June 5, 2013

Limiting business owner liability for third party negligence and crimes

By Limiting business owner liability for third party negligence and crimes

Today, PLF filed an amicus brief in the New Mexico Supreme Court defending business owners from ruinous tort liability.  The case, Rodriguez v. Del Sol Shopping Center, arose when Rachel Ruiz drove her pick-up truck to run errands.  Ruiz suffered from a seizure disorder and had been warned by doctors not to drive.  Nonetheless, Ruiz drove into the Del Sol Shopping Center where she suffered a seizure, drove over a six-inch curb, crossed a ten-foot sidewalk, broke through a metal handrail and crashed through the floor-to-ceiling glass wall of a medical clinic.  Three people died and six others were injured.  Ruiz was imprisoned after pleading no contest to vehicular homicide and other charges.

The surviving victims and estates of the decedents sued the shopping center and medical clinic’s owners and management companies.  They alleged that the business owners were negligent because they should have anticipated Ruiz’s criminal driving and protected the victims from it.  The New Mexico trial court and court of appeals dismissed the plaintiff’s arguments, finding that the business owners had no duty to protect the victims from this type of tragically bizarre incident.  Now, the state’s high court is considering whether to affirm the appellate court’s decision.  In its amicus brief, PLF urges the court to do so on the basis of vital public policies.  It also analyzes the issue from the perspective of criminal law, noting the unfairness of forcing businesses to insure their visitors against third party crimes.

Most courts have found businesses not liable to visitors for injuries caused by the errant driving of third parties because such incidents do not fall within the scope of the duty of “ordinary” or “reasonable” care.  Under New Mexico law, business owners must maintain their property “in a reasonably safe condition in view of all the circumstances, including the likelihood of injury to another, the seriousness of the injury, and the burden of avoiding the risk.”  For several reasons, that duty does not include protecting visitors inside businesses from harm caused by errant drivers.  In traditional legal terms, that type of incident is “unforeseeable as a matter of law” and therefore not within the scope of the property owner’s duty.

But the law also considers policy reasons behind expanding or limiting liability. These include the fact that business owners are not insurers of the public safety.  Opening a business does not suddenly make a person liable for the pervasive harms of modern life.  According to the plaintiffs, the business owners here should have erected barriers between the parking lot and the building, sufficient to stop Ruiz’ truck from careening into the medical clinic.  That is no easy task.  As the brief notes, such a barrier would have to stop not only a small car (i.e. a 2,535 pound Mini Cooper), but also a larger car (i.e. a 6,141 pound Chevrolet Suburban).  Moreover, a motorcycle could travel between post-barriers, or right through the front door.  Business owners would have to turn their shops into fortresses to avoid the risk of liability.

Moreover, drivers—not business owners—are in the best position to prevent accidents.  The fact that most state legislatures require drivers to carry insurance underscores that policy.  Tying liability to a particular location, instead of to the person who negligently or criminally drives his car, is  unfair.  Property owners have a duty to take reasonable precautions against foreseeable risks, not irrational precautions against freakish risks.  But saddling them with liability for the effects of errant driving would require them to take economically infeasible and irrational precautions against freakish incidents like that here.  Imposing liability also makes no sense when considering Ruiz’s actions as crimes.  (She was imprisoned after pleading no contest to three counts of vehicular homicide and six counts of great bodily injury by vehicle).  Premises liability is, after all, based on the assumption that because the property owner controls the property, he has superior knowledge of dangerous conditions on his land and is in the best position to remedy them.  But neither is true of the type of random crime that occurred here.  When Ruiz got behind the wheel fo her car, an accident was inevitable—it was just a matter of where it would occur.  It is not logical to tie liability for crimes to their location.

Saddling business owners with this type of liability is also harmful to society.  It stifles entrepreneurship, drives away investors, deprives people of jobs who need them, and drives up the cost of goods and services.  As Nobel Laureate Friedrich Hayek noted, increase liability “will normally raise the cost of production, or, what amounts to the same thing, reduce over-all productivity.”  There simply is no good reason to impose on business owners the economic costs associated with errant driving and criminal activity.  Hopefully the New Mexico Supreme Court will agree.

 

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