The Oyez Project: Economic Activity Issues - Liability, Nongovernmental

Air France v. Saks

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Alitalia-Linee Aeree Italiane, v. Lisi

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American Foreign S. S. Co. v. Matise

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Antoine v. Byers & Anderson, Inc.

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Atherton v. Federal Deposit Insurance Corporation, As Receiver For City Savings, F. S. B.

City Federal Savings Bank (City Federal) lost a significant amount of its clients' money because of negligent investing by employee John Atherton. The client, Resolution Trust Corporation (RTC), sued Atherton under state law for "gross negligence," "simple negligence," and "breach of fiduciary duty." A three-judge District Court held that Atherton could only be sued for gross negligence, because the more lenient "gross negligence" standard for negligent conduct set by federal statutory law annulled stricter standards set by state law. The U.S. Appeals Court for the Third Circuit reversed the decision, and held that federal statutes only ensured a minimum standard of "gross negligence." The stricter state standards still applied.

On appeal to the Supreme Court, the Federal Deposit Insurance Corporation (FDIC), petitioning on behalf of RTC, argued that federal common law should set a uniform standard of negligent conduct for all employees at federally chartered banks. According to FDIC, allowing state statutes to regulate federally chartered banks would contradict the federal charter system's purpose of upholding federal common law. The Supreme Court was asked to decide which law applied to Atherton: state law, federal common law, or federal statutory law.

Atlantic Coast Line R. Co. v. Erie Lackawanna R. Co.

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Baltimore & Ohio R. Co. v. Jackson

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Bangor Punta Operations v. Bangor & A. R. Co.

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Bank One Chicago, N. A. v. Midwest Bank & Trust Co.

The Expedited Funds Availability Act requires banks to make deposited funds available for withdrawal within specified time periods. The act provides for administrative enforcement and civil liability. After a BankOne Chicago customer deposited a check drawn on a Midwest Bank and Trust account, the check was forwarded, but returned unpaid because BankOne's endorsement stamp was illegible. Subsequently, when the check was resubmitted, the account did not have sufficient funds to cover the withdrawal. Bank One then sued Midwest Bank for failing to meet its obligations prescribed by the Board of Governors of the Federal Reserve System (Board) pursuant to the act. The District Court entered summary judgment for BankOne. The Court of Appeals, vacating the lower court's decision, ordered the action dismissed for lack of subject-matter jurisdiction. The appellate court held that the act authorizes original federal-court jurisdiction only when a "person other than [a] depository institution" sues a "depository institution," or when a depositor sues a bank.

Bankers Life & Casualty Co. v. Crenshaw

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Barnhart v. Sigmon Coal Co.

The Coal Industry Retiree Health Benefit Act of 1992 restructured the system for providing private health care benefits to coal industry retirees by merging two previous benefits plans into the United Mine Workers of America Combined Benefit Fund. The fund is financed by annual premiums assessed against signatory coal operators, or those who signed any agreement requiring contributions to the plans that were merged into the Fund. If the signatory is no longer in business, the Act assigns liability for beneficiaries to a defined group of "related persons" based on the Commissioner of Social Security assignments. Shortly after Jericol Mining Co. was formed in 1973 as Irdell Mining, Inc., Irdell purchased the coal mining operating assets of Shackleford Coal Co., which was a signatory to a coal wage agreement while it was in business. Between 1993 and 1997, the Commissioner assigned responsibility for 86 retired miners to Jericol, determining that as a successor in interest to Shackleford, Jericol qualified as a related person. All of these retirees had worked for Shackleford, but none of them had actually worked for Jericol. Jericol filed suit against the Commissioner. The District Court granted Jericol summary judgment, concluding that the Act's classification regime does not provide for the liability of successors of defunct signatory operators. In affirming, the Court of Appeals concluded that Jericol was not a related person to Shackleford and thus could not be held responsible for Shackleford's miners.

Boca Grande Club, Inc. v. Florida Power & Light Company, Inc.

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Braen v. Pfeifer Transportation Co.

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Chan v. Korean Air Lines, Ltd.

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Chandris, Inc. v. Latsis

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Collins v. American Buslines

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Cooper Stevedoring Co. v. Kopke, Inc.

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Crumady v. The J. H. Fisser

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Dennis v. Denver & Rio Grande R. Co.

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Director, Workers' Comp. Progs. v. Rasmussen

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Dixilyn Corp. v. Crescent Co.

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Dooley v. Korean Airlines

In 1983, Korean Air Lines (KAL) Flight KE007, en route from Alaska to South Korea entered the airspace of the former Soviet Union and was shot down. All 269 people on board were killed. Representatives of three of the passengers (petitioners) sued KAL for damages for their decedents' pre-death pain and suffering. While their suit was pending, the U.S. Supreme Court decided Zicherman v. Korean Air Lines Co. In Zicherman, the Court held that the Warsaw Convention permits compensation only for legally cognizable harm and that the Death on the High Seas Act (DOHSA) supplies the applicable U.S. law where an airplane crashes on the high seas. DOHSA allows certain relatives of a decedent to sue for their own pecuniary losses, but does not authorize recovery for the decedent's pre-death pain and suffering. Subsequently, the District Court granted KAL's motion to dismiss petitioners' nonpecuniary damages claims on the ground that DOHSA does not permit recovery for such damages. In affirming, the Court of Appeals rejected the argument that general maritime law provides a survival action for pain and suffering damages.

East River Steamship Corp. v. Transamerica Delaval Inc.

Transamerica Delaval Inc. designed and manufactured propulsion systems for four supertankers. The propulsion systems eventually failed due to design and manufacturing flaws. Only the propulsion systems themselves were damaged - no other part of the ship was damaged, and no one was injured.

East River Steamship and the other companies that had purchased the supertankers sued Transamerica under the negligence and products-liability doctrines of tort law, a branch of law that deals with injuries not covered by contractual agreements. They sought compensation for the cost of repairing the ships as well as for the income they lost while the ships were out of service. The district court, however, granted summary judgment to Transamerica. It held that the injuries were not covered by tort law because only the propulsion systems themselves had been injured, and that the case therefore dealt with the product's warranty rather than tort law. The Third Circuit Court of Appeals heard the case en banc and affirmed the district court's decision.

Eastern Airlines, Inc. v. Floyd

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Edmonds v. Compagnie Generale Transatl.

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Edwards v. Pacific Fruit Express Co.

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Estate Of Cowart v. Nicklas Drilling Co.

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Exxon Co. USA v. Sofec

An Exxon oil tanker, the Houston, broke free from a mooring facility under control of the respondents, Sofec, Inc. Exxon filed a complaint alleging negligence and breach of warranty in federal district court. Sofec, Inc. filed a successful motion to bifurcate the trial. The trial court considered whether the conduct of the ship's captain, Coyne, was the "superceding and sole proximate cause of the loss of the ship" after the ship had broken free of the moorings in order to determine if the tanker would have been lost despite Coyne's actions. The cause of the ship's release from the moorings became a secondary issue. The court found Coyne negligent, which was the primary cause of the Houston's grounding and subsequent loss. The Court of Appeals affirmed the decision. Exxon petitioned the U.S. Supreme Court for certiorari.

Farrey v. Sanderfoot

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Ferri v. Ackerman

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Geier v. American Honda Motor Co.

The Department of Transportation, under the National Traffic and Motor Vehicle Safety Act of 1966 (Act), promulgated Federal Motor Vehicle Safety Standard (FMVSS) 208, which required auto manufacturers to equip some of their 1987 vehicles with passive restraints. To comply with FMVSS 208, Honda installed manual seat belts and a warning light, instead of a driver-side airbag, for the 1987 Honda Accord. Alexis Geier suffered severe head and facial injuries in an accident while driving a 1987 Honda Accord that did not have a driver-side airbag. Geier and her parents sought damages under District of Columbia tort law, claiming that American Honda Motor Company was negligent in not equiping the Accord with a driver's side airbag. The District Court ruled in favor of Honda, finding that Geier's claims were expressly pre-empted by the Act because a jury verdict in Geier's favor "might establish a safety standard that was not identical to Standard 208." In affirming, the Court of Appeals concluded that, because Geier's state tort claims posed an obstacle to the accomplishment of the objectives of FMVSS 208, those claims conflicted with that standard and that the Act consequently pre-empted the lawsuit.

Griffin v. Oceanic Contractors, Inc.

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Gutierrez v. Waterman S. S. Corp.

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Guzman v. Pichirilo

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Harbor Tug and Barge Co. v. Papai

John Papai was injured while painting the housing structure of the tug Pt. Barrow. The Pt. Barrow is operated by Harbor Tug & Barge Co., which hired Papai to do the work, which involved no sailing with the vessel. Papai had been employed by Harbor Tug on twelve previous occasions in the two months before his injury, receiving those jobs through the Inland Boatman's Union hiring hall, which had provided Papai with short term jobs with various vessels for about two years. Most of Papai's jobs were deckhand work, which Papai said involved manning the lines on and off board vessels while they dock or undock. Papai sued Harbor Tug, claiming negligence under the Jones Act, which serves to protect seamen or workers who face regular exposure to the perils of the sea. The District Court granted Harbor Tug summary judgment upon finding that Papai did not enjoy seaman status under the Jones Act. The Court of Appeals reversed and remanded for a trial Papai's seaman status and his corresponding Jones Act claim. The court concluded that the relevant inquiry was not whether Papai had a permanent connection with the vessel, but whether his relationship with a vessel or an identifiable group of vessels was substantial in duration and nature, and found that this required consideration of his employment's total circumstances. Moreover, the court determined that a reasonable jury could conclude that Papai satisfied this test, for if the type of work a maritime worker customarily performs would entitle him to seaman status if performed for a single employer, he should not be deprived of that status simply because the industry operates under a daily assignment, rather than a permanent employment system.

Herb's Welding, Inc. v. Gray

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Herd & Co. v. Krawill Machinery Corp.

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Howlett v. Birkdale Shipping Co., S. A.

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Hughes Aircraft Co. v. United States ex rel. Schumer

In 1989, William J. Schumer filed an action against Hughes Aircraft Co. under the False Claims Act (FCA), specifically under the qui tam provision which allows suits by private parties on behalf of the United States against anyone submitting a false claim to the government. Schumer alleged that Hughes had submitted false claims related to two Air Force radar projects between 1982 and 1984. Hughes moved to dismiss the case claiming that the 1986 amendment to the FCA that Schumer had filed under was not retroactive and that the alleged conduct precluded the suit because the government already had the information on which the suit was based. The motion was dismissed; however, the District Court ruled in favor of Hughes based on the merits of the case. Ultimately, the Court of Appeals rejected Hughes, finding that the FCA should be applied retroactively to suits pre-1986. The appellate court also found that, because no public disclosure of information possessed by the Government had been made, the action was not barred under the 1986 version of the Act.

Italia Soc. v. Ore. Stevedoring Co.

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J. W. Bateson Co. v. Board Of Trustees

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Jersey Shore State Bank v. United States

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Kaiser Aluminum & Chemical Corp. v. Bonjorno

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Kernan v. American Dredging Co.

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Labor Board v. Deena Artware

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Lewis v. Benedict Coal Corp.

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Marine Terminals v. Shipping Co.

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McDermott International, Inc. v. Wilander

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McDermott, Inc. v. Amclyde

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Missouri P. R. Co. v. Elmore & Stahl

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Mitchell v. Trawler Racer, Inc.

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Morrison-Knudsen Constr. Co. v. Director, Owcp

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Norfolk & Western Railway Co. v. Hiles

Railroad cars are connected by couplers consisting of knuckles - clamps that lock with their mates - joined to the ends of drawbars, which are fastened to housing mechanisms on the cars. Cars automatically couple when they come together and one car's open knuckle engages the other car's closed knuckle. The drawbar pivots in its housing, allowing the knuckled end some lateral play to prevent moving cars from derailing on a curved track. As a consequence of this lateral movement, drawbars may remain off-center when cars are uncoupled and must be realigned manually to ensure proper coupling. William J. Hiles injured his back while attempting to realign an off-center drawbar on a car at one of Norfolk & Western Rail Company's yards. Hiles sued in Illinois state court, alleging that Norfolk & Western had violated Section 2 of the federal Safety Appliance Act (SAA), which requires that cars be equipped with "couplers coupling automatically by impact, and capable of being uncoupled, without the necessity of individuals going between the ends of the vehicles." The trial court granted Hiles a directed verdict on liability, and the state appellate court affirmed.

Norfolk Southern Railway Co. v. Kirby

James Kirby hired International Cargo Control (ICC) as a shipping intermediary to arrange a shipment of goods from Australia to Alabama. ICC issued Kirby a bill of lading (a contract that set shipping terms). The bill invoked liability limitations provided by the Carriage of Goods by Sea Act (COGSA). The bill also included a Himalaya Clause, which extended ICC's limitations of liability to companies ICC hired. ICC hired Hamburg Sud to transport the goods. Hamburg Sud issued ICC a bill of lading that also invoked COGSA protections and included a Himalaya Clause. Hamburg Sud carried the goods on a ship to Georgia and subcontracted Norfolk Southern Railroad to transport the goods inland to Alabama.

The train derailed and Kirby sued Norfolk Southern to recover the $1.5 million in damages he claimed the derailment caused his goods. The district court ruled Norfolk Southern could limit its liability to Kirby on the basis of the Himalaya clause in the Hamburg Sud contract. The 11th Circuit Court of Appeals reversed and ruled the Hamburg Sud bill did not limit Norfolk Southern's liability to Kirby because Kirby was not bound by its terms.

O'keeffe v. Smith Associates

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Olympic Airways v. Husain

Abid Hanson was allergic to second-hand smoke. On an Olympic Airways flight, he and his wife, Rubina Husain, sat in non-smoking seats. However, because the seats were close to the smoking section, Mrs. Husain requested she and her husband be moved. Her request was denied twice, even after the smoke began bothering Hanson. Hanson died during the flight. Husain filed suit in California federal district court. She sought damages under Article 17 of the Warsaw Convention, which allows damages recovery for international air travelers for accidents on airplanes. The district court agreed that Hanson's death was an ""accident"" as defined by the convention and awarded Husain $1.4 million. The 9th Circuit Court of Appeals affirmed.

P. C. Pfeiffer Co. v. Ford

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Reed v. The Yaka

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Reves v. Ernst & Young

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Roberts v. Galen of Virginia, Inc.

Wanda Johnson was run over by a truck in May 1992 and was rushed to the Humana Hospital-University of Louisville, Kentucky, now Galen of Virginia, Inc. After about six weeks at Galen, during which time Johnson's health remained in a volatile state, Galen's agents arranged for her transfer to the Crestview Health Care Facility in Indiana. Johnson was transferred to Crestview in July, and upon arrival her condition deteriorated significantly. Johnson was taken to the Midwest Medical Center where she remained for many months and incurred substantial medical expenses as a result of her deterioration. Jane Roberts, Johnson's guardian, then filed a federal action under the Emergency Medical Treatment and Active Labor Act (EMTALA), alleging violations of Section 1395dd(b) of the Act. Section 1395dd of the Act places obligations of screening and stabilization upon hospitals and emergency rooms that receive patients suffering from an "emergency medical condition." The District Court granted summary judgment for Galen on the ground that Roberts had failed to show that "either the medical opinion that Johnson was stable or the decision to authorize her transfer was caused by an improper motive." In affirming, the Court of Appeals held that in order to state a claim in an EMTALA suit alleging a violation of Section 1395dd(b)'s stabilization requirement, a plaintiff must show that the hospital's inappropriate stabilization resulted from an improper motive such as one involving the indigency, race, or sex of the patient.

S. W. Sugar Co. v. River Terminals

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Saratoga Fishing Co. v. J. M. Martinac & Co.

J. M. Martinac & Co. built the fishing vessel M/V Saratoga. Martinac installed a hydraulic system designed by Marco Seattle Inc. in the Saratoga. The initial user, Joseph Madruga, bought the ship new and added extra equipment. Madruga then sold the Saratoga to Saratoga Fishing Co., the subsequent user. Saratoga Fishing used the ship until it caught fire and sank. Saratoga Fishing then filed an admiralty tort suit against Martinac and Marco. Precedent stated that an admiralty tort plaintiff cannot recover damages for the physical damage that a defective product caused to the "product itself," but can recover damages for physical damage that the product caused to "other property." The District Court found that the hydraulic system had been defectively designed and awarded Saratoga Fishing damages, including damages for the loss of the equipment added by Madruga. The Court of Appeals reversed. It held that the added equipment was part of the ship when it was resold to Saratoga Fishing and, therefore, was part of the defective product that itself caused the harm.

Scindia Steam Navigation Co., v. De Los Santos

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Sinkler v. Missouri Pacific R. Co.

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Sosa v. Alvarez-Machain

A U.S. Drug Enforcement Agency (DEA) special agent was kidnapped and murdered by a Mexican drug cartel in 1985. After an investigation, the DEA concluded that Humberto Alvarez-Machain had participated in the murder. A warrant for his arrest was issued by a federal district court. The DEA, however, was unable to convince Mexico to extradite Alvarez-Machain, so they hired several Mexican nationals to capture him and bring him back to the United States. His subsequent trial went all the way to the Supreme Court, which found that the government could try a person who had been forcibly abducted, but that the abduction itself might violate international and provide grounds for a civil suit. When the case went back to the district court for trial, Alvarez-Machain was found not guilty for lack of evidence.

Alvarez-Machain then filed a group of civil suits in federal court against the United States and the Mexican nationals who had captured him under the Federal Tort Claims Act (FTCA), which allows the federal government to be sued on tort claims, and the Alien Tort Statute (ATS), which permits suits against foreign citizens in American courts. The government argued that the FTCA applied only to claims arising from actions that took place in the United States and therefore did not cover Alvarez-Machain's case because the arrest took place in Mexico. Further, the government and the Mexican nationals argued that the ATS gave federal courts jurisdiction to hear tort claims against foreign citizens, but did not allow private individuals to bring those suits.

The federal district court disagreed with the government's contention that the FCTA claim did not apply, finding that plan to capture Alvarez-Machain was developed on U.S. soil and therefore covered. However, the court then ruled that the DEA had acted lawfully when they arrested Alvarez-Machain and was therefore not liable. On the ATS claims, the court rejected the argument that private individuals could not bring suit under the Act. The court found that Jose Francisco Sosa, one of the Mexican nationals who kidnapped Alvarez-Machain, had violated international law and was therefore liable under the ATS.

On appeal, the Ninth Circuit Court of Appeals overturned the district court's FTCA decision, ruling that the DEA could not authorize a citizen's arrest of Alvarez-Machain in another country and was therefore liable. The appeals court did, however, affirm the lower court's finding on the ATS claim, upholding the judgment against Sosa.

Still v. Norfolk & Western R. Co.

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Trans World Airlines, Inc. v. Franklin Mint Corp.

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Transamerican Freight v. Brada Miller

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Union Oil Co. v. The San Jacinto

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United Pilots Assn. v. Halecki

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United States v. Carter

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United States v. Olson

Injured workers sued the United States under the Federal Tort Claims Act (FTCA), alleging that federal mine inspectors' negligence helped cause a mine accident. The FTCA authorized private tort actions against the U.S. when the federal government, if a private person in similar circumstances, would be liable according to the law of the place where the incident occurred. The district court dismissed the suit, holding that the allegations failed to show Arizona law would have imposed liability on a private person in like circumstances. The Ninth Circuit reversed, holding federal mine inspections were a governmental function with no private analogue. In such cases, the Ninth Circuit held, the FTCA waived sovereign immunity if a state or municipal entity would be held liable under the law where the activity occurred.

Usner v. Luckenbach Overseas Corp.

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Vaughan v. Atkinson

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Waldron v. Moore-Mccormack Lines, Inc.

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Washington Metro. Transit Auth. v. Johnson

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Waterman Co. v. Dugan & Mcnamara

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Watkins v. Conway

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