It is not enough that a plaintiff suing for negligence prove that the defendant
caused an injury in fact. The plaintiff also must establish proximate causation.
Proximate cause is, perhaps, more accurately termed legal cause. It represents
the proposition that those engaged in activity are legally liable only
for the foreseeable risk that they cause.
Defining proximate causation in terms of foreseeable risk creates further
problems about the meaning of the word foreseeable. In its application, foreseeability
has come to mean that the plaintiff must have been one whom
the defendant could reasonably expect to be injured by a negligent act. For
example, it is reasonable to expect, thus foreseeable, that a collapsing hotel
walkway should injure those on or under it. But many courts would rule
as unforeseeable that someone a block away, startled upon hearing the loud
crash of the walkway, should trip and stumble into the path of an oncoming
car. The court would likely dismiss that person’s complaint against the hotel
as failing to show proximate causation.
Another application of proximate cause doctrine requires the injury to be
caused directly by the defendant’s negligence. Causes of injury that intervene
Many states are
the common law of
torts regarding rules
like that of joint and
promised $20 billion
to pay for claims
arising from its oil spill
in the Gulf. To date,
only about a fifth of
that amount has been
paid out by claims
adjusters. Part of the
problem relates to
How do claimants
prove, for instance,
that a falloff in
business miles inland
is directly caused by
the oil spill instead
of poor business
practice, or for some
CHAPTER 10 Torts Affecting Business 307
between the defendant’s negligence and the plaintiff’s injury can destroy the
necessary proximate causation. Some courts, for instance, would hold that it
is not foreseeable that an owner’s negligence in leaving keys in a parked car
should result in an intoxicated thief who steals the car, crashing and injuring
another motorist. These courts would dismiss for lack of proximate cause
a case brought by the motorist against the car’s owner. For one of the most
famous tort cases in history, see Sidebar 10.9 .
Helen Palsgraf stood on the loading platform on the
Long Island Railroad. Thirty feet away, two station
guards were pushing a man onto a departing train
when one guard dislodged an unmarked package
held by the man. The package, which contained fireworks,
fell to the ground with a loud explosion.
The explosion caused a heavy scale to fall on
Helen Palsgraf, injuring her. She sued the railroad
for the negligence of its guard and won at trial and
in the appellate court. Three justices of the Court of
Appeals (New York’s supreme court) agreed with the
lower courts: “The act [of the guard] was negligent.
For its proximate consequences the defendant is
However, four justices of the Court of Appeals
decided that proximate causation was “foreign to
the case before us.” The majority ruled that what the
guard did could not be considered negligence at all
in relation to the plaintiff Palsgraf. The guard owed
no duty to someone 30 feet away not to push a passenger—
even carelessly—onto a train. The Court of
Appeals reversed the damage award to the plaintiff.
The famous Palsgraf case illustrates the complexity
of legal analysis. Question: Was it negligent for the
passenger to carry fireworks in a crowded railroad
station? Why didn’t the plaintiff just recover damages
from the passenger?
Source: Palsgraf v. Long Island R.R., 162 N.E. 99 (1928).
>> sidebar 10.9
Explosion on the Long Island Railroad
14. DEFENSES TO NEGLIGENCE
There are two principal defenses to an allegation of negligence: contributory
negligence and assumption of risk. Both these defenses are affirmative
defenses, which means that the defendant must specifically raise these defenses
to take advantage of them. When properly raised and proved, these defenses
limit or bar the plaintiff’s recovery against the defendant. The defenses are
valid even though the defendant has actually been negligent.
Contributory Negligence As originally applied, the contributory
negligence defense absolutely barred the plaintiff from recovery if the
plaintiff’s own fault contributed to the injury “in any degree, however
slight.” The trend today, however, in the great majority of states is to offset
the harsh rule of contributory negligence with the doctrine of comparative
responsibility (also called comparative negligence and comparative fault ).
Under comparative principles, the plaintiff’s contributory negligence does
not bar recovery. It merely compares the plaintiff’s fault with the defendant’s
and reduces the damage award proportionally. For example, a jury
determined damages at $3.1 million for an Atlanta plaintiff who was run
over and dragged by a bus. But the jury then reduced the damage award
308 PART 3 Legal Foundations for Business
by 20% ($620,000) on the basis that the plaintiff contributed to his own
injury by failing reasonably to look out for his own safety in an area where
buses come and go.
Adoption of the comparative negligence principle seems to lead to more
frequent and larger awards for plaintiffs. This was the conclusion of a study
by the Illinois Insurance Information Service for the year following that state’s
adoption of comparative negligence.
Assumption of Risk If contributory negligence involves failure to use
proper care for one’s own safety, the assumption-of-the-risk defense arises
from the plaintiff’s knowing and willing undertaking of an activity made
dangerous by the negligence of another. When professional hockey first
came to this country, many spectators injured by flying hockey pucks sued
and recovered for negligence. But as time went on and spectators came to
realize that attending a hockey game meant that one might occasionally be
exposed to flying hockey pucks, courts began to allow the defendant owners
of hockey teams to assert that injured spectators had assumed the risk of
injury from a speeding puck. It is important to a successful assumption-ofthe-
risk defense that the assumption was voluntary. Entering a hockey arena
while knowing the risk of flying pucks is a voluntary assumption of the risk.
However, that the injured person has really understood the risk is also significant
to the assumption-of-the-risk defense. In one 2007 case, a University
softball coach smacked his player in the face with a bat while demonstrating
a batting grip to her. She required surgery for multiple fractures of her face
and sued the coach and his employer, the university. The court denied the
assumption-of-the-risk defense, asserting that it was up to the jury to determine
whether the coach had acted negligently in hitting his player. The court
observed that the player did not appreciate the risk of being hit by her coach
with the bat.
Courts have often ruled that people who imperil themselves while attem pting
to rescue their own or others’ property from a risk created by the defendant
have not assumed the risk voluntarily. A plaintiff who is injured while
attempting to save his possessions from a fire negligently caused by the defendant
is not subject to the assumption-of-the-risk defense.
Assumption of the risk may be implied from the circumstances, or it
can arise from an express agreement. Many businesses attempt to relieve
themselves of potential liability by having employees or customers agree
contractually not to sue for negligence, that is, to assume the risk. Some
of these contractual agreements are legally enforceable, but many will be
struck down by the courts as being against public policy, especially where a
business possesses a vastly more powerful bargaining position than does its
employee or customer.
>> Strict Liability in Tort
Strict liability is a catchall phrase for the legal responsibility for injury-causing
behavior that is neither intentional nor negligent. There are various types of
strict liability torts, some of which are more “strict” than others. What ties
of the risk are more
likely to be enforced
if they prominently
bring to attention the
People injured by a
baseball at a baseball
game or a golf ball
on the golf links also
usually assume the
risk. Does someone
assume the risk of a
racing car veering off
a race track and going
over a barrier and into
CHAPTER 10 Torts Affecting Business 309
them together is that they all impose legal liability, regardless of the intent or
fault of the defendant. The next sections discuss these torts and tort doctrines.
15. STRICT PRODUCTS LIABILITY
A major type of strict tort liability is strict products liability, for the commercial
sale of defective products. In most states any retail, wholesale, or
manufacturing seller who sells an unreasonably dangerous defective product
that causes injury to a user of the product is strictly liable. For example, if a
forklift you are using at work malfunctions because of defective brakes and
you run off the edge of the loading dock and are injured, you can sue the
retailer, wholesaler, and manufacturer of the product for strict liability. The
fact that the retailer and wholesaler may have been perfectly careful in selling
the product does not matter. They are strictly liable.
Strict products liability applies only to “commercial” sellers, those who
normally sell products like the one causing injury, or who place them in the
stream of commerce. Included as commercial sellers are the retailer, wholesaler,
and manufacturer of a product, but also included are suppliers of defective
parts and companies that assemble a defective product. Not included as
a commercial seller is your next door neighbor who sells you her defective
lawnmower. The neighbor may be negligent, for instance, if she knew of the
defect that caused you injury and forgot to warn you about it, but she cannot
be held strictly liable.
An important concept in strict products liability is that of “defect.” Strict
liability only applies to the sale of unreasonably dangerous defective products.
There are two kinds of defects. Production defects arise when products
are not manufactured to a manufacturer’s own standards. Defective brakes
on a new car are a good example of a production defect. Another example
involves the clam chowder in which a diner found a condom, which led
in 2005 to a rapid settlement between the diner and a seafood restaurant
chain. Design defects occur when a product is manufactured according to
the manufacturer’s standards, but the product injures a user due to its unsafe
design. Lawsuits based on design defects are common but often very controversial.
Recent such lawsuits have included one against Ford that claimed
Ford should have designed its vans to have a heat-venting system so children
accidentally locked in the vans would be safe. Lack of adequate warnings
concerning inherently dangerous products can also be considered a design
defect. American Home Products settled a wrongful death lawsuit for an estimated
$10 million. The lawsuit alleged that the company had not adequately
warned users of its diet drug about the risks of hypertension, which had been
linked to diet-drug use.
In practice, strict products liability is useful in protecting those who suffer
personal injury or property damage. It does not protect businesses that
have economic losses due to defective products. For instance, a warehouse
that loses profits because its defective forklift will not run cannot recover
those lost profits under strict products liability. The warehouse would have
to sue for breach of contract. However, if the forklift defect causes injury to
a worker, the worker can successfully sue the forklift manufacturer for strict
Don’t forget that
strict products liability
applies only against
In one case, a jury
found the defendant
liable when its
warned users to “vent”
rooms being cleaned
but failed to say “vent
to outside.” Vapors
from the product
injured several people
when it was used in
a room with a closed
310 PART 3 Legal Foundations for Business
Under strict products liability, contributory negligence is not a defense
but assumption of the risk is. The assumption-of-the-risk defense helped
protect tobacco manufacturers from health injury liability for many years.
Misuse is another defense that defendants commonly raise in product liability
cases. Removing safety guards from equipment is a common basis for the
misuse defense. Defendants have also argued that if a product meets some
federally required standard, it cannot be considered defective. Most courts,
however, have ruled that federal standards only set a minimum requirement
for safe design and that meeting federal standards does not automatically
keep a manufacturer from being sued for strict products liability.
In recent years many states have changed or modified the rules of product
liability. See Sidebar 10.10 . These changes to the rules of products liability
(and modifications to the rules of medical malpractice) are often known generally
as “tort reform.” The federal government has also enacted tort reform
that applies to product liability. As of 2005, federal courts can decide any
class-action lawsuit involving over $5 million and involving persons from
different states. Federal plaintiffs in such class-action lawsuits need no longer
claim the usual $75,000 jurisdictional amount.
The rapid growth of products litigation during the past
two decades has brought forth many calls for “tort
reform.” Numerous states have changed their laws
to modify the tort doctrines discussed in this section
and chapter. At the federal level, comprehensive tort
reform has been strongly advocated although it has
not passed as of this writing. Some of the tort reforms
proposed or passed by the states include:
• Permitting only negligence actions against retailers
and wholesalers unless the product manufacturer
• Eliminating strict liability recovery for defective
• Barring products liability claims against sellers if
products have been altered or modified by a user.
• Providing for the presumption of reasonableness
defense in product design cases in which
the product meets the state-of-the-art; that is,
the prevailing industry standards at the time of
• Creating a statute of repose that would specify
a period (such as 25 years) following product
sale after which plaintiffs would lose their rights
to bring suits for product-related injuries.
• Reducing or eliminating punitive damage awards
in most product liability cases.
Importantly, note that not all, or even most, of these
reforms have been adopted by every state.
>> sidebar 10.10
Another important development in products liability is that in nearly
every state product liability case based on design defects, failures to warn
adequately and testing inadequacies are now decided according to “reasonableness”
standards, making these product liability cases based on the negligence.
Consider the following case involving Ford Motor Company’s failure
to test a seatbelt sleeve.