978-1285427003 Chapter 4 Lecture Note Part 1

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Suggested Additional Assignments

Evolution of the Common Law

Ask students to summarize the common law principles of the bystander cases in the text and then create

their own bystander examples. First, students should write a two- or three-sentence summary of the law

given in each of these cases: Union Pacific Railway Co. v. Cappier, Carey v. Davis, Osterlind v. Hill,

Tarasoff v. Regents of the University of California, and Parra v. Tarasco. Then students should create their

own modern hypothetical bystander situation and provide brief arguments for and against liability. This

should help them see the gradual evolution of the law, and anticipate future changes in this doctrine.

Research: Legislative Process

Have students find a newspaper article on a bill that is working its way through Congress. They should

report on the bill’s exact status: which house it is in, which committee is responsible for it, who favors and

opposes it, what interests are at stake, and what lobbyists have an interest in it. If the article makes no

mention of lobbyists, which ones would the students expect to be involved? What is their view of the

proposed legislation? Students may want to supplement the text by reading How Our Laws Are Made on

the Library of Congress’ THOMAS website (http://thomas.loc.gov/home/lawsmade.toc.html).

Research: Campaign Finance

Have students research campaign contributions made in a recent U.S. House or Senate campaign.

Campaign finance reports and data are available at the Federal Election Commission website at

http://www.fec.gov/disclosure.shtml. Students can track how much money each candidate received, the

identity of major contributors, which organizations spent money on electioneering communications, and

how much they spent.

Agency Law

Students should write one-paragraph descriptions of three federal or state agency regulatory programs that

affect their lives in some way. For example, a student could discuss airline regulation, food safety

inspection, automobile recalls, and so forth. Students should identify the agency involved, summarize the

regulatory scheme, and briefly explain how those regulations affect them.

Research: Regulated Industries

Ask students to identify what industry they intend to enter upon graduation. For example, banking,

financial planning, accounting, insurance, advertising, etc. Then ask students to research the various

federal and state regulations that apply to that industry and report to the class.

Chapter Overview

Chapter Theme

Law is complex. Law becomes less baffling when we understand the different types of law and how law

is made. This chapter examines Common Law, Statutory Law, and Administrative Law.

Common Law

The common law is judge-made law. It is the sum total of all the cases decided by appellate courts.

Stare Decisis

Stare decisis means “let the decision stand.” Once a court has decided a particular issue, the court

establishes precedent, and the court will generally apply the same rule in similar cases in the future.

A desire for predictability created the doctrine of stare decisis. Yet, there must also be flexibility in the

law. There must be some means to respond to new problems and a changing social climate.

Bystander Cases

The “bystander rule” is an example of the conflict between the need for predictability and for flexibility in

the law.

Historically, the common law rule about a bystander’s obligation was that a bystander had no duty to

assist someone in peril unless the bystander created the danger. Often criticized as harsh and cruel, courts

nonetheless followed this rule under the doctrine of stare decisis. The common law with respect to

bystander cases changed slowly, however, as courts over time found small exceptions to the rule.

Case: Taraso v. Regents of the University of California1

Facts: Prosenjit Poddar killed Tatiana Tarasoff. Tatiana’s parents claimed that two months earlier Poddar

had confided his intention to kill Tatiana to Dr. Lawrence Moore, a psychologist employed by the

University of California at Berkeley. They sued the university, claiming that Dr. Moore should have

warned Tatiana and/or should have arranged for Poddar’s confinement.

Issue: Did Dr. Moore have a duty to Tatiana Tarasoff? If so, did he breach that duty?

Decision: Yes, Dr. Moore had a duty to Tatiana Tarasoff.

Reasoning: Under the common law, one person generally owes no duty to control the conduct of another

or to warn anyone who is in danger. However, courts make an exception when the defendant has a special

relationship to a dangerous person or potential victim. A therapist is someone who has just such a special

relationship with a patient.

Question: After the Tarasoff case, do people generally have a duty to come to the aid of someone in

danger?

Question: What is the exception that this decision creates?

Answer: Once a therapist determines, or should have determined, that a patient poses a serious

Question: Therapists hear patients’ anger all day long. How can a therapist know for sure whether a

patient is serious in making a threat?

Answer: The therapist need not do a perfect job. He must analyze a patient the way a reasonable

Additional Case: Hardingham v. United Counseling Service of Bennington

County, Inc.2

Hardingham was a recovering alcoholic. Defendant United Counseling Service (UCS) gave him a job as

an emergency services counselor. Halpin, UCS’s executive director, learned that Hardingham was again

drinking. Halpin and other UCS employees went to Hardingham’s home, where they found him

inebriated. They saw him attempt to drink from a bottle apparently filled with windshield wiper fluid.

1 17 Cal. 3d 425, 551 P.2d 334, 131 Cal. Rptr. 14 Supreme Court of California, 1976.

2 672 A.2d 480, 1995 Vt. LEXIS 129 Vermont Supreme Court 1995

They took the bottle away and took Hardingham to the local emergency room. Hardingham refused to

take a blood test and the UCS employees neglected to tell the hospital that he had evidently been drinking

wiper fluid. Because Hardingham refused to cooperate with hospital employees, the police took him to a

correctional center. Overnight, Hardingham suffered severe distress and the police returned him to the

hospital. Tests revealed methyl alcohol in his blood, apparently from the wiper fluid. The substance left

Hardingham with permanent injuries, including blindness. He sued UCS and its employees under 12 V.S.

A. §519.

Question: Had his rescuers spent a few moments advising emergency room personnel that

Hardingham had drunk windshield washer fluid, they might have saved him from blindness and other

serious injuries. Why doesn’t the court hold them liable for their failure to perform such a simple act?

Answer: The Vermont Good Samaritan statute3 states that a bystander who provides assistance to one

Additional Case: Pehle v Farm Bureau Life Insurance Company, Inc.4

Facts: When they applied for life insurance from Farm Bureau Life Insurance Company (“Farm Bureau”)

in 1999 Wyoming resident Gary Pehle and his wife, Renna, did not know they were infected with the

Human Immunodeficiency Virus (“HIV”). Farm Bureau collected the initial premium and arranged for the

Pehles to obtain blood tests as part of the application process. Farm Bureau forwarded the blood samples

for analysis to LabOne, an independent laboratory, which reported the Pehle’s HIV-status to the insurance

company. Farm Bureau then rejected the Pehle’s application and advised them that it would disclose the

reason for their rejection to their physician if they desired. The Pehle’s did not follow up to learn the

reason for the rejection.

Two years later Renna Pehle was diagnosed with AIDS. They looked into their medical records and

learned that Farm Bureau had known of their HIV-positive status when it rejected their life insurance

application. The Pehles sued Farm Bureau, LabOne, and LabOne’s medical director, Dr. J. Alexander

Lowden, for negligence, for failing to tell them they were HIV-positive. The District Court found that

Wyoming law recognized no duty running from a life insurance company to its applicants or from a

laboratory hired by the life insurance company to its applicants. The court granted summary judgment in

favor of all three defendants. The Pehles appealed.

Issue: Did Farm Bureau, LabOne, and Dr. Lowden have a duty to notify the Pehles of their HIV-positive

status?

Holding: The Circuit Court of Appeals affirmed the trial court’s grant of summary judgment in favor of

LabOne and Dr. Lowden and reversed its judgment in favor of Farm Bureau. The court concluded “that if

an insurance company, through independent investigation by it or a third party for purposes of

determining policy eligibility, discovers that an applicant is infected with HIV, the company has a duty to

disclose to the applicant information sufficient to cause a reasonable applicant to inquire further.” The

Pehle’s relationship with LabOne and its medical director was attenuated but they had “a good deal of

contact” with Farm Bureau. Wyoming law had not directly addressed this issue, so the court made “an

Erie-guess as to how the Wyoming Supreme Court would rule.”

Farm Bureau argued that there is a legal distinction between a duty arising from misfeasance—acting

wrongfully—and nonfeasance—failing to act. It argued that its failure to notify the Pehles was

nonfeasance and put it in the same position under common law as a rescuer with no duty to help. The

court did not agree for two reasons. First, it believed Farm Bureau’s actions could be characterized as

either misfeasance or nonfeasance so any legal distinction between the two was not useful: “[p]utting

3 12 V.S.A. §519 (requires a bystander to become involved in an emergency).

4 397 F.3d 897, 2005 U.S. App. LEXIS 2051 Tenth Circuit Court of Appeals. 2005.

HIV-positive applicants on notice of their infection could be considered a normal part of testing for

HIV…” Second, “it is not clear whether Wyoming accepts the binary act/omission distinction in tort.”

Whether Farm Bureau had a duty to notify the Pehles of their HIV-status depends on whether the law

implies the existence of a confidential relationship “of trust and confidence:”

By encouraging the Pehles to purchase life insurance through them, Farm Bureau purported to act with

the Pehles’ best interests in mind. In submitting to a procedure for extraction and consenting to an

examination of their blood, the Pehles demonstrated that Farm Bureau had gained their confidence. We do

not think that insurance companies must exist to treat or diagnose HIV in order for a duty to arise that

necessitates that applicants be properly put on notice to inquire further.

Because there was a genuine issue of material fact as to whether Farm Bureau disclosed to the Pehles

“information sufficient to cause a reasonable applicant to inquire further” the trial court incorrectly

granted summary judgment in favor of Farm Bureau.

Question: What is summary judgment?

Answer: A court may enter summary judgment in favor of one party when the parties do not dispute

Question: Why did Farm Bureau distinguish between misfeasance—acting wrongfully—and

nonfeasance—failing to act?

Answer: Farm Bureau characterized its failure to notify the Pehles as nonfeasance and said it was

Question: Did the court agree?

Question: It appears that the Pehles never asked Farm Bureau why it rejected their application. If

they had shown the slightest curiosity about the reason isn’t it likely that they would have learned

then of their HIV-status?

Answer: Perhaps. The court cannot speculate on what might have happened. At trial, the court would

Question: Doesn’t this case create a troubling precedent for life insurance companies? How can they

know which medical conditions uncovered during blood work will impose on the company a duty to

notify the applicant?

Question: But couldn’t a future plaintiff use this case as precedent if an insurance company failed to

notify the plaintiff that it discovered some other serious disease during a blood test?

Answer: A future plaintiff in such a case would undoubtedly rely on this case as precedent but the

Statutory Law

Statutory law consists of statutes passed by legislative bodies. More law is created by statute than by the

courts.

Bills

A bill is a proposed statute. To become law, a bill must be voted on and approved by both houses of

Congress (the House of Representatives and the Senate). Once Congress passes a bill, the bill will be sent

to the President. If the President signs the bill, it becomes law and is then a statute. If the President

opposes the bill, he will veto it, in which case it is not law. Congress can pass the over the President’s veto

with a two-thirds majority in each house

Statutory Interpretation

Courts interpret a statute by using the plain meaning rule; then, if necessary, legislative history and intent;

and finally, if necessary, public policy.

Landmark Case: Griggs v. Duke Power Co.5

Facts: Duke Power used a high school completion requirement and an intelligence test in hiring and

promotion. The result was that fewer minority applicants qualified for jobs at Duke Power. Griggs sued

under Title VII.

Issue: Did Title VII of the 1964 Civil Rights Act require that employment tests be job-related?

Decision: Yes, employment tests must be job-related.

Reasoning: Congress’s goal in enacting Title VII is plain from its language: to achieve equality of

opportunity and remove barriers that have favored whites. An employer may not use any practice,

to job performance, and therefore neither is permissible.

Question: What is the important issue that the Griggs case resolved?

Question: May such a practice violate Title VII?

Question: Why did the court rule as it did?

Answer: The court said that Congress enacted Title VII to achieve equality of employment

Administrative Law

Administrative Law consists of regulations, orders, rules, and decisions promulgated by administrative

agencies in order to perform powers and duties delegated to such agencies.

Agencies exist at the federal, state, and local level. Some federal agencies are part of the executive

branch, while others are independent agencies. The President has much greater control of executive

agencies than of independent agencies.

Rulemaking

Agencies may promulgate legislative rules, which generally have the effect of statutes, or interpretive

rules, which merely interpret existing statutes.

Investigation

Agencies have broad investigatory powers and may use subpoenas and, in some cases, warrantless

searches to obtain information. A subpoena is an order to appear at a particular time and place to provide

evidence.

Adjudication

5 401 U.S. 424, 91 S. Ct. 849, 1971 U.S. LEXIS 134 United States Supreme Court, 1971.

Agencies adjudicate cases, meaning that they hold hearings and decide issues. Adjudication generally

begins with a hearing before an Administrative Law Judge and may involve an appeal to the full agency

or ultimately to federal court.

Ubiquitous Agencies

It is ironic that the effect on our lives of administrative regulations is so pervasive, yet the process by

which administrative agencies create their regulations is rarely before us. What was the last movie or

television drama in which the protagonist delivered an impassioned speech to a regulatory board? Law

and Order: FTC has not made it to the airwaves. One can argue, however, that we experience the work of

administrative agencies more often than other law-making bodies.

Landmark Case: United States v. Biswell6

Facts: Biswell operated a pawnshop and had a license to sell “sporting weapons.” Treasury agents

demanded to inspect Biswell’s locked storeroom without a warrant, claiming that the Gun Control Act of

1968 gave them that right. Under this law, Treasury agents had permission to inspect firearm dealers’

business records, firearms and ammunition during business hours.

Biswell voluntarily opened the storeroom, and the agent found two sawed-off rifles inside. The guns

did not remotely meet the definition of “sporting weapons,” and Biswell was convicted on firearms

charges.

The appellate court found that, because the search violated the Fourth Amendment, the rifles could

not be admitted as evidence. It reversed the conviction, and the government appealed to the Supreme

Court.

Issue: Did the agent’s warrantless search violate the Constitution?

Decision: No, the agent had a right to search the firearm dealer’s premises without a warrant.

Reasoning: The Gun Control Act of 1968 was a valid statute aimed at regulating firearms and preventing

violent crime. As part of this effort, it gave the Treasury agents the right to perform frequent and

unannounced inspections of firearm dealers’ premises. What good is a firearm inspection that is

Warrants protect an individual’s expectation of privacy. Biswell had no justifiable expectation of privacy

Since inspections furthered the Gun Control Act’s important purpose and Biswell could not reasonably

Question: Why should this case be evaluated under the Power of Agencies?

Answer: Both because it is a retail operation, governed by the Treasury, and because it is a firearms

Question: Should a Treasury agent be allowed to conduct a surprise search? Why or why not?

Answer: Yes, to ensure that business owners like Biswell comply with the law. Advance notification

Question: Did the agent’s warrantless search violate the Constitution?

Answer: The court said that the search was reasonable and that Biswell had been informed that this

6 406 U.S. 311, SUPREME COURT OF THE UNITED STATES (1972).

Additional Case: Doe v. Maryland Board of Social Works7

Facts: “Mrs. F” was a licensed social worker in Maryland. One of her clients, “John Doe,” was convicted

of child abuse and sex offenses involving his minor granddaughter. The Board of Social Work Examiners,

an administrative agency, learned that Mrs. F. had likely violated the law by failing to report the abuse.

The agency began an investigation and issued a subpoena duces tecum to Mrs. F., demanding all

treatment records for John Doe and his wife Jane Doe, for the year in which the abuse occurred.

The Does (“Petitioners”) sued, asking the court to quash the subpoena. They claimed that a social

worker-client privilege prohibited disclosure of their records. The intermediate Court of Appeals declared

the subpoena valid. The Does appealed to the state’s highest court.

Issue: Was the subpoena valid?

Holding: Validity of subpoena affirmed. It wrote:

A state statute affords social workers and their clients similar protections that have long been

applicable to other relationships where privacy issues and the need for open communication are of

paramount importance, e.g., marital privilege, attorney—client privilege, psychiatrist/psychologist—

patient privilege, clergyman—communicant privilege, etc. We consider the information contained in

those treatment records to be both confidential and privileged. Therefore, we must examine the

Board’s claim that its subpoena power and obligation to oversee the conduct of the licensed social

workers of this State provides an exception to petitioners’ privilege and confidentiality rights as

provided by law.

The Board’s interests in obtaining Ms. F’s treatment records are clearly compelling. The legislature

established the Board to protect the public by setting and maintaining high professional standards for

social work. As the Court of Special Appeals stated: “To deny the Board access to patient files is to

deny it the ability to carry out its legislative mandate.”

Neither the social worker—client privilege nor any claim concerning petitioners’ constitutional right

to privacy automatically prevents the Board from subpoenaing petitioners’ treatment records. While

the Board is required by law to protect the petitioners’ treatment records from further disclosure, the

Board must be allowed to have access to those treatment records in order to fulfill its statutory

mandate to protect the public by conducting a full investigation and, where appropriate, disciplining

those licensed social workers who are found to be in violation of the [law].

Question: Did the Does move to quash the subpoena only because they sought to block the

investigation?

Question: If those communications were confidential, than why may the Board of Social Work

abrogate the Does’ privilege?

Answer: The Board must balance competing interests. It must balance the policies served by the

Question: What facts support abrogating the privilege in this case?

Answer: Mrs. F, the Does’ social worker, may have violated her legal duty to report Mr. Doe’s abuse

of his minor granddaughter. One responsibility of the Board of Social Work is to investigate whether

General Question: If in reviewing the records, the Board discovered evidence that the Does had

committed other crimes, could the Board act on its knowledge?

7 384 Md.161, 862 A.2d 996 Maryland Court of Appeals, 2004.