Intentional Torts ( Outline 3)

What are Torts?

Wrongful acts other than a broke promise

Tort Law has to do with what?

The recovery for the harm caused by wrongful acts

What are the two objectives of Tort Law?

1. To provide a remedy of people who have been injured

2. To discourage wrongful behavior

What Interests are protected by tort law?

All kinds of interests including your person, property, economic interests, and our reputation

The Case of Alex’s Drinking Problem

Suppose you posted that Alex, a manager at a local real estate firm, was often drunk and fighting in public. Alex’s boss read the post and fired Alex, and Alex sues you for DEFAMATION.

A. What is the best defense to such a lawsuit?

That the claim was true and Alex did do that.

What is an absolute defense to defamation?

Truth

The Case of Alex’s Drinking Problem

Suppose you posted that Alex, a manager at a local real estate firm, was often drunk and fighting in public. Alex’s boss read the post and fired Alex, and Alex sues you for DEFAMATION.

B. Suppose you believed the post was true, but in fact Alex was never drunk and fighting. Is your good faith belief a good defense?

No, as your good faith in general is not a good defense

Even if you believed the statement was true are you liable?

Yes you are liable to defamation.

Intentional torts do not necessarily require an intent to do what?

Wrong, only an intent to do the act, which act it turns out violates the interests of another in a way the law does not allow.

Conversion

Wrongfully taking or possessing the property of another without their consent

Would a innocent buyer of stolen goods be liable?

Yes as a thief gets no title and is liable for the tort of conversion → innocent buyer of stolen of good is also liable.

What are the two exceptions that make a belief the statement was true a good defense to defamation?

1. Plaintiff is a public figure

2. Defendant has a privilege to make the false statement.

What makes a plaintiff a public figure

1. Public official (Government official, school principal)

2. One who becomes one voluntarily

How does a plaintiff voluntarily become a public figure?

1. Becomes a celebrity

2. Engaged in public gatherings

What two ways must a public figure prove malice regarding the defendant?

1. Either the defendant knew the statement was false or

2. Knew they didn’t know whether it was true or false → Reckless Disregard: recklessly disregarding the truth

What are the 2 types of privileges that gives a defendant to make a false statement?

Conditional privilege and Absolute Privilege

Conditional Privilege

Arises when the parties have a legitimate interest in the communication → they had a need to know that information. Example: You report a crime to the police which is a false statement but bc police are a third party you are not liable

If you falsely report a crime that you thought was true to the police are you liable?

No as you had a good faith belief that it was true and because you reported it to a third party who have a legitimate interest in the communication.

Student v. Professor

At Student's request, Professor wrote a recommendation letter to Employer. The letter contained some false, harmful statements about Student, causing Employer to reject Student's job application. Student sued Professor for defamation, and Professor argued that she had a good faith belief the false statements were true.

A. Explain whether Professor's argument is a good defense to defamation.

Yes, the professor has a good defense as they have a conditional privilege because they communicated to the employer in good faith which as a legitimate interest in knowing.

Student v. Professor

At Student's request, Professor wrote a recommendation letter to Employer. The letter contained some false, harmful statements about Student, causing Employer to reject Student's job application. Student sued Professor for defamation, and Professor argued that she had a good faith belief the false statements were true.

B. How could you change the facts to get a different result in A?

If the professor knew it was true → Posted on their website asking for answers → Said the student was hungover everyday without evidence bc they had no good faith and grounds to make that statement.

Absolute privilege

A privilege that always applies and makes them not liable even if its false.

When does absolute privilege exist?

1. In court

2. In Congress

3. Between Spouses

Absolute Privilege in court?

People who are providing evidence, testifying, submitting documents in court cannot be held for defamation to protect the legal system to encourage the truth.

Perjury

Lying under oath which is a federal crime

Who has Absolute Privilege in Congress?

A member of congress or witness to congressional hearings have absolute privilege to the statements to make on the floor → When they step outside the room they can be sued.

The Case of the CEO’s Lying Husband

A CEO was looking to hire a new CFO. She identified the top candidate, but before making the offer, she mentioned the candidate to her husband. It turns out, her husband always hated the candidate, so he told the CEO several lies about the candidate to prevent him from getting the job. It worked.

A. If the candidate can prove all this, is Husband liable for defamation?

No the husband is not liable because he has an absolute privilege to his spouse and cannot be sued.

The Case of the CEO’s Lying Husband

A CEO was looking to hire a new CFO. She identified the top candidate, but before making the offer, she mentioned the candidate to her husband. It turns out, her husband always hated the candidate, so he told the CEO several lies about the candidate to prevent him from getting the job. It worked.

B. Suppose instead the next day the CEO told the search committee, “My husband told me…”. Candidate then sued CEO for defamation. Can she claim an absolute privilege?

No, because it isnt in between her and her spouse anymore.

The Case of the CEO’s Lying Husband

A CEO was looking to hire a new CFO. She identified the top candidate, but before making the offer, she mentioned the candidate to her husband. It turns out, her husband always hated the candidate, so he told the CEO several lies about the candidate to prevent him from getting the job. It worked.

C. Can CEO use the “truth” defense?

No she can’t use the truth defense as she repeats it herself making her liable as it as if she said it herself and she is responsible.

The Case of the CEO’s Lying Husband

A CEO was looking to hire a new CFO. She identified the top candidate, but before making the offer, she mentioned the candidate to her husband. It turns out, her husband always hated the candidate, so he told the CEO several lies about the candidate to prevent him from getting the job. It worked.

D. What would be CEO’s best defense?

Her best defense would be to say she had conditional privileges as the committee is a third party and it is in their legitimate interests because they are looking to hire people → Had good faith because she thought it was true.

Why is it often a bad idea to sue for defamation, even when you have a strong case?

Because defamation is said to a small group of people and the public will forget about it but if plaintiff sues than it will be in the news until the case is over.

The Case of the Named Martini

Suppose a restaurant names a popular martini after you. You don’t even like martinis, and when you ask them to stop using your name, they refuse. Is this defamation?

No because it hasn’t injured your reputation in any way → Calling the drink after you isn’t a false statement → It is commercial appropriation which is a tort

COMMERCIAL APPROPRIATION

Unauthorized use of a person’s name, likeness, or identity for commercial purposes → It does injure your right to privacy.

The Case of Fez and the False Financials

Fez Corp wants to sell its subsidiary in Morocco. Fez’s CFO prepares financial statements for Potential Buyer and inflates sales, assets, and net income to make the sub look more valuable. Potential Buyer pays too much as a result, and after discovering the true numbers, sues the CFO.

A. What tort did the CFO commit?

Fraud

What are the four elements of fraud

1. Defendant made a false statement of material fact

2. With knowledge it was false → intent to deceive plaintiff

3. Reliance by the plaintiff → believed it was trued and relied on info to pay

4. Injury as result → impacted plaintiff

The Case of Fez and the False Financials

Fez Corp wants to sell its subsidiary in Morocco. Fez’s CFO prepares financial statements for Potential Buyer and inflates sales, assets, and net income to make the sub look more valuable. Potential Buyer pays too much as a result, and after discovering the true numbers, sues the CFO.

B. Suppose the subsidiary had no accounting records, so the CFO prepared financial statements using her best guess at the correct amounts. Is that fraud?

Yes, even thought she was guessing she didn’t have reasonable grounds to know it was correct which makes her liable → she recklessly disregarded the truth.

Scienter

Knowledge used for second element for fraud, you can prove the attempt to deceive either by proving they recklessly disregarded the truth or they knew it was false

The Case of Fez and the False Financials

Fez Corp wants to sell its subsidiary in Morocco. Fez’s CFO prepares financial statements for Potential Buyer and inflates sales, assets, and net income to make the sub look more valuable. Potential Buyer pays too much as a result, and after discovering the true numbers, sues the CFO.

C. What if the numbers were inflated due to the CFO’s careless mistake?

No, negligence is not enough → For scienter to be used the CFO needed to know if it was false or recklessly disregarded.

The Case of Plaintiff Shoes

Defendant Shoe Co. is having a hard time competing against Plaintiff Shoe Co. Its CEO, Donna Defendant, plans to issue a press release announcing that Plaintiff Shoe Co. uses illegal child labor. She asks you whether this is a good strategy. How would you respond?

You have to be able to prove that plaintiff shoe co. is using illegal child labor → no evidence and you’ll be sued for disparagement

Disparagement

Malicious, false statements calculated to hurt the plaintiff’s business.

What are the two ways disparagement differs from defamation?

1. Companies who reputation has been damage while defamation is individuals

2. Always requires malice to be proven → normal people don’t have to prove malice to recover from defamation.

The Case of the Band that Broke Its Contract

Suppose you book Band to perform at your club and you begin promoting the event, but then Competing Club convinces the band to perform there instead. Band breaks its contract with you. Explain who. if anyone, is liable to you.

The band is liable because they breached the contract → the competing club is also liable if they convinced and intentionally with bad motive to break the contract with you.

Wrongful interference with contractual relations (Tampering)

The defendant intentionally and with bad motive causes a third party to break a valid contract with the plaintiff.

The Case of the Competing Coffee Shops

Suppose Starbucks opens across the street from your coffee shop. You hire attractive people to hang out at your shop, and this draws in many customers. You also hire rude and nasty people to hang out at Starbucks so customers will come to your shop instead.

Yes these tactics are tortious because by hiring the nasty people you are diving away people and causing injury to Starbucks.

Wrongful inference with a business relationship

Intentionally and unproperly interfering with the plaintiff business

The Case of the Competing Coffee Shops

Suppose Starbucks opens across the street from your coffee shop. You hire attractive people to hang out at your shop, and this draws in many customers. You also hire rude and nasty people to hang out at Starbucks so customers will come to your shop instead.

B. Suppose you take out ads stating most people prefer your coffee to Starbucks? Is that allowed?

It is allowed if the statements are true and no misleading.

One can claim what they want in advertising and promotion, as long as the claims are not what?

false or misleading → Many countries outside of the U.S you cannot mention competitors because it is unfair competition.

MALICIOUS PROSECUTION

Starting a Criminal case without a good faith basis.

WRONGFUL USE OF CIVIL PROCEEDINGS

Starting a civil case without a good faith basis → You sue someone for something that they wouldn’t be liable for.

The Case of Anna v. McDonald’s

Anna wants a McDonald’s franchise, but McDonald’s keeps saying no. Anna then investigates McDonald’s patents, finds a questionable one, and threatens to sue over the patent unless they give her a franchise.

A. Explain whether such a suit would be Malicious Prosecution.

No because it is not a criminal case as it would fall under as a civil case

The Case of Anna v. McDonald’s

Anna wants a McDonald’s franchise, but McDonald’s keeps saying no. Anna then investigates McDonald’s patents, finds a questionable one, and threatens to sue over the patent unless they give her a franchise.

B. Explain whether such a suit would be Wrongful Use of Civil Proceedings.

No it would be wrongful use of civil proceedings as she has good faith belief that the patent is questionable.

ABUSE OF PROCESS

Start a criminal or civil case, even when a basis exists, for some ulterior motive.

The Case of Anna v. McDonald’s

Anna wants a McDonald’s franchise, but McDonald’s keeps saying no. Anna then investigates McDonald’s patents, finds a questionable one, and threatens to sue over the patent unless they give her a franchise.

C. Is this abuse of process?

Yes it would be abuse of process as she is suing over a patent with reasonable basing but she is suing for an ulterior reason because she is using it to get leverage for the franchise. → It would not be wrongful if she sued McDonalds over them stealing her patent.