Subscribe Subscribe   Find us on Twitter Follow POL on Twitter  


Deborah LaFetra Archives

Happy Trails

Well, my week of guest-blogging here at Point of Law has come to a close. Thanks once more to Walter Olson and the Manhattan Institute for the opportunity.

Pacific Legal Foundation's Free Enterprise Project does a lot of work in the civil justice area, promoting tort policies that serve the twin goals of tort law - compensation and deterrence - without generating unjustified windfall recoveries. We also focus on freedom of contract issues and the right-to-earn-a-living. Come check us out!

My Pacific Legal Foundation colleague, Tim Sandefur, argued before the Ninth Circuit yesterday in an economic liberty case challenging California's occupational licensing scheme for animal pest control operators who shun pesticides. As he explains

Alan Merrifield doesn't believe in pesticides. He thinks they're dangerous, ineffective and bad for the environment. In any case, he doesn't deal with bugs. He helps people keep common pests like raccoons and birds away from their homes, using only traps, screens and spikes.

Nonetheless, state bureaucrats insist that the 68-year-old Merrifield - who already holds five state pest control licenses - needs another license, called a "Branch 2 License," before he can install spikes on buildings to keep pigeons away. To get such a license, one must spend two years learning how to handle pesticides - pesticides Merrifield doesn't use - and then take a 200-question multiple-choice examination - which does not contain a single question about spikes or pigeons.

It gets worse. The law only applies to people who work on pigeon, mouse or rat problems. In other words, someone who installs spikes on a bridge to keep seagulls from roosting there doesn't need a Branch 2 License. But install the same spikes on the same bridge to keep pigeons away, and you do. The penalties can amount to fines of $1,000 per violation and even jail time.

Read the whole thing here and listen to the oral argument here.

The last post was very long, so this one will be short! There's a theory that to the extent that landowners are liable in tort for preventing crime on their property, they are essentially called upon to perform the functions usually associated with public law enforcement. Law Professor Barbara Glesner Fines wrote an influential law review article in 1992 making this case: Landlords as Cops: Tort, Nuisance & Forfeiture Standards Imposing Liability on Landlords for Crime on the Premises, 42 Case Western Reserve Law Review 679, 773 (1992) (available on Westlaw):

From a societal perspective, shifting responsibility for crime prevention to landlords is neither efficient nor effective . . . . [T]here is a danger of encouraging the "deputization" of the citizenry. Moreover, criminal law enforcement efforts become more hidden, thereby increasing the corresponding opportunity for corruption and discriminatory enforcement and inviting the practice of unrestrained vigilantism.

It is interesting to think about whether this is still a persuasive argument, when highly publicized incidences of prosecutorial misconduct and discriminatory enforcement diminish public regard for government law enforcement efforts and, at the same time, dangers presented by the War on Terror encourage private citizens to be watchful and respond to perceived threats to our safety (e.g., when civilian airline passengers restrain a fellow passenger who is perceived to be a threat).

Taking a short break from premises liability.... I recently filed briefs in three medical monitoring cases where the plaintiffs had no manifestation of physical injury. In the first, Meyer v. Fluor , the plaintiffs were children in Herculaneum, Missouri, who might have been exposed (even in utero) to lead contamination in the water supply. The Missouri Supreme Court decided to treat the request as one of remedy rather than a cause of action and held that medical monitoring is an acceptable potential remedy. In Sinclair v. Merck & Co., now pending in the New Jersey Supreme Court, the plaintiffs took Vioxx and now seek monitoring for "silent" heart attacks that may have occurred without the plaintiffs' knowing about it. Finally, in Lowe v. Philip Morris, pending in the Oregon Supreme Court, the plaintiffs are smokers who want to be monitored for adverse health consequences of smoking.

In researching these cases, I was dismayed, but not astonished, to discover the huge disconnect between the medical approach to monitoring for illness and the plaintiffs' approach. For example, the U.S. Preventive Services Task Force does not recommend using treadmill exercise testing, resting electrocardiograms, or electron beam computerized tomography to screen for heart disease in low-risk adults who do not have any symptoms of heart disease. The Task Force found that while treadmill testing, EKG, and electron-beam computerized tomography could identify persons at higher risk of heart disease, no evidence thus far exists to show that tests to screen adults has the result of improving health outcomes. Furthermore, the Task Force concluded that using these three technologies to screen for heart disease in low-risk adults could cause more harm than good because of the frequency of false-positive and false-negative results.

Potential harms of screening asymptomatic patients for coronary heart disease include unnecessary invasive testing (e.g., coronary angiography) and "labeling" of those who have had false-positive test results. In low-risk asymptomatic populations, most positive ECG test results occur in those who will not have a coronary heart disease event in the next 5 to 10 years. While the yield of screening is low in those at low risk for coronary heart disease, there is a high potential for harm from false-positive tests. The Task Force judged that the benefits of screening people at low risk for coronary heart disease would not outweigh the potential harms.

False-positive tests are common among asymptomatic adults, especially women, and may lead to unnecessary diagnostic testing, over-treatment, and labeling. Another study explains that false-positive results, in addition to causing a patient psychological stress and anxiety, often lead to invasive tests, such as coronary angiography or treatment with unnecessary medications. Although coronary angiography�a test in which a catheter is inserted into the patient and a dye injected�is considered generally safe, complications, such as internal bleeding, stroke, or infection, and even death, can occur. A positive result on exercise tolerance testing may also impel a patient to begin the use of therapies such as aspirin or statins to over-treat persons who would not otherwise require treatment. Meanwhile, false-negative results can mislead those with heart disease and result in delayed treatment. Both false positives and false negatives can be expected to result in psychological stress.

As I explained in Pacific Legal Foundation's brief in the Lowe case, the same concerns exist with regard to using CT scans to monitor for lung cancer. Here, too, the Preventative Task Force recommends against screening for most of the same reasons (e.g., the high incidence and consequences of false-positives and false-negatives). Perhaps most compellingly, the sad fact is that early detection does not improve the patient�s prognosis. Lung cancer kills. Even with modern advances in therapy, the average 5-year survival rates are less than 15% for all those with lung cancer. Five-year survival ranges from 70% for patients with Stage I disease to less than 5% for those with Stage IV disease. Standard medical practice is to refrain from monitoring (and the inherent risks of that monitoring) when the result makes no difference to the ultimate outcome for the patient. The American Cancer Society notes that "no organization recommends routine screening for lung cancer either among the general adult population or in individuals who are at higher risk due to tobacco or occupational exposures."

We'll see how the Oregon and New Jersey courts deal with these inconsistencies. The courts may well decide that the better part of valor is to punt to the states' legislatures, allowing representatives to take testimony from the array of interested parties and then balance the competing public policies.

Pass-Through Costs

In my last post, I mentioned insurance premiums as a potential pass-through cost from landowners to tenants. Landowners will seek to pass other costs on to tenants as well -- particularly the out-of-pocket costs needed to hire security guards. Judicial requirements of additional security always have the greatest impact in low-income, high-crime areas. When a landowner's duty to protect is expanded, there are identifiable societal costs that go along with it.

Since protection costs money, how would a business operating on a small profit margin fulfill its obligation in a high-crime area? If business owners absorb the high cost of protection by raising the price of their goods and services, how will the poor (who most often reside in areas where the incidence of crime is greatest) be able to meet their basic needs given the minimal financial resources available to them? In all practicality, would they not be singled out as the ones to pay for their own police protection? Would it not be more economical for businesses to close their doors and relocate to "safer ground" ? If so, how would indigent members of that community who lack adequate means of transportation be able to obtain needed goods and services? Sigfredo A. Cabrera, Negligence Liability of Landowners and Occupiers for the Criminal Conduct of Another: On a Clear Day in California One Can Foresee Forever, 23 Cal. W. L. Rev. 165, 188 (1987).

Businesses can absorb only a certain amount of additional cost before passing those costs onto the customers they serve. If the goods become too high-priced, they will not sell and the business will close. Or if the business decides that it cannot recoup its costs, then it simply will find another location where the clientele can afford the higher prices. This has a further economically depressing effect on residents of low-income areas who themselves wish to become entrepreneurs but find the entry costs too high. Because these entrepreneurs would hire other residents, the total effect of a business precluded from opening is increased joblessness; fewer available, affordable services; and a neighborhood that remains mired in economically depressed circumstances.


Another cost of landowner liability for third-party criminal acts is insurance. Because the landowners are sued on theories of negligence rather than for an intentional tort, they should be able to obtain insurance coverage for such lawsuits. This does not come cheap, however. According to Liability Consultants, Inc., the average settlement paid by insurance companies on behalf of landlords for crimes like rape and assault in the U.S. is more than $500,000 and the average jury award for cases that actually go to trial is $1.2 million. Landlords required to maintain insurance that adequately covers the risk of million dollar settlements will pass through the cost of that insurance to the tenants through increased rent. Of course, if the tenants cannot afford the increased rent, they will have to look elsewhere for housing, probably having to settle for an even worse neighborhood that has lower rents. The persons most harmed, then, are those on the lower rungs of the economic ladder, a consideration explicitly acknowledged in Miller v. Whitworth, 193 W. Va. 262, 267-68 (1995)) ("a shortage of low-income housing would ensue if landlords in high crime areas were burdened with a duty based merely on known criminal activity in the neighborhood").

Do Company Policies Create a Duty?

In a case now pending before the Kentucky Supreme Court, a licensed driver took a Chevy truck out for a test drive from the Moore Pontiac dealership on a rainy morning. While he was turning a corner, the truck hydroplaned and struck a car, injuring Candria Scott. Mrs. Scott sued the driver, as would be expected, but also sued the dealership on the grounds that it had acted negligently by failing to follow its internal policy that required a salesman to ride along on test drives. In our brief, Pacific Legal Foundation argues that if internal policies, regardless of their purpose or effect, serve as a hook for tort liability, the impact will extend far beyond car dealerships. Most ominously, a holding that internal policies, procedures, practices, rules or guidelines establish a cause of action will deter companies from establishing such policies, a particularly unfortunate result where such policies promote health and safety.

In Killian v. Caza Drilling, Inc., 131 P.3d 975, 978 (Wyo. 2006), a Wyoming Supreme Court decision turned on these policy considerations. In that case, the owner of a laborer's camp had a "no alcohol" policy that was routinely ignored. Two laborers got drunk after their shift and decided to take a drive. The drunk driver subsequently killed a bicyclist who was riding along the highway. The bicyclist's representatives sued, alleging that the "no alcohol" policy created a duty on behalf of the employer and that violation of that policy caused the accident. The court held that the accident was not a foreseeable result of violation of the policy, in large part because the whole point of the laborers' camp was that the workers should not have to drive at all; their needs were provided for on site. Finally, as a matter of policy, the court explained,

We, however, think it more likely that an imposition of a duty under these circumstances would merely result in an employer forgoing adoption of any safety rules to avoid the risk of liability. If it were even possible, let alone practicable, for an employer to monitor and control the conduct of their employees when they are off duty and off premises, the costs incurred to do so would be significant. An employer would be exposed to liability from an undefined, limitless class of potential plaintiffs. The community would suffer because employers would either abandon efforts to create a safer workplace to avoid liability or they would have to absorb the costs to protect themselves by cutting other expenses.

Imposition of a duty in these circumstances would have significant effects on litigation as plaintiffs seek a "deep pockets" defendant. The dockets of the trial courts would face an increase in the amount and complexity of negligence cases. Any safety benefits derived from enforcing the policy would be lost if the risk of liability is greater than the cost of enforcement and employers simply rescind or refuse to implement safety policies. The burden on the employer does not arise from requiring it to enforce its safety policies but from requiring it do so for the benefit of a limitless class of potential plaintiffs. Compared to the negative consequences of imposing a duty under these circumstances, the benefits of doing so are slight.
New Innkeeper Liability Decision

A Point of Law reader alerted me to an interesting premises liability case just decided in Pennsylvania. On Monday, the intermediate appellate court of that state held in Paliometros v. Loyola that a motel that rents rooms to a fraternity for a party is liable if one party-goer sexually assaults another.

Appellants, as innkeepers, knowing that a fraternity party was going to take place where there undoubtedly would be underage drinking going on, owed to Appellee the affirmative duty to exercise reasonable care under the circumstances, and to take precautions by having some supervisory personnel physically present on the premises to monitor both the premises and the conduct occurring upon the same in order to prevent any possible injury to Appellee, as a business invitee on their premises. Consequently, we agree with the trial court's conclusion that Appellants breached their "duty of care under the circumstances and in [their] position as an innkeeper."

The dissent points out that sexual assault is not a reasonably foreseeable result of underage drinking and, moreover, that the assault took place in an unoccupied room rented by the fraternity, where motel employees would not have patrolled. Therefore, the dissent would find no liability because of lack of causation.

Homeward Bound

One of the latest frontiers in asbestos premises liability litigation is called "take-home liability." Say a laborer had a job relining blast furnaces in the 1950s and 1960s, which exposed him to asbestos dust, which got on his clothes. He goes home and his wife or daughter does the laundry, thus exposing herself to the asbestos dust. A few decades later, the wife or daughter develops mesothelioma and sues the laborer's employer on a premises liability theory, arguing that it was foreseeable that she would be exposed to the dust and therefore the employer owed a duty to her. The most recent decision on this issue is Miller v. Ford Motor Co., out of the Michigan Supreme Court, which properly held that because Ford had no special relationship with the daughter and because she never set foot on the premises, Ford did not have a duty to protect her from exposure to asbestos. Pacific Legal Foundation's brief in the case is here. The court was particularly wary of the flood of litigation that would result from a contrary decision, particularly in the context of the already-overwhelming asbestos cases.

Just as recognizing a cause of action based solely on exposure would create a potentially limitless pool of plaintiffs, so too would imposing a duty on a landowner to anybody who comes into contact with somebody who has been on the landowner's property.

Going once.... Going twice.....

In 2001, Jose Gonzales was killed in an accident in his 1993 Ford Explorer equipped with Firestone ATX tires. The Explorer was auctioned in 2000 by Big H Auto Action, who then sold it to Progreso Motors, who sold it Jose Gonzales. Gonzales's widow and children sued the manufacturers of the vehicle and tires, as well as all upstream sellers of the used vehicle, including Big H, alleging that the auction house is liable for strict products liability or negligence in auctioning the vehicle without replacing recalled tires. In writing an amicus brief on behalf of PLF to file in the Texas Supreme Court in this case, I learned all about the wide and wonderful world of remarketing, including used car dealers, pawn shops, and various forms of "thrift" or second-hand stores.

According to Manheim Consulting , more than 23 million used vehicles were wholesaled in the United States in 2005, with nearly 10 million remarketed through auctions, which accounted for 42% of all vehicles wholesaled. Governments conduct public auctions all the time to move seized and abandoned vehicles. Seller liability should not attach to auction houses, which simply provide a service to sellers. Rarely would a vehicle be on the block for more than a minute or two. And because the vast majority of auctions � including Big H � are dealer-to-dealer, there are sophisticated parties on both sides of the transaction, rather than potentially naive consumers. In fact, consumers are the ultimate beneficiaries of free-flowing goods and services, easily available and affordable even to low-income purchasers. Expanding "seller" liability to auctions undermines the public policy that favors greater choice and availability of goods to consumers, particularly poorer consumers who are the primary purchasers of second-hand merchandise.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.