Third-Party Liability? Becker

I agree with Posner that third party liability is desirable in some cases, but that class is narrow. One appropriate case is where a firm makes a device whose only purpose is to steal satellite signals. The firm should be held liable when one of its devices is purchased and used for that illegal, and only, purpose. In addition to the obvious advantages of discouraging the production of goods that have no or few legitimate purposes, there are gains from holding a manufacturer liable rather than having to find and sue the many users of his good. A little more complicated case is whether parents should be held responsible for the harmful acts of their teenage children. Surely, parents should be responsible for a sixteen-year old son who gets into an automobile accident while drunk at 2AM. Parents should be able to exert enough control over their teenage children to prevent them from driving at that hour while drunk. Less apparent is whether parents should be responsible for their son's actions if he gets into an accident while drunk at 8pm while driving a friend's car without his own parents knowing. The son should surely be responsible, but even parents who exercise significant and sensible discipline over their children may not be able to prevent such accidents, although of course they can punish him afterwards. Consider now the case mainly discussed by Posner, of liability by bars for the drunk driving accidents of their patrons after leaving a bar. Accidents due to drunk driving are a very serious problem in many countries, and the United States in particular does not do enough to deter these accidents. Yet I am skeptical whether holding bars, restaurants, or party-givers responsible is the right approach. The rationale behind holding say bar owners liable is that they would then control drinking by patrons who are obviously drunk, and that this would limit the number of automobile accidents by patrons after they have left a bar. I am dubious about this approach because of the difficulty of effectively enforcing such third-party liability. Only a small fraction of patrons of most bars both drink heavily and then drive afterwards. Waiters and other bar employees would have to keep track not only of how many drinks patrons have had, but also of how drunk they are, and whether they would be driving afterwards. I do not see how many bars could ever hope to have accurate information about all three stages involved in producing drunk drivers, especially whether patrons would be driving afterwards, particularly when they do not know their patrons well. To be sure, if they were liable, bars might have rules that no patron may have more than I or 2 drinks, which would be the limit in most states before most drinkers would fail the usual sobriety tests. The problem with such a rule is that it does not focus on the behavior of patrons who are potential drunk drivers. It punishes patrons who want to drink more than that and have no intention of driving while under the influence. Moreover, such a rule is ineffective against patrons who go from bar to bar and only have one or two drinks at each one. It is also ineffective against patrons who drink at home first and then add a few drinks at a bar or restaurant. The same considerations apply if bars get insurance to cover these liabilities, and then raise the cost of drinking to everyone to cover the additional costs. It could be claimed that while holding bars liable would not work perfectly, such third-party liability would cut down on the number of drunk drivers. It probably would, but would the effect be large, and how much costly and inefficient litigation would be stimulated against bars and others held liable who are not in any important way responsible for the drunk driving of persons who been at their establishments? Why not also hold friends liable who did not stop a drunk driver from drinking so much, or did not force him to take a taxi home? The ultimate question is whether the general and specific harms from imposing liability on bars to innocent patrons, friends, and others exceed the gain from cutting down drunk driving? I believe it does, especially because better approaches are available. A far more effective way for states to deter drunk driving is to target drunk drivers more closely and punish them more severely. Posner is doubtful that people who drink heavily and become a menace to others make rational decisions. Yet Scandinavian countries have found that imposing severe punishments on drunk driving, including roadblocks to detect drunk drivers before they get into accidents, has induced heavy drinkers generally to avoid driving. When individuals in these countries go out to party, they either designate someone in their group to drive without drinking, or they take public transportation to get home. Such policies may not work as well in other countries, but certainly much more can be done in the United States to discourage drunk driving. I believe that the evidence cited by Posner on the substantial decline during the past 25 years in the fraction of fatal accidents in the United States that involve drunk drivers in a significant way is in fact due to tougher policies toward drunk drivers themselves. Still, the punishments are generally not yet tough enough. I began thinking about third-party liability after the recent Chicago marathon race on a day that was unusually hot and humid. About 10,000 registered runners did not show up, presumably mainly because they knew how uncomfortable and possibly dangerous running on that day would be. The organizers added more water and medical facilities than usual in recognition of the toll running under such conditions would take. After about some 17 miles they also stopped the race for about 10,000 of the slowest runners. Nevertheless, several hundred runners had to be hospitalized, and many others became severely dehydrated. I am confident that some of those who became ill will bring lawsuits against the organizers for allowing the race to proceed, and/or for not supplying enough water and medical help. This would be a kind of third party liability by the organizers for the harm done by runners to themselves. Surely, however, the runners could know as easily as organizers what the weather would be, and know better than the organizers about their physical condition, their tendency to dehydrate, and other relevant considerations. For these reasons, individuals themselves should be responsible for whether it is wise to run under these conditions. "Third-party" liability in this case would be a mistake, and in the litigation atmosphere in the US, it is likely that some of the lawsuits could result in judgments against the marathon organizers or sponsors.

Comments

[Raul]

Are the organizers of something like the Chicago marathon a "third-party"? This may not be so clear. If the participants paid a registration fee then they might have a reasonable expectation of sufficient water-stations etc. along the way. Shouldn't the liability here be more stringent than that for a usual "third-party"?

[Jack]

It's tough to oppose the case both Becker and Posner make against dram shop laws or social host liability, still, I suspect these laws do help to lower the highway carnage that is still our worst "terrorist". Bars are more likely to cut off patrons who appear to be inebriated, and the next bar, not wanting to incur the liability, should refuse to serve those staggering in the door. Surely at private parties the current laws provide more incentive for "friends not to let friends drive drunk" and better arguments for intervening.

Perhaps tech and a few changes could help us avoid the "Scandinavian solution" which includes something like a .02 or less than one drink standard for "drunk driving". One improvement could be that of installing breathalysers at all places serving alcohol. It would then be a legitimate question for the dram shop defense to inquire as to whether the "drunk" availed himself of the free testing service prior to heading out. Ha! though I suppose that leaves the door open for reply of already being too drunk to have the judgment to use or abide by the machine's warnings.

How about a fun model for parties where the clown's nose turns red and gong or police siren? signals a do not drive condition?

Many other countries have far better public transportation. Here, in most of our cities cab companies enjoy something of a monopoly that keeps prices high and cabs artificially scarce and service low. As energy prices soar it would seem that the addition of semi-scheduled vans or even limos built for the purpose could roam a general area and be summoned for pick-up by a system of cellphone text messages, cost less, would save fuel and lower air pollution and give commuters and revelers a more affordable option.

Lastly, most cities limit the number of full dispensary licenses. At one time, I suppose, to limit the number of bars, that in theory limited drinking, or prevented such intense competition that may have caused some small bars to turn to vice to make ends meet. The results are pricey licenses and another protective monopoly that creates huge operations dependent on pushing a lot of drinks to be profitable and pay off the license and costly building.

Often the only person to see the customer in these huge operations may be a "server" whose wage is basically tips per drink and may have been hired yesterday and gone the next day. Perhaps reviewing these laws and creating a base for more community serving pubs of the Cheers variety would be helpful in more ways than one.

[Raul]

How about addressing the problem at the point where irresponsible behavior is imminent? Mandatory alcohol sensors / immobilizers installed in vehicles?

This solution would address several of the points raised by Prof. Becker: (1) It does not penalize patrons who want to get drunk but with no intention to drive (2) People cannot circumvent safeguards by "bar-hopping" (3) Does not impose externalities via higher cost of drinks on other patrons passed on by bar owners to offset higher insurance costs etc. (4) As pointed out by “Jack” there is an immediate incentive problem in asking servers to curtail drinking in a blanket manner when doing this would , in fact, hurt their revenues.

Of course, one would probably need laws that make it illegal to tamper with the "engine-locks" but similar legislation against odometer-tampering etc. does exist.

One valid criticism of a automobile centric approach would be based on how realistic / reliable such immobilization technology is today. But let’s assume it can be done, albeit at an economic cost imposed on car manufacturers. I wonder, what are the other economic / public-policy implications of such an alternative. Would it be fair to pass on the extra cost of the devices to millions of other car-owners , most of whom do not intend to drive drunk at all?

[tim]

Rau- I believe several states have such laws for repeat offenders. See the following NYTimes articles

http://query.nytimes.com/gst/fullpage.html?res=9F03E6DF1631F931A15751C1A960958260

[Asher Meir]

I disagree about the marathon. Marathon organizers have much better information than the runners. Only they can evaluate the conditions all over the course; they probably also know far more about danger of dehydration etc. than the average weekend runner. Conditions in Chicago were hot for Chicago, but many marathons are held in similar weather without special problems. Even now it is not clear why so many injuries occurred. ONLY the organizers could know that there was an emergency situation. I think there would have been reasonable grounds for liability if the race had not been stopped. (I don't see grounds for liability given that action was taken promptly.)

[v]

I agree with Raul, I think if there was a culture for breathalysers installed on cars--just like people are comfortable with GPS navigators, backup cameras, and car alarms--then it's not a big deal and nobody gets embarrassed. For example, people who opt to install the device can get discounts on car insurance. Or local sheriff's department could sell discounted devices. Though there was that movie where the drunk lady asked her sober date to blow into the device for her...in that case the friend SHOULD be liable...

[Raul]

Following up on "v"'s comment:
I think most such prototype "engine-locks" have a feature that prevents tampering of the sort shown in the movie "v" mentions: They force you to blow samples into the breathalyser at periodic but random intervals. If you don't respond, or you blow above the alcohol limits the protection mechanism kicks in and the car is safely immobilzed again. So unless the "sober date" were to accompany all along(hardly any point in that!) he couldn't outwit the device!

[chabba]

I am Hungarian and I have not been in the US, so I do not know your special social circumstances about drunk driving.

However, I agree with the writer about the application of tough punishments on the basis of the Czech example.

As you may be aware, the life standard in Middle-Europe is a lot lower than in the US. Therefore, cars are not just instruments of moving but a sign of wealth, too. In other words, cars are "the precious" for their owners.

In case of drunk-driving, the car is the instrument with which the punishable act is committed. So let's confiscate the car from (seriously) drunk drivers. The results are the followings: the drunk driver lose its "precious utensil"; therefore, it was a very expensive experience for him - next time he will reconsider the options before drunk-driving. On the other hand, the driver is made unable to commit drunk-driving again.

Naturally, cars are more affordable in the US than in Middle-Europe; therefore, we cannot count on the "precious" effect, as a US citizen can buy a new (or a second hand) car very easily. Despite this, I think that after the confiscation of - let's say - the fifth car from the same person, even that person will lose his financial eventualities to buy a car again within a certain period of time. And in that period of time, there is one (potential) wrong-doer less at the wheel. If the confiscation is combined with other punishments, we can arrive to an effective deterrence which has preventive effect, as well.

Finally, sorry for the bad English. I hope you will understand me :) And if you think that the confiscation is not applicable in the US for any reasons, please do not hesitate to argue.

[Nabr]

"chabba", in my opinion, the punishment ought be proportionate to the crime committed. Yes, confiscation could be valid if the drunk driver caused death or serious injury. But is it justified as a preventive measure?

I would expect most people to consider the punishment you suggest far too severe for the particular infraction. Besides, it puts us on a slippery slope: Red-light-running causes significant fatalities; would you consider that as a suitable offense for confiscation too? How about "failure-to-yield"? Where do we draw the line? Perhaps someone has an idea for an economic analysis that enables us to draw the line….?

[Jack]

Chabba: You've stumbled onto quite a complex area as "civil" seizures and forfeitures run counter to several of our Constitutional amendments (due process among them) and were used only in the case of great risk of flight such as customs violations by ships of foreign flag etc.

However the anti-Constitutional cat was let out of the bag when Nixon's "law and order" campaign implemented the RICCO statutes to get "drug kingpins" and seize the money that may have indeed sloshed across borders. Since, a number of cities and states have expanded the "powers" (which do not exist) to forfeit cars of drunken drivers, and most recently in my town, the cars of "scofflaws" who have failed to pay their traffic tickets.

The resulting bastardization of the original RICCO intent has caused a host of nasty problems including such as seizing and forfeiting grandma's home due to grandson selling a small amount of drugs off the porch steps, along with the seizure of other assets in which the down payment may have been traced to "tainted" money. (Banks and other commercial operations are never asked to give up such tainted funds; it's only private individuals.)

One poster mentions the traditional American custom of tailoring the penalty to the crime that is done AFTER trial and by a judge knowing all of the details. Civil seizure follows no such protocol and for the same violation may seize the fully owned Mercedes, the Mercedes with more debt than value, or as in a case that went to the SC, the $500 car of husband and wife joint ownership after a seizure was triggered by his soliciting a prostitute in Michigan where some idiot has made such an act reason for seizure.

No....... in most states the penalties for DUI are severe enough and should remain under our normal court process. The trouble is that with clouded judgment the inebriate "thinks" he's fine or won't get caught, or in an accident. A frustratingly difficult problem as we see here.

Your English is fine, and welcome! many Hungarians have made great contributions to the US.

[Raul]

Jack: thanks for that well reasoned post. What was NOT clear to me is this: All those examples of [inappropriate] civil seizures that you mention seem patently anti-constitutional. Are those statutes still legally valid? I mean, have they been debated upon as a point of law and deemed constitutionally valid by higher courts. Or is this a body of law passed hastily by misguided councilmen and just waiting for a constitutional challenge? Perhaps, someone versed in this body of law could throw more light?

[Jack]

Raul: Thanks. I guess the answer is that it's something of a mess. Some of the RICCO stuff has gone up but returned with mixed decisions. The case of the shared $500 car came down with Ginsberg casting the 5th vote to uphold the seizure on the VERY curious justification based upon the low value of the seized car, despite it being the first family grocery wagon the family ever had.

Yeah, lots of the municipality seizure statutes appear to be hanging by the breach and of course no one wants to be "soft" on DUI's or "scofflaws".

If you're interested in the "law" and problems related, browse FEAR.org (Forfeiture Endangers American Rights) Brenda Grantland has been fighting this stuff for 15 years or more. The whole thing is quite an eye opener for those thinking that seizures and forfeitures are done consistent with due process at the end of a trial.

Interesting case:

United States versus One Star Class Sloop Named Flash II

"Reforms" (nibbling at the margins) have been "debated" in House Judiciary under Chairman John Conyers, then Henry Hyde, now back to Conyers for some 15 years.

[Bob Reingold]

Nothing has been said when the third party is the government. When that is the case, there should be only second party liability,ie the government emmployee who is responsible for the tort. If the government agency were liable, it would be the taxpayers who would be punished; and that in addition to being unjust has no deterrent effect.

[Anonymous]

Studies have found that the most egregious drunk driving offenders are often repeat offenders. Why not have harsh punishments for those who drive while dangerously intoxicated? BTW, studies have found that driving performance doesn't really get worse until BAC reaches 0.15. Notice, this is much higher than the 0.08 that is the legal limit in most states.

I worry about car breathalyzers for two reasons:

1. Groups like MADD will lobby for not being able to drive after having ANY alcohol, not even a glass of wine with dinner. Again, moderate drinking does not equal drunk driving.

2. Breathalyzers are not always accurate. First, if you've had a drink within a half hour of blowing, the breathalyzer will tend to overrestimate your actual BAC. Second, sometimes its just wrong. Like radar guns, they are a crude instrument that can malfunction.

More than anything though, its just plain wrong to hold someone accountable for another competent adult's voluntary behavior. I fail to see any meaningful difference between the Marathon and party hosts who serve alcohol.

[Nabr]

Laws requiring absolute sobriety are uncalled for; low BAC levels do not exert a statistically significant influence on driving abilities anyways. A significant difference between the marathon organizers and party hosts is the fact that the marathon organizers did receive payment in expectation of certain services to be rendered. Of course, lobbying groups such as MADD do carry the risk of demanding irrational legislation.

[无缝管]

Your website, I liked it, it has a collection!

[Bertil]

“they either designate someone in their group to drive without drinking, or they take public transportation to get home.” Advocating for public transportation? I wasn't expecting to come here and be every week impressed by how much of a leftist you are!

I'm joking, naturally but considering the death toll cars have taken over America (see the later issue of the J. Econ. Lit. for figures) you might want to look at the limited rationality of your fellow citizen and the consequences in a free market.

Seizing the car is un-American. Huhum. What about vigilante justice? Or --simply-- having him explain what he did to the local PTA meeting?

[Jack]

Geez: Is the fact of the US being so far behind the civilized nations on public transportation now another "right/left" issue? Even if we allowed the cars to be plastered with cigarette ads and banned any art installations or space for public commentary?

BTW if you aspire towards becoming something of a principled conservative someday, you know, the kind who used to stand up for the Bill of Rights, paying bills timely and all? please, read up on seizure and forfeiture "statutes" (regs?) (edicts?) at your earliest convenience. OK?

[Jack]

Nabr: Current law in many states is far more harsh than forfeiting a car in the case of a fatal accident or a major injury. The wrongful death lawsuit will likely exceed insurance limits and create a judgment. Then, since the debt was incurred by a criminal event it may not be discharged by bankruptcy. A young person may have a judgment for life.

[Jack]

"V" and others: I too was tempted by the techno-solution of a car that does not respond to an inebriated operator but, even if low cost devices could be installed universally there seems to be a lot of problems:

In cold country people depend (perhaps too much) on cars being warm shelter. One too many nips or a false positive on a winter hunt or ski trip could create an emergency situation. Perhaps better the car could start but be locked in Park?

What of other emergencies? A social evening at home and someone needs to be rushed to the hospital etc?

Then, do you set the device tight at .08? or looser so that a still relatively safe driver might use his car in an emergency? Then does the looser setting become a standard? And isn't the whole purpose compromised?

Perhaps we'd get most of the utility out of a sensor if the car operated but the tailights or special lights flash to signal and warn police and others of an impaired driver.

I end up thinking the system is not workable as w/o the blow at random intervals feature it's not a very secure approach and that is too burdensome for all.

What then? Perhaps, if our goal was to prevent 4,000 highway fatalities it's more feasible to lower the overall fatal accident rate by 10% than to try to lower the DUI rate of fatal accidents by 25%

Should those who gave us a fleet of top heavy tip-over rigs bear third party liability?

[Anon]

"Should those who gave us a fleet of top heavy tip-over rigs bear third party liability?"

Lots of people really like their top heavy tip-over rigs, thats why the car companies sell them. The idea of car manufacturers forcing SUVs onto consumers is absurd on its face.

There are real costs to the proliferation of SUVs and pickup trucks as the main vehicle for many people, namely that you are safer if you also buy an SUV or pickup truck. The worst part about this situation is that those who would otherwise prefer cars choose SUVs or pickup trucks for safety reasons. Who is responsible for this? Consumers mostly--or at least the portion of consumers who would buy an SUV or pickup truck regardless of what other people drive.

To say that auto makers should have third party liability for giving consumers what they want (and while not breaking any laws) strikes me as a terrible policy.

[Jack]

Anon: Well, the topic is that of third party liability and in the marathon case several posters thought the organizers should bear responsibility as they would know more about the situation than would the runners. (I didn't quite buy this or put it in the same league as the case of the inebriate being rendered incompetent with the complicity of the third party.)

Ford and others knew that their combo of SUV and tire was on the very ragged edge of being roadworthy. Tire pressure a bit low and you've dangerous instability. Tire pressure too high and the same result in a fairly narrow margin that is unlikely to be maintained over the life of the vehicle.

In addition the whole class of SUV's are hardly as safe as the public has been led to believe, and you bring up a good point; that a form of dreadnaught competition has come about since these monsters do add danger to the drivers of smaller cars.

What happened? after we'd adopt standard bumper heights and a number of other safety features? Well, your pop's station wagon became a "gas hog" under the CAFE standards, was dropped, and rule beater "mini-vans" and SUV's emerged in their place, neither subject to some of the safety standards of passenger vehicles nor the CAFE mileage standards.

Chrysler took advantage of the UV loophole to mfg mini-vans without the mandated high seat backs, even after folks like me wrote to them, (after being rear-ended in the "luxury model" that fortunately did have high backed seats) for eight years, when they were successfully sued by one of their loyal customers who'd routinely traded in his station wagon every few years and was paralyzed for the lack of the high backed seat cira 1992. No "laws" were violated though the salesman expected that the new snubby nosed wagon would have the same safety features of his station wagon.

Well, the subtext of this thread is that of lowering highway deaths and here comes an auto business that puts profits ahead of integrity or concern for the safety of their customers and makes its not so small contribution to death on our highways. I'd not favor restricting the mfg of any of these rigs, after all, some folks need a foot of ground clearance once in a while, but car companies do have the burden of providing safe and roadworthy vehicles.

Anyway, gas prices and finally! the repeal of the juicy 6000 GVW tax break should slow or reverse the bigger is better trend.

[mt]

i question the marginal benefit to society of expanding liability to social hosts. I even question extending it to the bar owner, but a least there I can see that the bar owner has a profit incentive to refill even a drunk's glass and a law that counter-incentivizes him not to do that can make sense. He can hire an employee to monitor his risk at the door and then spread that cost over his other customers.

But for the social host, hosting is an infrequent experience; hosting requires a lot of labor for other purposes than monitoring guests' drinking, such that guests are in as good, if not a better position to monitor another guest's drinking; hosting is generous and thus a social good and should not be burdened with contingent risk, but rather encouraged and applauded; finally, our society has an abundance of other preventative mechancisms and penal sanctions for drunk driving and insurance for losses, so the marginal benefit of one more of the same type, vs. the marginal cost to the poor host who happens to be unlucky enough to be looking the wrong way when an inebriated guest totters out the door, seems very inefficient to me. Ultimately, the much more efficient step to take is the technological one Raul mentioned, designing cars to test for alcohol and not to start when the driver has consumed too much alcohol.

[Tim Ozenne]

Regarding any theory of organizers being held liable for heat-related injuries to runners, organized athletic events routinely require every entrant to sign a comprehensive waiver. So whether the organizer or the participants are in a better position to anticipate harms from heat or any other cause, as a matter of contract the participant has accepted the risk. If courts make the mistake of ignoring the waiver, there will be precious few amateur runs, bikes, swims, triathlons, or community walks to raise funds for breast cancer research.

[Anonymous]

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