Ira S. Bushey & Sons, Inc. v. United States
398 F.2d 167 (1968)
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Rule of Law:
An employer is vicariously liable for the torts of its employee if the employee's conduct is a foreseeable risk that arises out of the circumstances of the employment, even if the conduct was not motivated by a purpose to serve the employer.
Facts:
- The United States Coast Guard vessel, the Tamaroa, was being repaired in a floating drydock owned by Ira S. Bushey & Sons, Inc. (Bushey).
- The government's contract with Bushey provided that Coast Guard personnel would have access to the vessel at all times.
- A Coast Guard seaman, Lane, returned to the drydock late at night after drinking heavily ashore.
- While walking along the drydock wall to board the Tamaroa, Lane turned several wheels which controlled the valves for the drydock's ballast tanks.
- As a result of Lane opening the valves, the drydock became unstable, flooding on one side.
- The Tamaroa listed, slid off its supporting blocks, and fell against the drydock wall, causing significant damage to both the ship and the drydock.
Procedural Posture:
- Ira S. Bushey & Sons, Inc. filed a libel (a lawsuit in admiralty) against the United States in the U.S. District Court for the Eastern District of New York.
- The district court judge found that the claim was not properly in admiralty but should proceed under the Federal Tort Claims Act.
- The district court, applying maritime law principles, entered an interlocutory decree finding the United States liable for the damage, with the amount of compensation to be determined later.
- The United States (appellant) appealed the district court's determination of liability to the U.S. Court of Appeals for the Second Circuit; Bushey is the appellee.
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Issue:
Is an employer vicariously liable for the tortious acts of its employee when the employee's conduct was not actuated by a purpose to serve the employer, but arose from a risk characteristic of the employer's enterprise?
Opinions:
Majority - Friendly, Circuit Judge
Yes. An employer is vicariously liable for the acts of its employee where those acts are a foreseeable risk characteristic of the business enterprise, even without a motive to serve the employer. The court found the traditional 'purpose to serve the master' test for respondeat superior to be too narrow and unrealistic. Instead, the proper test is whether the employee's act was a foreseeable risk arising 'out of and in the course of' the employment. It was foreseeable that crew members, with a known proclivity for drinking, returning to the ship across the drydock might cause some form of damage. The specific act did not need to be foreseeable, but the general risk of harm was. Because Lane's presence on the drydock was a direct result of his employment and the government's insistence on crew access, his conduct created a risk fairly attributable to the government's enterprise.
Analysis:
This decision significantly broadened the scope of vicarious liability by moving away from the employee's subjective motive and toward an objective, enterprise-risk analysis. It established that an employer's liability can extend to an employee's intentional or reckless acts that are not intended to benefit the employer, so long as the acts are a generally foreseeable consequence of the employment situation. This 'characteristic risk' approach holds businesses accountable for the risks inherent in their operations, influencing future cases to consider foreseeability and the connection to the enterprise rather than just the employee's intent. This has profound implications for businesses, especially those whose employees have significant freedom or operate in environments where misconduct can cause substantial harm.
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