Business Law Day 5

Procedural Logic and Trial Sequence

  • Sequence of Proceedings:

    • Certain aspects of a trial flow in an absolute, logical sequence, while others may not happen at all (e.g., a Temporary Restraining Order is not mandatory).

    • Some events occur within a specific range of time based on the logic of the case.

  • Temporary Restraining Orders (TRO) vs. Preliminary Injunctions:

    • Temporary Restraining Order (TRO): Can happen without notice to the other party because it is short-term, typically lasting only a couple of weeks (approx. 22 weeks).

    • Preliminary Injunction: Designed to lock the "status quo" for the duration of a trial. This requires:

      • Notice to the opposing party.

      • At least some form of hearing.

      • Evidence presented to the judge to persuade them that the step is an absolute necessity.

    • Discovery Prerequisite: A judge generally cannot grant an injunction without some discovery having taken place first.

Discovery Devices and Logic

  • Frequency of Use: Interrogatories are issued first in 99%99\% to 99.9%99.9\% of cases.

  • The Logic of Sequential Discovery:

    1. Interrogatories and Requests to Produce: Used to gather physical evidence or paperwork.

    2. Depositions: It is illogical to depose a witness "out of nowhere." A witness should not talk under oath until the attorney has lined up questions based on the answers from the interrogatories and the production of documents.

Assignment Correction and Academic Standards

  • Quiz Corrections: Due Sunday by 09:0009:00.

  • Correction Requirements: Full points are not awarded for simply copy-pasting the professor's answers. Students must:

    • Describe what they were thinking incorrectly.

    • Explain why they now understand the correct application of the rule.

  • Standard of Work: Students are encouraged to treat their assignments with the gravity of an appellate brief for an appellate board, where the stakes are high.

  • File Format Specifics: Documents must be submitted as Word documents. PDFs and SharePoint links are prohibited because:

    • PDFs are difficult to annotate without specific editors while traveling.

    • SharePoint requires passwords that may not be accessible in remote locations.

Subject Matter Jurisdiction in Federal Court

  • Two Primary Pathways for Federal Subject Matter Jurisdiction:

    1. Federal Question Jurisdiction: Cases involving federal law or the Constitution.

    2. Diversity Jurisdiction: Cases involving parties from different states with a minimum amount in controversy.

  • Terminology: Using this exact shorthand is essential for legal clarity, similar to a surgeon using specific medical terminology.

Overview of Tort Liability Frameworks

  • Intentional Torts: The primary focus is the intent of the parties.

  • Negligence: The primary focus is the breach of duty.

  • Strict Liability: The focus is on the inherent danger of an activity or a defect in a product. Liability is imposed even if every possible step to ensure safety was taken.

Historical Development of Strict Liability

  • Origins: Originally applied to farm animals and domestic pets (e.g., dogs trained to protect property from predators).

  • Expanding to Industrial Activities:

    • Blasting: Dangerous activities in city centers.

    • Crop Dusting: Toxic substances sprayed over fields where people might be walking.

Product Liability: From Custom Craft to Mass Production

  • The Blacksmith Model (Historical):

    • Personal negotiation and a custom contract between the buyer and the maker.

    • Direct relationship regarding specifications (height, width, weight).

    • Privity: Historically, you could only sue someone you were "in privity" (a direct contractual relationship) with.

  • The Amazon/Retail Model (Modern):

    • No personal relationship exists between the consumer and the manufacturer.

    • Amazon is a retailer; the maker produces standardized inventory regardless of specific orders.

    • Modern Legal Rule: Courts have eliminated the requirement of "privity" in most negligence and strict liability cases.

Product Liability Litigation and Defect Types

  • Standard Complaint Counts: A typical lawsuit includes three counts:

    1. Negligence: Breach of duty in design or manufacture.

    2. Strict Liability: Because a defect made the product unreasonably dangerous.

    3. Breach of Warranty: A contractual concept.

  • Three Categories of Defects:

    1. Manufacturing Defect: A mistake in the specific production of one unit (e.g., a safety switch that failed while others worked).

    2. Design Defect: The blueprint itself is flawed, affecting all units (e.g., the General Motors ignition switch).

    3. Warning/Instruction Defect: Failure to provide adequate warnings or instructions for intended use.

Case Study: General Motors (GM) Ignition Switch

  • The Defect: An internal part (a detent) was shorter by a "couple millimeters."

  • The Consequence: The ignition switch would inadvertently move from the "power" position to "off" or "accessory" while the car was at highway speeds.

  • Systemic Failure: The car's sensors would detect the engine was off and shut down power brakes and the electronics required to deploy airbags.

  • Legal Classification: This is a Design Defect that made the product unreasonably dangerous, triggering strict liability.

Uniform Commercial Code (UCC) and Warranties

  • UCC: Adopted by every state to promote uniformity in commercial transactions involving "goods."

  • Merchants: Specific rules apply to those treated as professional sellers.

  • Warranties vs. Limitations: The paper included in a product box labeled "Warranty" is often a disclaimer or limitation of the broader warranties otherwise imposed by the UCC.

  • Express Warranty: Specific claims (e.g., a brochure stating a machine completes 50,00050,000 punches per hour). This is distinct from "puffery" (e.g., "the best machine ever").

Contributory and Comparative Negligence

  • Contributory Negligence (Old Rule): If a plaintiff was even 1%1\% negligent, they were completely barred from recovery.

  • Comparative Negligence (Modern Rule): The jury allocates responsibility by percentage.

    • Pure Comparative Negligence: Plaintiff's award is reduced by their exactly percentage of fault (e.g., a $1,000,000\$1,000,000 verdict reduced to $800,000\$800,000 if the plaintiff is 20%20\% liable).

    • Modified Comparative Negligence: If the plaintiff is more than 50%50\% liable, they recover nothing.

  • The Iron Application Example:

    • Scenario: A user uses a clothing iron on non-flammable decals in a garage; the iron's automatic shut-off fails, burning down a $2,000,000\$2,000,000 house.

    • Argument: The manufacturer is strictly liable for the defective safety switch; the user is negligent for using the product outside its intended instructions. The jury decides the percentage split (e.g., 80/2080/20).

Distribution Chain Liability and Indemnification

  • Chain of Liability: Retailers (e.g., Walmart), manufacturers, and component suppliers are all liable to the consumer.

  • Indemnification Agreements: Businesses manage this risk through contracts. A manufacturer will typically agree to "defend, indemnify, and hold harmless" a retailer like Walmart if a product defect causes a lawsuit.

  • Business Strategies: Managers must understand their role (Private Label, Licensed Technology, or Original Design) to negotiate these liability risks effectively.

Key Tort Concepts for Upcoming Quiz

  • Transferred Intent: Intending to commit one tort against one person but actually committing it against another or committing a different tort (e.g., intending an assault but committing a battery).

  • Consent:

    • Express vs. Implied: Implied consent exists in emergencies (EMT aid) or everyday situations (crowded trains).

    • Mistaken Consent: A reasonable inference that consent was given, even if it wasn't.

  • Assumption of Risk:

    • Express: Signing a waiver.

    • Implied: Taking a known risk inherent in an activity (e.g., skiing a dangerous run). Note: Modern courts often merge implied assumption of risk into comparative negligence.

  • Negligence Per Se: Breaking a specific rule or statute (e.g., blowing a red light) automatically establishes negligence.

  • Eggshell Skull Rule: You take your plaintiff as you find them. If a person has a pre-existing condition (e.g., brittle bone disease) that makes an injury worse, the defendant is liable for the full extent of the damage.

  • Intervening vs. Superseding Cause: An intervening cause happens after the initial act. If it is substantial enough to break the chain of causation, it is a "superseding cause."

  • Res Ipsa Loquitur: "The thing speaks for itself." Used when the instrument of injury was under the defendant's exclusive control and the accident wouldn't happen without negligence (e.g., a machine falling off a truck).

  • Joint and Several Liability: If multiple parties are liable, the plaintiff can collect the full amount from any one defendant (e.g., the "Bill Gates" partner example). That defendant must then seek reimbursement from other partners.

  • Vicarious Liability: An employer (Principal) is liable for the torts of an employee (Agent) if the act occurred within the "course and scope of employment."

  • Negligent Infliction of Emotional Distress: Limited by the Zone of Danger rule.

  • Open and Obvious Danger: Hazards that are so clear (e.g., a sharp knife) that they do not require a specific warning.

Pedagogy: Interleaving

  • Interleaving: Shifting between topics and revisiting them helps reinforce memory.

  • Origin: Studies of baseball players practicing mixed pitches (fastballs, curveballs, changeups) showed better game performance than those who practiced in blocks.

  • Application: Jumping between procedural law, contracts, and torts is designed to improve long-term retention for finals.

Questions & Discussion

  • Question (Student): Regarding corrections, do we note the changes in the document we send back?

  • Answer (Professor): Yes. Describe why you thought incorrectly and why you now understand the correct way. Do not just copy-paste my answers.

  • Question (Student): Can responsibility be allocated to a decal company if they suggested using an iron?

  • Answer (Professor): Yes, potentially. It depends on whether they provided sufficient instructions and warnings (e.g., limiting the iron's application to 9090 seconds).

  • Question (Student): If a football player purposely breaks an ankle after a play is over, is that intentional?

  • Answer (Professor): Yes. If the play is over and someone runs across the field to stomp an ankle, it is an intentional tort. Evidence of mental state is derived from actions.

  • Question (Student): What if you were forced to hit a car to avoid a bicyclist?

  • Answer (Professor): You would claim you acted as a reasonable person. The specific details (like your speed) will determine if you are liable or if 100%100\% of the cause lies with the bicyclist.

  • Question (Student): Does a warning sign at a ski resort change the assumption of risk?

  • Answer (Professor): It depends on the fact pattern. A sign doesn't automatically excuse a cavalierly run operation that leaves booby traps like hidden boulders under new snow.

  • Question (Student): What is the extra credit question on the final?

  • Answer (Professor): "Why does it get darker then?" (Noting that "the earth rotates" is not the full or correct research-based answer).