehement, caustic, and sometimes
unpleasantly sharp attacks on government and public officials
a. Constitutional protection does not turn upon the truth,
popularity or social utility of the ideas and beliefs
22
2. A rule compelling the critic of official conduct to guarantee the

truth of all his factual assertions on pain of libel leads to a
comparable self-censorship
iii. Actual malice = knowledge that it was false or with reckless disregard of
whether it was false or not
1. Highest level of fault
2. Failure to investigate is not sufficient to establish malice
a. Simply negligence
iv. Public benefit from publicity is so great and the chance of injury to private
character so small that such discussion must be privileged
st
b. 1 amendment prevents defamation when:
i. Public officials/figures is a plaintiff
1. Public officials position in gov has such apparent importance that
the public has an independent interest in the qualifications and
performance of the person who holds it, beyond the general public
interest in the qualifications and performance of all gov employees
2. Includes candidates for public office and public figures
ii. Media defendant
iii. Matters of public concern
1. Example: Civil rights movement
b. Reckless disregard of the truth is not measured by whether a reasonable prudent
man would have published or would have investigated before publishing, instead
there must be sufficient evidence to permit the conclusion that the defendant in
fact entertained serious doubts as to the truth of his publication. (St. Amant v.
Thompson, 879)
i. Stake of the people in public business and the conduct of public officials is
so great that neither the defense of truth nor the standard of ordinary care
would protect against self-censorship and thus adequately implement 1st
amendment policies
ii. Essential that 1st amendment protect some erroneous publications as well
as true ones
iii. Defendant in a defamation action brought by a public official cannot,
however, automatically insure a favorable verdict by testifying that he
published with a belief that the statements were true.
1. Finder of fact must determine whether the publication was made in
good faith.
2. Professions of good faith will be unlikely to prove persuasive, for
example, where a story is fabricated by the defendant, is the
product of his imagination, or is based wholly on an unverified
anonymous telephone call.
3. Nor will they be likely to prevail when the publishers allegations
are so inherently improbable that only a reckless man would have
put them in circulation.
4. Likewise, recklessness may be found where there are obvious
reasons to doubt the veracity of the informant or the accuracy of
his reports.
23
iv. Reckless disregard is a subjective analysis

c. Requirement that defendant have in fact entertained serious doubts as to the truth
of the statement being published is satisfied only where defendant is shown to
have had a high degree of awareness of probable falsity (Harte-Hanks
Communications v. Connaughton, 882)
i. Clear and convincing standard
1. Whether the evidence in the record in a defamation case is
sufficient to support a finding of actual malice is a question of law.
2. Plaintiff is entitled to prove the defendants state of mind
through circumstantial evidence
ii. Actual malice requires that the statements were made with a reckless
disregard for the truth
iii. A reckless disregard for the truth requires more than a departure from
reasonable prudent conduct
iv. Must be sufficient evidence to permit the conclusion that the defendant in
fact entertained serious doubts as to the truth of his publications
v. In cases involving the reporting of third partys allegations, recklessness
may be found where there are obvious reasons to doubt the veracity of the
informant or the accuracy of his reports.
vi. Fact that defendant published the defamatory material in order to increase
its profits does not suffice to prove actual malice
d. If plaintiff is not a public official or a public figure, there is no constitutional
requirement that he prove knowledge of truth or reckless disregard of the truth.
As long as states do not impose liability without fault, they may define for
themselves the appropriate standard of liability for a publisher/broadcaster of
defamatory falsehood injurious to a private individual. (Gertz v. Welch, 892)
i. Negligence = moderate level of fault, plaintiff must prove either that the
defendant knew his statement was false or that he was at least negligent in
not ascertaining its falsity
ii. Punishment of error runs the risk of inducing a cautious and restrictive
exercise of the constitutionality guaranteed freedoms of speech and press
1. Want to avoid self censorship
iii. Legitimate state interest in compensating individuals for the harm inflicted
on them by defamatory falsehood
1. State interest in compensating injury to the reputation of private
individuals requires a different rule then actual malice
2. Negligence standard instead
iv. First remedy of any victim of defamation is self-help
v. Commonly, those classed as public figures have thrust themselves to the
forefront of particular public controversies in order to influence the
resolution of the issues involved
1. Person does not become a public figure merely because he has
become involved in a controversy of public interest
2. Being a lawyer, by itself, does not make you a public figure
vi. Private individuals are more vulnerable to injury and more deserving of
recovery
24
vii. Private defamation plaintiff who establishes liability under this standard
may recover only compensatory damages, no presumed or punitive
damages
b. If the defamatory statement does not involve a matter of public concern,
presumed damages may be allowed, even without a showing of actual malice.
(Dun & Broadstreet v. Greenmoss Builders, 902)
i. State interest needs to be strong and legitimate
ii. Speech of purely private concern is of less 1st amendment concern
iii. Reduced constitutional value of speech involving no matters of public
concern means that a strong and legitimate state interest will adequately
support awards of presumed and punitive damages, even absent a showing
of actual malice
iv. Whether speech addresses a matter of public concern must be determined
by the expressions content, form, and context
v. Ex: Defendants credit report involves no public issue, but instead speech
solely in the individual interest of the speaker and its specific business
audience
1. Unlikely to be deterred by state regulation
c. When a newspaper publishes speech of public concern, a private-figure plaintiff
cannot recover damages without showing that the statements at issue are false at
least where the defendant is a media organization. (Philadelphia Newspapers v.
Hepps, 907)
i. Gov cannot limit speech protected by the 1st amendment without bearing
the burden of showing that its restriction is justified
ii. Means some plaintiff with legitimate concerns will lose because they cant
establish falsity
1. True even though the plaintiff is a private figure
iii. Private figure plaintiff bears the burden of showing that speech at issue
is false before recovering damages for defamation from a media defendant
iv. If the plaintiff is a public figure, she too must clearly bear the burden of
proving falsity, since the statement will probably by virtue of the
plaintiffs public figure status alone be of public interest
v. For constitutional issues truth is not a defense but a burden on plaintiff
vi. Contrary rule would cause media defendants to fail to carry items of
public concern because they would fear the resulting liability if they could
not prove truth
vii. Burden of proving falsity would add only marginally to the burdens that
the plaintiff must already bear, since he must in any event show fault and
it would be very hard for him to do that without also showing that the
statement is probably false
d. Public figures can be limited or universal
i. In deciding whether a person is a public figure, it is necessary to inquire
whether a public controversy exists
ii. Universal: notoriety is so pervasive they are always public figures
iii. Limited: public figures for a limited period of time on an issue
1. Voluntary: your choice to be a public figure, elements are:
25
a.
b.
c.
d.
Access to channels of communications

Assumed role of special prominence
Sought to influence resolution/outcome
Controversy existed prior to publication of defamatory
statement
e. Plaintiff still a public figure at the time of the alleged info
2. Some person may be deemed to be a public figure even if they
were drawn involuntarily into a public controversy
e. Public officials are persons who have or appear to the public to have, substantial
responsibility for or control over the conduct of governmental affairs
i. Includes someone who has been elected to or is running for public office
ii. Publication not attaching to a public officials status does not attract
constitutional protection
iii. Lawyers arent public officials
1. Officers of the courts but not all lawyers are practicing
f. Where a statement of opinion implies the assertion of underlying facts, and
those underlying facts are provable false, then the statements of opinion can give
rise to liability for defamation. (Milkovich v. Lorain Journal, 915)
i. Opinion can trigger a defamation claim if a statement implies an
assertion of objective fact
ii. Restatement 566, comment a: Under the law of defamation, an expression
of opinion could be defamatory if the expression was sufficiently
derogatory of another as to cause harm to his reputation, so as to lower
him in the estimation of the community or to deter third persons from
associating or dealing with him.
iii. Under 1st amendment there is no such thing as a false idea, but there is no
constitutional value in false statements of fact
iv. Restrictive of the law of libel if writer could escape liability for
defamatory conduct simply by saying its opinion
1. Opinion does not get any special 1st amendment protection
2. Opinion can assert facts and be the basis for defamation
v. Society has an interest in preventing and redressing attacks upon
reputation
g. Summary of Defamation and first amendment
i. Public plaintiff (officials/figures), Media defendant, Public concern
1. Fault is actual malice (highest level of fault)
2. Damages are compensatory and punitives
3. See NY Times
ii. Public plaintiff (officials/figures), non-media defendant, public concern
1. Fault is actual malice
2. Damages are compensatory and punitives
3. See NY Times
iii. Private plaintiff, media defendant, public concern
1. Fault is negligence (failure to verify would be sufficient)
2. Damages are compensatory
3. See Gertz
26
4. Private plaintiff has to establish falsity, see Philadelphia

Newspaper
iv. Private plaintiff, non-media defendant, private concern
1. No fault standard, no constitutional issues, revert to state rule
2. Presumption of damages, if 1st amendment issues then damages not
presumed
II. Defamation: Privileges and Defamation
a. Privileges
i. Within a certain context, someone can say things that are injurious to
reputation and be safe from liability
1. Defendant has the burden of raising privileges
ii. Some speech is essential for the functioning of representative government
and the administration of justice and an absolute privilege.
1. Nature of speech could not be judicially reviewed if defamation
has some reasonable bearing upon or relation to the subject of
inquiry
2. Absolute privilege if interest is one of paramount importance,
without regard to his purpose or motive or reasonableness of his
conduct
3. Legislative, judicial and executive privilege is absolute
iii. Other speech attracted a qualified or conditional privilege
1. Not actionable although defamatory if communicated by the
publisher to the recipient where both parties had a reciprocal duty
and interest to communicate and receive it
2. If the communication is transmitted to persons who have no duty
or interest to receive it, there is no privilege
b. Judicial privilege
i. Judge has absolute immunity for defamatory words published in the
course of judicial proceedings
ii. Attorney, juries and witnesses can have privilege if relevant and pertinent
to the issues in the litigation
c. Legislative proceedings: absolute privilege to members of Congress and state
legislatures in the performance of their legislative functions
d. Public Officials
i. Federal: Cabinet other federal officials of high rank are given immunity
ii. State: High state officials have an absolute immunity in the discharge of
their official duties
1. Includes press releases to inform the public of what they are doing
e. A defamatory publication is conditionally privileged when the occasion shows
that the communicating party and the recipient have a mutual interest in the
subject matter or some duty with respect there to. (Sindorf v. Jacron Sales, 926)
i. Defendant can escape liability if in furtherance of some interest of social
importance, which is entitled to protection even at the expense of
uncompensated harm to the plaintiffs reputation
ii. May be qualified conditional privilege if it has lesser social value, requires
good motives and reasonable behavior
27
1. Ex: Employer will generally have such a conditional privilege to

give info about his ex-employee to a new boss
iii. Publication is conditionally privileged when it is fairly made by a person
in the discharge of some public or private duty, whether legal or moral, or
in the conduct of his own affairs, in matters where his interest is concerned
iv. Types of interest protected by qualified privilege
1. Interest of publication
2. Interest of others
3. Common interest of publisher and recipient
4. Communications made to one who may act in the public interest
5. Fair comment on matters of public concern
v. Condition for qualified privileges is they must be exercised in a reasonable
manner and for a proper purpose
1. Immunity is forfeited if the defendant steps outside the scope of
the privilege or abuses the occasion
vi. Does not include publication to any person other than those whose hearing
of it is reasonably believed to be necessary or useful for the furtherance of
that interest
vii. Burden on defendant to establish existence of a privilege, by proof of
proper interest or duty justifying the utterance of the words
viii.
Common Interest: existence of a common interest between
publisher and recipient gives rise to a privilege to speak regarding the
common interest
ix. Defendant cannot claim a qualified privilege if he knows that his
defamatory statement is false or does not believe it to be true.
x. Privilege would also be lost if the primary purpose behind the
defendants statement is something other than protecting the interest for
which the privilege is given
b. Remedies
i. Damages
1. Prime remedy for defamation
2. General damages for libel and slander per se
3. For publication of public concern its compensation for actual
injury unless plaintiff establishes actual malice
4. Special damages must be proven in case of slander if not per se
5. Actual injury may include impairment of reputation, personal
humiliation, mental anguish and suffering
ii. Mitigation of Damages
1. Provocation by the plaintiff is generally regarded as admissible for
the purposes of mitigating punitive damages
2. Where the defamatory statement would not be believed, the
resultant damages are reduced
xi. Libel-Proof plaintiff: plaintiffs possess such an atrocious reputation that
they are in effect, immune from libel in a given suit
xii. Incremental harm doctrine: plaintiffs reputation is so reduced that he is
unable to show that the imputation materially worsened his reputation
28
xiii.
Bad reputation: evidence of a bad reputation may reduce the
damages a plaintiff can recover
xiv.Punitive damages: awarded if malice is shown
xv. Declaratory relief: judicial determination that statement is false
iii. Self-help
1. First remedy of any victim of defamation is self-help
2. Using available opportunities to contradict the lie or correct the
error and thereby to minimize its adverse impact
3. Not liable to the original defamer unless he abuses the privilege by
making irrelevant charges or charges of his own in reckless
disregard of their truth or falsity
iv. Right of response statutes
1. Several state have passed statutes requiring a public
communication medium to give a right of response to a person
who claims that he has been defamed
2. Person claiming to have been defamed may also go to the person
publishing the defamation, explain that there has been a mistake
and request a correction or retraction
xvi.
Retraction statutes: defendant publishes a retraction of a
defamatory statement within a certain period of time and it bars recovery
by plaintiff
1. A retraction to be effective must be unequivocal and not partial or
hesitant and hypothetical
v. Injunctive relief
2. Prior restraint of a publication runs afoul of 1st amendment
3. Not generally a remedy for defamation
4. Suitable when it has been formally determined in court that a
statement is both defamatory and false, and defendant continues to
publish it
II. Invasion of Privacy
a. Invasion of privacy protects right of a private individual to be left alone and
protected from unauthorized publicity in essentially private affairs
i. Different from constitutional privacy (4th amendment)
ii. Protect injuries both general and economic
b. Four types of privacy torts
i. Appropriation (of anothers name or likeness)
ii. Intrusion (unreasonable intrusion upon seclusion of another)
iii. Public disclosure of private facts (offensive facts)
iv. False light (publicity that places another in a false light)
c. Appropriation tort happens when one appropriates anothers image to his own use
or benefit and is subject to liability to the other for the invasion of his privacy.
(Joe Dickerson and Associates v. Dittmar, 940)
i. Appropriation tort protects the property interest of an individual in his
name or likeness
1. Tort protects plaintiff from the use of his/her name, likeness, or
identity for the defendants own benefit (e.g. commercial gain)
29
b.
c.
d.
e.
2. Plaintiffs injuries can be either personal (i.e. humiliation,

embarrassment, etc.) or economic (i.e. value of name or likeness)
ii. Elements of appropriation
1. Defendant use the plaintiffs name or likeness
2. Use of plaintiffs name or likeness was for the defendants own
purposes or benefit, commercially or otherwise
3. Plaintiff suffered damages (can be economical or personal)
4. Use of name or likeness caused the damages
iii. Newsworthiness or info that is of public concern will defeat appropriation
1. Commission of crime, prosecutions resulting from it, and judicial
proceedings arising from it are legitimate concerns to the public
iv. Illogical to require the plaintiff prove that her identity has value since even
a plaintiff with commercially-valueless identity can experience mental
suffering from appropriation
Right to publicity
i. Statutory right that protects celebrities
ii. Protecting the commercial value of someones name, likeness, or identity
iii. Evolved to police against appropriations of names, likeness, and identity,
where the name and likeness had economic value (celebrities)
iv. Names, likeness and identity is treated as a property right which is
transferable and capable of survival after death
Examples of thing that have been held to be associated or identified with the
plaintiff
i. Use of race car drivers car to promote cigarettes
ii. A similar voice
iii. Birth name of famous athlete
1. No liability for the mere use of the same name as that of the
plaintiff
iv. Phrases such as Heres Johnny to sell portable lavatories
1st and 14th amendments do not immunize the media when they broadcast a
performers entire act without consent. (Zacchini v. Scripps-Howard
Broadcasting, 951)
i. Usually there is no objection to publication of an act as long as the
performer gets the commercial benefit of such publication
1. When they are not compensated someone is causing the same
problems if they would show a copyright work without permission
of the owner
Intrusion tort protects against intrusion (physical or non-physical) into spheres
from which an ordinary man in plaintiffs position could reasonably expect that
the particular defendant should be excluded. (Sanders v. ABC, 952)
ii. Physical intrusion upon seclusion or solitude has been recognized as a
distinct form of invasion of privacy
iii. Elements of Intrusion
1. An act of intrusion into a private place, conversation or matter
(physical or non-physical)
30
b.
c.
b.
c.
a. Objective expectation of privacy and it will vary with

respect to the identity of the intruder or the nature of the
intrusion
2. Done in a manner that is highly offensive to a reasonable person
iv. Tort is proven only if the plaintiff had an objectively reasonable
expectation of seclusion or solitude in the place, conversation or data
source
1. Not absolute or complete privacy, just reasonable expectation
2. Ex: Reasonable expectation to not be recorded at workplace
Ordinarily no liability for taking the plaintiffs photograph in a public place
i. Reasonable expectation of privacy is the key
ii. If the interest protected is highly personal (sexual or intimate) and
psychological tranquility is at stake, expectation of privacy is at its highest
Liability will be imposed for publication of private facts when the matter
publicized is of a kind that would be highly offensive to a reasonable person and
is not of legitimate concern to the public. (Hall v. Post, 961)
i. Four elements of public disclosure of private facts tort
1. Publicity/publication of facts
2. Private facts (facts that are not already available to the public)
3. Highly offensive to a reasonable person
4. Absence of legitimate public concern
ii. Not legitimate public interest if publicity ceases to be the giving of info to
which the public is entitled and becomes morbid and sensational prying
into private lives for its own sake, with which a reasonable member of the
public, with decent standards, would say that he has no concern.
iii. Private facts branch of invasion of privacy tort is constitutionally suspect
1. 1st amendment protects speech/press and prohibit recovery when
defendant publishes the truth
2. Even false statement which cause actual harm are given protection
to avoid limiting the right of free speech and press and reducing
public disclosure
3. Other torts cover this tort: IIED and Intrusion
4. Because of these reasons not all states have adopted this tort
As in breach of confidentiality, no liability for breach of privacy will arise for
disclosure if the facts were in the public domain. Examples:
i. Dates of birth and marriage
ii. Military service record
iii. Tax delinquency
iv. Death certificate
Constitutional protection for speech and press preclude false light reports of
matters of public interest in the absence of proof that the defendant published the
report with knowledge of its falsity or in reckless disregard of the truth. (Cantrell
v. Forest City Publishing, 973)
i. Protected interest in false light tort is against publicity that places the
plaintiff in a false/negative light in the eyes of the public
1. Protection of reputation
31
ii. Elements of false light

1. Statements, comments, implications about plaintiff (false or true)
2. Publication (made to public)
3. Placing plaintiff in a negative light in the eyes of the public
4. Malice
a. Actual malice if matter, comments, or implications, pertain
to a matter of legitimate public concern (Ex: a bridge
collapse)
iii. Focus on the defendants attitude toward the plaintiffs privacy, not towards
the truth or falsity of the material published
iv. Publisher of false article may be liable under doctrine of respondent
superior
v. No punitive damages unless there is reckless disregard
b. Public figures and public officials may not recover for the tort of IIED by reason
of publication (such as a parody) without a showing (in addition) that the
publication contains a false statement of fact, which was made with actual malice.
(Hustler Magazine v. Falwell, 978)
i. 1st amendment protects speech, even parodies and political cartoons
ii. Even when a speaker or writer is motivated by hatred or ill-will, his
expression is protected by the 1st amendment
II. Malicious Prosecution
a. Malicious prosecution protects against the wrongful prosecution of criminal or
civil proceedings.
i. Protection of the individual citizen against unjustifiable and oppressive
litigation of criminal charges (which involve not only pecuniary loss, but
also distress and loss of reputation)
ii. Freedom from unjustifiable litigation balanced against the social interest
of encouragement to use the legal system to resolve disputes
b. Examples of Malicious Prosecution
i. Store guard has plaintiff prosecuted for shoplifting when there is no
reasonable evidence to suggest that the plaintiff was guilty
ii. Merchant prosecutes the plaintiff for fraud, simply because the plaintiffs
check was dishonored by the bank (hot check statute)
iii. Employer prosecutes the plaintiff in the unjustified belief that plaintiff was
stealing the employers goods
c. Malicious Prosecution in Criminal Proceeding
i. Rd 653 Elements of a Cause of Action: A private person who initiates or
procures the institution of criminal proceedings against another who is not
guilty of the offense charged is subject to liability for malicious
prosecution if
1. (a) He initiates or procures the proceedings without probable cause
and primarily for a purpose other than that of bringing an offender
to justice, and
2. (b) The proceedings have terminated in favor of the accused.
ii. Elements of Criminal Malicious Prosecution
32
1. The defendant initiates or procures (continues) the institution of

criminal proceedings against another who is not guilty of the
offense charged
2. There has been a termination of the proceedings in favor of the
accused (e.g. the plaintiff was not guilty of the crime and suit was
terminated in plaintiffs favor)
3. A lack of probable cause (e.g. the defendant initiates or procures
the proceedings without probable cause)
4. The defendant acts with malice in initiating or procuring the legal
proceedings against the plaintiff
5. The plaintiff must have suffered injuries as a result of the wrongful
actions (e.g. the prosecution)
iii. Criminal proceeding must terminate in favor of the accused and this
requirement is met where there is an acquittal, the prosecutor decides not
to prosecute, the grand jury refuses to indict, or any other disposition that
indicates the weakness of the case. (Skaggs v. Graves, 517)
1. In criminal proceedings there will be a presumption that there was
injuries
b. Malicious Prosecution in Civil Proceedings
i. Elements are the same for both criminal and civil prosecutions; the major
difference involves the element of damages.
ii. In malicious civil prosecution actions, damages are not presumed and
must be proven.
iii. Plaintiff must plead and prove special injury
1. The requirement of special injury for wrongful civil proceedings,
and the refusal to allow loss of reputation to count as special
injury, are necessary to keep the balance between plaintiffs and
defendants. (Friedman v. Dozorc, 520)
a. Special Injury: beyond those which always attend litigation
i. Attorney fees dont count
ii. Loss of reputation is not enough
b. A contrary rule would arm all prevailing defendants with an
instrument of retaliation
c. All potential plaintiffs and their attorneys would have to
weigh the likelihood that if they lost on merits in the first
action, they would not only take nothing but also be forced
to defend an action for wrongful civil proceedings; this
would be an unfair burden to place on prospective plaintiffs
c. Defenses to Malicious Prosecution
i. Fact that the plaintiff (i.e. person accused) is guilty of the crime charged
against him is a complete defense against liability for malicious
prosecution
ii. Rationale: law protects only the innocent and if guilt, the plaintiff
deserved treatment. Also, the action is analogous to defamation and the
burden of proof (i.e. not guilty) is on the defendant.
II. Abuse of Process
33
a. Abuse of Process protects freedom from the abuse of the judicial process;
protection of the integrity of judicial process
i. It is not the wrongful procurement of legal process or the wrongful
initiation of criminal or civil proceedings, but is the misuse of the process,
no matter how properly obtained, for any purpose other than that which it
was designed for
ii. It is immaterial that the process was properly issued, or that it was
obtained in the course of the proceedings that were brought with probable
cause, and for a proper purpose
iii. It is immaterial that the proceedings terminated in favor of the person
instituting or initiating them. It is the subsequent misuse of the process,
through properly obtained, constitutes the misconduct necessary to trigger
liability.
iv. The tort is not available for the mere filing of a frivolous action, absent
proof that the claim was filed for a collateral or ulterior motive
b. Even if a criminal or civil proceeding is brought with probable cause, and for
allowable motives, a person involved in it may use various litigation devices
available to him during the course of it for improper purposes. (Grainger v. Hill,
1018)
i. Liable for abuse of process
ii. Gist of abuse of process is that the defendant brought a proceeding with
some ulterior motive not connected with the litigation itself
iii. Thus even a suit brought upon probable cause, or resolved in the plaintiffs
favor, may be an abuse of process if it was brought to coerce the defendant
into some unrelated action.
c. Elements of Abuse of Process
i. An act in the use of the judicial process which is improper in the regular
prosecution of the proceeding
ii. An ulterior purpose for instituting the lawsuit. There must be some
ulterior objective (other than that of the prosecution) not legitimate in the
use of process.
iii. Judicial process. The judicial process, in some manner, must be involved.
iv. Malice (improper purpose or motivation for bringing the action)
1. Ex: Proper purpose to call all teachers of a school being sued to
testify on the same day even if it means the school will have to
shut down if done to shorten length of time necessary for trial
d. Differences Between Malicious Prosecution and Abuse of Process
i. Abuse of Process. The gist of the tort is not the commencing of an action,
or causing process to begin without justification, but the misuse or
misapplication of process that is justified in itself, for an end other than
that which the process was designed for.
ii. Malicious prosecution requires a termination of the lawsuit in favor of the
accused. (Abuse of process does not require this).
iii. Malicious prosecution requires a showing of no probable cause to bring
the suit. In abuse of process cases, there is probable cause to use judicial
34
process. However, defendant uses the process for an improper motive (i.e.
motive other than for what the process is designed to get at)
35

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