Respondeat superior

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Respondeat superior (Latin: "let the master answer"; plural: respondeant superiores) is a doctrine that a party is responsible for (has vicarious liability for) acts of their agents.[1]:794 For example, in the United States, there are circumstances when an employer is liable for acts of employees performed within the course of their employment.[2] This rule is also called the master-servant rule, recognized in both common law and civil law jurisdictions.[3]

In a broader scope, respondeat superior is based upon the concept of vicarious liability.

In common law[edit]

The concept of respondeat superior has its roots in ancient Rome.[4] At the time, the concept applied to slaves, as that was the meaning of what has been translated as servants, and applied where the slave could not pay himself for the act.[5] It was later expanded to apply to not only slaves, but also to the animals and family members of the master of a family.[6]

In 1698 the doctrine was mentioned in dicta by Lord Holt in the English case of Jones v. Hart, 2 Salk 441, 90 Eng. Rep. (K.B. 1698).[6] In the US, it was discussed in the case of Wright v. Wilcox, 19 Wend. 343, 32 Am. Dec. 508 (1838), in which a boy climbed on a wagon driven by defendant's servant, who drove his horses faster, causing the boy to be thrown and injured.[6] The judge ruled that the master was not responsible under respondeat superior, because the servant had acted in a way in driving the horses that the master had not assented to, and therefore it was not within the scope of his employment.[6]

American Justice Oliver Wendell Holmes Jr. opined in 1891 that "It is hard to explain why a master is liable to the extent he is for the negligent acts of one who, at the time, really is his servant, acting within the general scope of his employment. Probably master and servant are 'feigned to be all one person' by a fiction ..."[5] Justice Holmes was of the view that the doctrine was in opposition to common sense.[6] In 1916, British attorney Thomas Baty wrote that the doctrine, which he called a "deep-pocket theory," was "derived from an inconsiderate use of precedents and a blind reliance on the slightest word of an eminent judge, and from the mistaken notion that his flights of imagination ... were actual decided cases..."[6]

When applied to physical torts, an employer-employee relationship must be established (meaning that no vicarious liability is established for work performed as an independent contractor) and the act must be committed within the scope of employment (i.e., substantially within time and geographical limits, job description and at least with partial intent to further employer's business).

Historically, this doctrine was applied in master-servant and employer-employee relationships. When an employee or a servant commits a civil wrong against a third party, the employer or master could be liable for the acts of the servant or employee when those acts are committed within the scope of the relationship. The third party could proceed against the servant and master, that is, the employee and employer. The action against the employee would be based on his conduct. The action against the employer is based on the theory of vicarious liability, wherein a party can be held liable for the acts of a different party.

The employer-employee relationship is the most common area respondeat superior is applied, but the doctrine is also used in the agency relationship. In this relationship, the principal becomes liable for the actions of the agent even if the principal did not commit the act. There are three considerations generally:

  1. Was the act committed within the time and space limits of the agency?
  2. Was the offense incidental to, or of the same general nature as, the responsibilities the agent is authorized to perform?
  3. Was the agent motivated to any degree to benefit the principal by committing the act?

The degree to which these are answered in the affirmative dictates the degree to which the doctrine can be applied.

Common law distinguishes between civil and criminal forms of respondeat superior.

In US securities law[edit]

In U.S. securities law cases in which respondeat superior has been considered, where the company was not a knowing participant in the employee's fraud, the results have been mixed.[7] In O'Brien v. Dean Witter Reynolds (D. Ariz 1984), the court, emphasizing the requirement of knowing participation, stated that an employee's knowledge could not be imputed to the employer.[7] The court in Dakis v. Chapman (D. Cal. 1983) stressed the concept of intentional participation; liability would not attach to a firm that was merely a "conduit" for the employee's securities violations.[7] In Parnes v. Heinold Commodities (N.D. Ill. 1983), the court described the use of respondeat superior as "bizarre," noting that the firm itself had been victimized by its unscrupulous employee.[7]

As to claims under the Securities Exchange Act, the Act's legislative history, under which the House of Representatives version was adopted, indicates that respondeat superior is not applicable, because liability is only allowed if there was participation in the employee's fraud.[7] Furthermore, courts such as the Southern District of New York have held that respondeat superior liability is not available under Section 10(b) of the Securities Exchange Act.[8][9][10] Similarly, Thomas Hazen writes in Treatise on the Law of Securities Regulation (2005) that "Respondeat superior ... do[es] not apply to sanctions for illegal trading on inside information.[11]

As Robert Anello wrote in Forbes in 2014, "Analysis of the corporate mens rea is, by definition, contrived and one with which federal courts have struggled."[12] In the US, there is a three-way circuit split, as the Fifth Circuit and the Eleventh Circuit apply respondeat superior, the Second Circuit and the Seventh Circuit and the Ninth Circuit apply instead a concept of "collective knowledge", and the Sixth Circuit rejects the respondeat superior and collective knowledge approaches and applies its own -- third -- approach because in its view neither the respondeat superior approach nor the collective knowledge approach is ideal or effectuates the purpose of securities fraud laws.[12][13]

In US government actions[edit]

The US Supreme Court held in Ashcroft v. Iqbal, 556 U.S. 662 (2009), that government officials could not be held liable for the unconstitutional conduct of their subordinates under a theory of respondeat superior.[14]

In sharia law[edit]

Islamic law holds that, in contrast to the doctrine of respondeat superior, the responsibility for an action by an individual lies with the individual, and cannot be vicariously foisted on others.[15] The only exception would be if an employee commits the act in question by complying with a direct order from his employer.[15]

In international law[edit]

At issue in the Nuremberg war crimes tribunal following the Allied occupation of Nazi Germany after World War II was a question concerning principles closely related to respondeat superior, which came to be known by the term command responsibility. The Nuremberg trials established that persons cannot use the defense that they were only following the orders of their superiors, if that order violates international norms but especially that superiors who ordered or "should have known" of such violations yet failed to intervene are also criminally liable.

See also[edit]

References[edit]

  1. ^ Criminal Law - Cases and Materials, 7th ed. 2012, Wolters Kluwer Law & Business; John Kaplan, Robert Weisberg, Guyora Binder, ISBN 978-1-4548-0698-1, [1]
  2. ^ Harger, Lloyd. "Workers' Compensation, A Brief History". Florida Department of Financial Services. Retrieved 22 June 2010.
  3. ^ Owen, Ralph Dornfeld. "Tort Liability in German School Law". Law and Contemporary Problems. Duke University School of Law. 20 (1): 72–79. JSTOR 1190275.
  4. ^ Yoram Dinstein. Israel Yearbook on Human Rights 1978, Martinus Nijhoff Publishers.
  5. ^ a b Commentaries on the Law of Master and Servant: Including the Modern Laws on Workmen's Compensation, Arbitration, Employers' Liability, Etc., Lawyers co-operative publishing Company, 1913.
  6. ^ a b c d e f Ralph L. Brill (April 1968). "The Liability of an Employer for the Wilful Torts of his Servants," Chicago-Kent Law Review.
  7. ^ a b c d e Barbara Black (January 1, 1984). "Application of Respondeat Superior Principles to Securities Fraud Claims under the Racketeer Influenced and Corrupt Organizations Act (RICO)," 4 Santa Clara L. Rev. 825.
  8. ^ Israel Davis and Julie E. Kamps (December 18, 2006). "Dusting off the Common Law; Plaintiffs turn to agency and respondeat superior in an attempt to hold ‘non-speakers’ liable for securities fraud," New York Law Journal.
  9. ^ Donna Nagy, Gerald Russello, Margaret Sachs (2016). Securities Litigation and Enforcement in a Nutshell, West Academic.
  10. ^ Converse v. Norwood, 1997 WL 742534 (SDNY; "in Central Bank, the [Supreme] Court implied that all forms of secondary liability are no longer viable.").
  11. ^ Treatise on the Law of Securities Regulation - Thomas Lee Hazen
  12. ^ a b Robert Anello (October 16, 2014). "Corporate State of Mind in Securities Cases: The Sixth Circuit Blazes a New Trail," Forbes.
  13. ^ Jayme Herschkopf (2017). "Securities Litigation," Federal Judicial Center Pocket Guide Series.
  14. ^ Ashcroft v. Iqbal, 556 U.S. 662 (2009), Justia US Supreme Court Center.
  15. ^ a b Business Law - Robert W. Emerson

External links[edit]