I Have an Business Law Assignment # 3

Brief Green

On December 10, 2014, Tamara Green filed a complaint alleging that after having been sexually assaulted by an entertainer, William H. Cosby, Jr. (Defendant), he publicly defamed her in statements made by individuals operating at his discretion and/ or within the scope of their employment. The complaint was later amended to include similar claims by two additional plaintiffs, Therese Serignese and Linda Traitz (collectively, the three are referred to as Plaintiffs). Defendant then filed motions to dismiss Plaintiffs’ amended complaint in its entirety, which Plaintiffs opposed.

In response, Plaintiffs then sought leave to file a second amended complaint and the court granted Plaintiffs’ request. Plaintiffs’ second amended complaint (SAC) supplemented factual allegations with respect to an allegedly defamatory statement directed at Green.

Mastroianni, Judge The two legal theories for establishing fault in this case are: respondeat superior liability and direct liability. Respondeat superior is a “doctrine holding an employer or principal liable for the employee’s or agent’s wrongful acts committed within the scope of the employment or agency.” Under the direct liability theory, Defendant would be held liable on the basis of his own fault for his conduct and involvement regarding the statements.

Respondeat Superior Liability Under the legal theory of respondeat superior, Defendant asserts the SAC does not sufficiently allege his agents possessed the requisite degree of fault necessary to hold Defendant liable for defamation on the basis of respondeat superior. When a third party is harmed by an agent’s conduct, the principal is subject to respondeat superior liability, a form of vicarious liability, if the agent was acting within the scope of work performed for the principal and the principal controlled or had a right to control the manner of the agent’s work. Restatement (Third) of Agency §§ 7.03, 7.07 (2006). In order to proceed on their theory of respondeat superior liability, Plaintiffs’ SAC must include sufficient allegations supporting a finding of fault on the part of those speaking for Defendant—Phillips, Brokaw, and Singer. The SAC states directly and by inference that the individuals who issued the statements were professionals, employed by Defendant for purposes including speaking to the media on his behalf. Given Defendant’s prominence in the entertainment field, the Court infers he surrounded himself with people accomplished in media relations and legal matters. The Court also infers those making Defendant’s public statements had an open line of communication with him as well as some historical perspective on his public relations matters. Based on the facts and inferences, the Court finds it plausible at this point to conclude (1) those agents would have had, at a minimum, some sense of Defendant’s alleged conduct, such that their duty of care would have required them to take steps to determine the truth or falsity of the statements, and (2) the content of their responsive statements demonstrates such reasonable care was not taken. The Court thus accepts all of the Plaintiffs’ well-pled averments

as true and finds respondeat superior liability is sufficiently pled. Defendant asserts that Plaintiff’s do not identify direct liability as a legal theory upon which the defamation claims can be proven. However, the SAC does state Defendant acted “by and through” each of the people who actually gave each statement alleged to be defamatory. The SAC also states that Defendant’s agents gave the statements “at the direction of Defendant.” Additionally, the SAC states Defendant knew the claimed defamatory statements were false at the time they were published. If a principal purposefully directs an agent to perform an action, and that agent performs the action, then the principal is directly responsible for the consequences of the action.

The court is not persuaded by Defendant’s argument that Plaintiffs did not adequately plead direct liability as a named legal theory. Form examination of all the facts in the SAC, it does not take a speculative leap for the court to conclude Defendant would be personally involved in reviewing these types of accusations against him, crafting or approving the responsive statements, and directing the dissemination. The SAC alleges Defendant was an “internationally known” entertainment figure and the people making public statements for him were acting either as attorney or publicist and/or authorized representative or employee. At this stage of the litigation, it would be unreasonable for the Court to view these particular circumstances, responding to very serious accusations of the nature involved here, as not having the direct involvement of Defendant.

Problem Case 9

La Var Johnson was a retail representative for the Wheaton Company, a processor of consumer pack-aged goods like cereals and canned goods. Johnson’s job was to visit grocery stores in his territory to ensure that each store gave adequate shelf space to all Wheaton products sold by the store. Wheaton told Johnson that maintaining good relations with the general man-ager and assistant manager of each store was essential. It was important, Wheaton told him, to accommodate the managers to ensure that Wheaton got the shelf space it wanted in each store. While visiting a store in Springfield, Illinois, Johnson chatted for a few minutes with the man-ager, who got a phone call that his wife was in an auto accident while on her way to pick up the man-ager at the store. While the wife was not seriously injured, Johnson offered to take the manager to the scene of the accident, and the manager accepted. On the way to the accident scene, Johnson negligently ran a red light, resulting in his car being struck by another car. The grocery store manager received a broken leg, arm, and pelvis. Is Wheaton liable for the manager’s injuries under the doctrine of respondeat superior?

Brief CBS

On February 1, 2004, CBS, the television network, presented a live broadcast of the National Football League’s Super Bowl XXXVIII, which included a halftime show produced by MTV Networks. Both CBS and MTV were divisions of Viacom Inc. at the time. Nearly 90 million viewers watched the show, which featured recording artists Janet Jackson and Justin Timberlake. Jack-son and Timberlake performed his popular song “Rock Your Body” as the show’s finale. Their performance involved sexually suggestive choreography with Timberlake seeking to dance with Jackson and she alternating between accepting and rejecting his advances. The performance ended with Timberlake singing, “gonna have you naked by the end of this song,” and simultaneously tearing away part of Jackson’s bustier. CBS had implemented a five-second audio delay to guard against the possibility of indecent language being transmitted on air, but it did not employ similar precautionary technology for video images. As a result, Jackson’s bare right breast was exposed on camera for nine-sixteenths of one second. Jackson’s exposed breast caused a sensation and resulted in a large number of viewer complaints to the Federal Communications Commission. In response, the FCC issued a letter of inquiry asking CBS to provide more information about the broadcast. CBS issued a public statement of apology for the incident. CBS stated that Jackson and Timberlake’s wardrobe stunt was unscripted and unauthorized, claiming CBS had no advance notice of any plan by the performers to deviate from the script. After its review, the FCC determined CBS was liable for a forfeiture penalty of $550,000 on several grounds, including that under the doctrine of respondeat superior, CBS was vicariously liable for the willful actions of its employees, Jackson and Timberlake. CBS asked the Third Circuit Court of Appeals to review the FCC decision.

Scirica, Chief Judge The respondeat superior doctrine provides that “[a]n employer is subject to liability for torts committed by employees while acting within the scope of their employment.” Restatement (Third) of Agency § 2.04 (2006) But even though the respondeat superior doctrine may apply

in this context, it is limited to the conduct of employees acting within the scope of their employment. Determining whether CBS may be liable under respondeat superior first requires selection of the applicable legal standard for differentiating an “employee” from an “independent contractor.” In Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730

(1989), the Court set forth a test for determining who qualifies as an “employee” under the common law:

In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party’s right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; and the tax treatment of the hired party.

While establishing that all of these factors are relevant and that “no one of these factors is determinative,” Reid did not provide guidance on the relative weight, each factor should be assigned when performing a balancing analysis. Accordingly, all of the Reid factors are relevant, and no one factor is decisive, but the weight each factor should be accorded depends on the context of the case. Some factors will have “little or no significance in determining whether a party is an independent contractor or an employee” on the facts of a particular case. In the present case, the FCC erred by failing to consider several important Reid factors when determining whether Jackson and Timberlake were employees of CBS. And rather than balancing those factors it did consider, the Commission focused almost exclusively on CBS’s right of control over the performers.

Only three factors weigh in favor of a determination that Jackson and Timberlake were employees of CBS. First, CBS is in business, which increases the possibility that it would employ people. Second, CBS regularly produces shows for national broadcast in the course of its business. Both factors are relatively insignificant on balance. Third, and most significant to its argument, is the factor the FCC focused on in its orders: CBS’s right to control the manner and means by which Jackson and Timberlake accomplished their Halftime Show performance. As the FCC contends, CBS, through its corporate affiliates, supervised the Halftime Show and retained the right to approve all aspects of the show’s performances. But it is undisputed that CBS’s actual control over the Halftime Show performances did not extend to all aspects of the performers’ work. The performers, not CBS, provided their own choreography and retained substantial latitude to develop the visual performances that would accompany their songs. Similarly, as the FCC notes, CBS personnel reviewed the performers’ selections of set items and wardrobes, but the performers retained discretion to make those choices in the first instance and provided some of their own materials. CBS’s control was extensive but not determinative of employment. Even though a principal’s right to control is an important factor weighing in favor of a determination that an employment relationship existed, it is not dispositive when considered on balance with the rest of the Reid factors. Of the remaining factors, significant on the facts here, all are strongly indicative of Jackson and Timberlake’s independent contractor status. First, it is undisputed that both Jackson and Timberlake were hired for brief, one-time performances during the Halftime Show; CBS could not assign more work to the performers. * Second, Jackson and Timberlake selected and hired their own choreographers, backup dancers, and other assistants without any involvement on the part of CBS. Third, Jackson and Timberlake were compensated by one-time, lump-sum contractual payments and “promotional considerations” rather than by salaries or other similar forms of remittances, without the provision of employee benefits. Fourth, the skill required of a performer hired to sing and dance as the headlining act for the Halftime Show—a performance during a Super Bowl broadcast, as the FCC notes, that attracted nearly 90 million viewers and was the highest-rated show during the 2003-04 television season—is substantial even relative to the job of a general entertainer, which is itself a skilled occupation. Also, weighing heavily in favor of Jackson and Timberlake’s status as independent contractors are CBS’s assertion in its briefs, which the FCC does not refute, that it paid no employment tax. Had the performers been employees rather than independent contractors, federal law would have required CBS to pay such taxes. Finally, there is no evidence that Jackson, Timberlake, or CBS considered their contractual relationships to be those of employer-employee. In Reid, the Court incorporated the Re-statement, describing it as “setting forth a non-exhaustive list of factors relevant to determining whether a hired party is an employee” under the common law of agency. Among the factors not explicitly listed in Reid, but included in the Restatement, is the parties’ understanding of their contractual relationship. See Restatement (Third) of Agency § 7.07 cmt. f (including as an explicit factor in determining employment status “whether the principal and the agent believe that they are creating an employment relationship”). Although the Commission did not inquire into this factor, it should have been a significant consideration in this case. Under the FCC’s rationale, band members contracted to play a one-song set on a talk show or a “one-show-only” televised concert special presumably would be employees of the broadcaster. These performers—who frequently promote their work through brief contractual relationships with media outlets—would be “employees” of dozens of employers every year. Accordingly, it is doubtful that either the performers here or CBS believed their contracts created employment relationships. On balance, the relevant factors here weigh heavily in favor of a determination that Jackson and Timberlake were independent contractors rather than employees of CBS. Accordingly, the doc-trine of respondeat superior does not apply on these facts.