Engineering Law Professor Barich - PowerPoint Presentation

Slide1

Engineering Law

Professor Barich

Class 9Slide2

Announcements

Today

Review Quiz 3

Finish Notes for Part 2 of courseQuestions about Exam 2Next class – March 29th – Exam #2 Second half of class

© Joe Barich, 2018.

2Slide3

Summary -1

Torts are wrongs – breach of a civil duty that society says that you owe to another

Negligent Torts

Intentional TortsAssaultBatteryFalse ImprisonmentIntentional Infliction of Emotional DistressMany others© Joe Barich, 2018.3Slide4

Summary -2

Negligence

Conduct that is culpable because it falls short of what a reasonable person would do to protect others from foreseeable risks of harm

Factors for negligence:Duty of CareBreach of the DutyProximate CauseDamages© Joe Barich, 2018.4Slide5

Summary -3

Defenses To Negligence

Assumption of Risk

You knew the risks and agreed to go forwardContributory Negligence - No recovery if D’s own negligence contributed to their injury in any wayComparative NegligenceD can still recover, but damages reduced due to their negligence.© Joe Barich, 2018.5Slide6

Summary - 4

Property Torts

Trespass to Land

Trespass to Chattels (personal property)Conversion – making land a chattel or vice versaReplevin - give it backTrover – pay me for it© Joe Barich, 2018.6Slide7

Fraud as a Tort - 1

We previously studied fraud with regard to contract formation

Makes the contract voidable by non-fraudulent party

Elements of fraud as a tort:Misrepresentation of existing fact Not future fact, not opinionMateriality of factFalsity Speaker's knows or should know of its falsity If Speaker believes it is true, it is not fraudSpeaker’s intent that P act on statement

© Joe Barich, 2018.

7Slide8

Fraud as a Tort - 2

P’s ignorance of falsity

If you know they are lying, it’s not fraud

P’s reliance on the truth of the representationIf they lie about something but it does not persuade you, it’s not fraudP’s right to rely upon itConsequent damages suffered by P © Joe Barich, 2018.

8Slide9

Many kinds of Fraud

Securities Fraud

“Pump and Dump”

Investment Fraud“Ponzi” schemes – MadoffIdentity TheftFalse billingFalse AdvertisingVolkswagen “Defeat Device”© Joe Barich, 2018.

9Slide10

Negligent Misrepresentation

It’s not fraud because you didn’t know it wasn’t true, but you had a duty to determine whether it was true or not and did not fulfill your duty

Existence of a duty

Breach of dutyInjuryDamagesWho has a duty? – usually only persons having special knowledge or skill, like engineers, doctors, lawyers – and then only in the course of their occupation© Joe Barich, 2018.10Slide11

Tortious Interference - 1

Wrongfully

interfering with someone else’s business or contracts

(some interference = OK)The existence of a contractual/business relationship between two parties. Knowledge of that relationship by a third party. Intent of the third party to induce a party to the relationship to breach the relationship. Lack of any privilege on the part of the third party to induce such a breach. The contractual relationship is breached. Damage to the party against whom the breach occurs.

© Joe Barich, 2018.

11Slide12

Tortious Interference – 2

Ex – Competitor knows of your contract with client and successfully persuades your client to break the contract with you.

Can sue client for breach of contract and sue competitor for tortious interference

Does not apply if client just decides not to renew a periodic contractNot just advertising or marketing – normal competition is privileged Not interference if Competitor just offers lower price and client breaches – must make directed effortPled a lot, but rarely awarded© Joe Barich, 2018.

12Slide13

False Advertising - 1

Use of false or improperly misleading statements in advertising

Elements of the tort of false advertising:

False, misleading, or deceptiveReasonable consumers must be confused or misled, or there must be a likelihoodFalse statements must be material Damages (not needed for statute, see below)False advertising started as a tort, but now can be prosecuted by state and/or federal agencies (like the FTC) OR by lawsuit from an aggrieved partyElements can vary between federal and state agencies and federal and state case law

© Joe Barich, 2018.

13Slide14

False Advertising - 2

Did you notice “False,

misleading

, or deceptive”?Higher standard than fraud or misrepresentationMisleading advertising is “false” - even if factually trueWe want to get a square deal for consumersHowever! Many things are not false advertising and often what you think you hear is not really what is being saidOpinion is not false advertising

“You will love our great crunchy taste!”Data must be accurate – “4 out of 5 …”

But can you just keep running surveys/studies until you get one you like?

© Joe Barich, 2018.

14Slide15

Not False Advertising - 3

“Up to 80% effective!” – only need a single instance, others may be as low as 10%?

Unregulated definitions

“Megabyte” = 220 (1,048,576) or 1,000,000?“Chocolate” (definition regulated by FDA) vs “chocolatey”, “chocolate tasting”, or “chocolate snack”Hershey’s asks FDA to change definition of chocolate to include vegetable oil instead of cocoa butter Previously “organic” and “light” FDA - "Light" or "Lite": if 50% or more of the calories are from fat, fat must be reduced by at least 50% per RACC. If less than 50% of calories are from fat, fat must be reduced at least 50% or calories reduced at least 1/3 per RACC - 21

CFR 101.56(b)

© Joe Barich, 2018.

15Slide16

Example – Can you spot the false advertising?

© Joe Barich, 2018.

16Slide17

TWC v. DirectTV

Time Warner Cable sues DirectTV for false advertising – did you catch it?

“You’re just not going to get the best picture without DirectTV.”

TWC says – literally false! HD is the sameDTV says – Mere puffery and we never mention you by nameCourt says – Statement is literally false and there are really only two players in market so TWC has been harmed. Ad can’t be shown.Parties settle© Joe Barich, 2018.17Slide18

© Joe Barich, 2018.

18Slide19

What did you hear?

According to the actor in the ad, has

any

doctor recommended 5-Hour ENERGY?NoAccording to the actor in the ad, has any doctor recommended using an energy supplement?No“Is 5-Hour ENERGY right for you? Ask your doctor. We already asked 3,000.” Implies that they asked if “5-Hour ENERGY was right for you” and 3,000 doctors said “yes”?Review printed portion of ad

© Joe Barich, 2018.

19Slide20

Products Liability - 1

Historically

Caveat Emptor – “Buyer Beware” – purchaser has responsibility for making sure that the good is what they want before they buy it

Why? Reasonable person should be able to tell when good is defectiveBut! Products become more complicated, defects less easily detectableExample – Reasonable person can tell if a broom is defective just by examining it, but not iPhone – how about gun barrel? © Joe Barich, 2018.20Slide21

Products Liability - 2

Trend arises to place more liability on manufacturer to make sure product is good

However! (Historically) Products liability

actions required “privity” – a direct connection between the manufacturer and consumerAddition of distributor destroyed privity because consumer is second buyer and only has connection with another buyer, not manufacturerRecent decades – great expansion of M liabilityNo more privityNo more assumption of good sense of consumer© Joe Barich, 2018.21Slide22

Products Liability - 3

Three general bases for liability over time:

Negligence - Previous legal theory (old)

Warranty - Previous legal theory (old)Strict Liability – Current legal theory (now)NegligenceM has duty to carefully design and produce productOne of the earlier theoriesOften defeated by contributory negligence of user/misuse © Joe Barich, 2018.22Slide23

Products Liability - 4

Warranty

Selling product includes implied warranties

Fitness for specific purposeMerchantability – won’t hurt customersHowever, implied warranties under the UCC really only extended to purchasing merchant, not to consumer© Joe Barich, 2018.23Slide24

Current Law - Strict Liability - 1

(1) One who sells any product in defective condition unreasonably dangerous to consumers is liable for physical harm if:

(a) the seller is engaged in the business of selling such products, and

(b) it is expected to and does reach the consumer in the condition in which it is sold(2) Applies even though (a) seller has exercised all possible care, and (b) user did not buy directly from seller“Fixes” issues with both negligence and warranty theories© Joe Barich, 2018.24Slide25

Strict Liability - 2

States have not implemented uniformly

Law continues to evolve

Relies on jury determination of “unreasonably dangerous”Recall “duty creep” – juries awarding more – “someone was injured, so someone must pay”Jury think: Someone was injured in order for the complaint to be filed, so doesn’t that say that the product was unreasonably dangerous?© Joe Barich, 2018.25Slide26

Defects

Strict Liability requires the product to be “defective”

Failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner

(1) Manufacturing Defects(2) Design Defects(3) Failures to warn/Marketing defects© Joe Barich, 2018.26Slide27

Manufacturing Defect

Product departs from its intended design even though all possible care was exercised in making the product

Even though you are trying your best, some defective products are going to get through quality control

Quality control is a cost issue – checking each product is much more expensive than checking each “batch”There are ALWAYS some defects in large product runsDesign to reduce manufacturing defects Fewer components Controlled sourcingTypically, only a small number of products implicated, not entire run

© Joe Barich, 2018.

27Slide28

Design Defect

Plaintiff shows there was a safer alternative design that:

(1) could have reduced the injury and

(2) was technologically and economically feasible at the timeNot just single product – the entire design is defective (all products produced)Ex. Grimshaw v. Ford - Ford Pinto – gas tank design fails in a crash and causes fire due to lack of $6 part$2.5M comp and $3.5M punitiveM may want to settle rather than risk a court finding that all of the products are defective due to defective design© Joe Barich, 2018.

28Slide29

Failure To Warn

If product is inherently dangerous, then manufacturer has a duty to warn

Recall that we would not have a lawsuit unless someone has been injured – which might make the product look dangerous

Lots of variance state to state, especially with misuse and foreseeability because they are based on jury determinationsSource of those crazy warnings - “Do not place plastic bag over head” Ties in with Misuse (later) – Often a “get out of liability free card” for the specific warnings because they would constitute misuse© Joe Barich, 2018.

29Slide30

Product Liability Defenses - 1

Product Alteration

Consumer messed with it, so manufacturer can’t be held liable

Assumption of RiskConsumer knew risks and took them anywayBest practice to get waiverUnavoidably unsafe productProperly uses “state-of-the-art technology”We can’t make it completely safe, but it is as safe as the state-of-the-art will allowEx. Lawnmowers, ladders© Joe Barich, 2018.

30Slide31

Product Liability Defenses - 2

Standards

Government made the standard and we follow it

May feed into unavoidably unsafe defense“They told us to make it this way.” Plaintiff’s negligenceTypically comparative as opposed to contributory negligenceReduce damage award in proportion to plaintiff’s negligenceMisuse© Joe Barich, 2018.31Slide32

Misuse

What constitutes misuse?

Use of a product in a way not intended or foreseeable by M

Use of product by unforeseen or unintended person (skilled professional vs. non-pro)Using product contrary to warningsRemember – this question will be decided by a jury – and someone has been injuredQuestion – What if QTips packaging reads “not for insertion into ear”?© Joe Barich, 2018.32Slide33

Questions?

Next class –

March 29

th – Exam #2 Second half of class© Joe Barich, 2018.33