Information Law and Policy Blog

Prepared by Ryan Greenberg, Karen Nomorosa, and Nat Wharton

Liability

Cardozo v. True (1977)

Ingrid Cardozo bought a cookbook by Norma True at Ellie’s (a bookstore) and suffered an allergic reaction after following a recipe in a purchased book. The Cardozos brought a breach of warranty suit against Ellie’s under the Uniform Commercial code (UCC). The 2nd District Florida court determined that an implied warranty did exist under the UCC and that it rightfully applied to goods such as books. The court distinguished, however, between the tangible book properties and the thoughts and ideas conveyed by books. The work involved in checking the contents of every book sold would be “unthinkable” and the court ruled that Ellie’s was not liable for its contents. This reasoning was akin to newspaper distributors not being held liable for the defamatory material in newspapers they sell. The court noted that often, not even newspaper publishers are liable for erroneous material from outside press dispatches. The implied warranty was found to cover only physical properties of the book and liability without fault was found to be inappropriate when one passed on words without having an opportunity to review them. The court noted that “ideas hold a privileged position in our society … they are not equivalent to commercial products.”

Aetna v. Jeppesen (1981)

A Bonanza flight crashed near the Las Vegas airport at a time when Aetna insured Bonanza. Aetna paid the wrongful death claims settled by Bonanza, but sued Jeppesen claiming that Jeppesen was liablity for faulty charts used by pilots, and this was the proximate cause of the crash. A district court in Nevada upheld this. The case was turned over to the US Court of Appeals, 9th Circuit, which ruled that Jeppesen was 80% responsible, and Bonanza 20% responsible. All data presented in Jeppesen charts was factually correct, but differences of scale in the presentation may have been misinterpreted. Expert pilots for the defense testified that they wouldn’t have found the information ambiguous, and there were no counter-witnesses for the prosecution. The court decreed that crew negligence needed to be included as part of the equation. The court declared that the comparative fault was calculated inconsistently, and found negligence on the part of the crew. The court reversed the distribution to 20% against Jeppesen (who was strictly liable), and 80% against the crew (who was negligent).

“Liability for Defective Electronic Information”

Samuelson dives into the grey world of software licensing and describes the history of how software has frequently been treated more like a book than like a machine by the courts. Books have been granted greater leeway by the courts because suppressing their content is similar to stopping a spread of ideas. Liability is generally only found if erroneous statements in books defraud or defame or the author claims expertise in a subject and exhibits negligence. Samuelson notes that digital information providers are at higher risk than print providers, and details differences between books and differing types of software media. Samuelson highlights elements of the two cases above and discusses and distinguishes between warranties, negligence, and strict liability in tort:

• Warranties
  • Express or Implied (e.g.: UCC)
  • Damages more limited than in Torts
  • Requires showing product fails to perform as expected.
  • Limited to those who bought the good. (Less generous than Tort)
• Negligence
  • Tort (independent of contract)
  • Pain & Suffering Damage recovery possible
  • Requires showing personal fault
• Strict Liability in Tort
  • Tort (independent of contract)
  • No Fault
  • Must prove physical harm caused by product
  • Does not apply if a service offering.

Response

In Cardozo v. True the “unthinkable” argument makes sense, as it does seem unreasonable to expect a bookstore to be responsible for the content of books they sell. This seems similar to the court expressing that it may be “impossible” to defend a copyrighted work against all infringers in Perfect 10 v. Amazon. The position of the bookseller also is similar in some respects to an ISP that acts as a conduit for packages, but not an inspector of information. In this case, the bookstore would not pass the “server test.”

In Aetna v. Jeppesen some of us found it extreme that, when all expert pilot testimony was to the contrary, the scale of a map was still blamed for 20% of the damage of an airplane crash. It’s important to note a few differences between Cardozo v. True and Aetna v. Jeppesen. First, the court ruled in Cardozo v. True that Ellie’s Books, a distributor, was not liable for harmful information. In Aetna v. Jeppesen, a different court found the creator of somewhat misleading information liable. Second, it seems like there is a reasonable distinction between ideas (how to cook a recipe) and an instrument (charts for landing a plane). Unlike in the Cardoza case where the sold information was irrelevant, here information in chart form is considered a product and the design (the information conveyed by the product) is considered “defective” with regard to its use.

On a side note, Jeppesen is a fascinating case of infographic design. One principle in design is that different things should look different, and two similar-looking charts depicting similar data side-by-side fail this test. Edward Tufte, who argues that poorly presented information contributed to the Challenger explosion, would likely be interested by this case. Also, we found a sample Jeppesen chart (though not the one from this case) so you can see what they look like.

In the Samuelson paper, Samuelson defines some important terms and looks to future areas of concern with respect to software liability. This was the first time we’ve heard mention that software developers might be required to be licensed as in other trades. Her argument that software’s liability can be increased because it can keep people out of a “judgment loop” seems like it should be mitigated by the prevalence of extreme terms of service in the form of clickwrap.

Information Licensing

Mortenson v. Timberline (2000)

Mortensen, a nationwide construction contractor, bought software from software company Timberline. Mortensen used the software to calculate a bid for a contract only to discover that the bid was $1.95M too little. The company wanted to sue Timberline for the damages, but a “shrinkwrap license” included in the software stated that Timberline was liable only up to the cost of the software. Mortensen argued that the shrinkwrap license was not enforceable for the following reasons:

• Mortensen considered their purchase order as the entire contract, because they never saw the licensing agreement. The court considered that the purchase order was not an integrated contract because it lacked many pertinent details.
• Mortensen also argued that the delivery of the licenses was a request to add additional terms which were never agreed upon by the parties. The court affirms Timberline by agreeing that the additions were not material alterations but are part of the contract. This is further strengthened by the fact that the license was available in many different locations such as in the packaging, manuals and welcome screens.
• Mortensen contended that the limitations clause is “unconscionable” — which basically means it is very one-sided. The court maintains that the clause is not substantively unconscionable because it was not “shocking to the conscience”. Procedurally unconscionable, on the other hand, means that the contract was not presented to Mortensen in a meaningful way. The court maintains that this is not so, as shrinkwrap licensing is common practice and Mortensen has been involved in such contracts with Timberline before.

Response

At first glance, it seems somewhat unfair that Timberline knew of bugs or issues in their software but did not send notices to their customers or patches to fix the bug. On thinking about it further, though, being part of a profession that develops software, we know from experience that no matter how robust your quality assurance is, there will always be bugs in the system. The more bugs you find during testing only means that the remaining bugs are harder to find, but still quite possibly something that will come up during actual use. We cannot imagine being completely liable for something like that. The court tries to take this fact into consideration by stating that “the presence of latent defects in the goods cannot render these clauses unconscionable. The need for certainty in risk-allocation is especially compelling where, as here, the goods are experimental and their performance by nature less predictable.”

Mortensen does present an argument that most of us are probably familiar with, that they did not see the actual license terms. We are all likely guilty of just clicking through shrinkwrap licenses without understanding exactly what we are agreeing to. This is probably also due to the fact that licensing agreements normally are written in legalese that we don’t really understand (or find too tedious to read). It would be nice to have a layman’s version of the agreement that we could easily understand, like a version of Creative Commons for software licenses.

Terms of Service

Williams v. AOL (2001)

In the terms of service for the AOL 5.0 software, America Online has a forum selection clause. This is a part of a contract where parties agree where litigation will take place, and in this case America Online specified Virginia. Mark Williams and others filed a lawsuit in Massachusetts alleging that AOL’s software damaged their computers, and AOL asked the court to dismiss the claim because it was not filed in Virginia.

The plaintiffs argued that their computers were damaged before they agreed (or could have agreed) to the terms of service, which made the forum selection clause unenforceable. AOL countered that the plaintiffs were subscribers before version 5.0 and had previously agreed to forum selection. The court decided this was not important, in part because the plaintiffs sought to represent a class of people, including those who might not be AOL subscribers (but who could be harmed by the installer software). The court rejected AOL’s motion to dismiss.

Response

This court decision determined whether Williams and others could file suit in Massachusetts, but the primary point is whether AOL’s contract terms were in effect. It seems important in this ruling that Williams was seeking to file a class action suit because the court discussed other residents who might not have accepted those terms—Williams himself actually had accepted a previous TOS. It is interesting how the seemingly important question at hand (was AOL liable for the damages?) has a less significant impact in the long term than the simple one addressed in this case.

This short case on when and how a person agrees to terms of service does not shed much light on one of our questions from the first assignment, which is whether a person can enter a contract simply by visiting a website. To draw on the language used in ProCD, how little action can be construed as “accepting behavior?” In a brief discussion with Brian Carver, he indicated that there have not been many good cases addressing this issue, but that it is largely believes that users must click a button or have some more active involvement than visiting a website to accept a contract.