Tort Law & Business Ethics: Wal-Mart Worker’s Family Suing

By now everyone knows the story: an employee was trampled in a Black Friday Sale stampede at a suburban New York Wal-Mart. (I blogged about it Friday and again Tuesday.)

The latest (not terribly surprising) development: the victim’s family is suing.
From MSNBC: Victim’s kin sue in Wal-Mart stampede death

The family of a worker trampled to death in a “Black Friday” crush of bargain hunters at a Long Island Wal-Mart store filed a wrongful-death lawsuit on Wednesday, claiming store ads offering deep discounts “created an atmosphere of competition and anxiety” that led to “crowd craze.”
The lawsuit claims that besides failing to provide adequate security for a pre-dawn crowd estimated at 2,000, Wal-Mart “engaged in specific marketing and advertising techniques to specifically attract a large crowd and create an environment of frenzy and mayhem and was otherwise careless, reckless and negligent.”

Good. I’m glad they’re suing. Not because I necessarily think Wal-Mart is really in the wrong, here, and deserve to be sued. They may well be, but that’s not my point. My point is that some things really are best handled by people (and companies) suing each other. This falls under the heading of tort law — roughly the branch of law that pertains to private lawsuits (as opposed to criminal prosecutions) seeking remedy for personal wrongs or harms.

Recall that I mentioned in Tuesday’s posting that New York lawmakers were contemplating enacting legislation in response to this incident, and also that a couple of customers caught up in the stampede were suing. I suggested the latter was likely to be more fruitful. Now it’s time to say more about why.

Tort law is one way we regulate corporate behaviour. There are many others: corporate law, contract law, labour law, and criminal law, just to name a few. Those methods all tend to rely on government to exercise judgment, in advance, about just how companies should behave. Tort law works differently. Basically, the system of tort law says that if companies screw up in ways that harm people, those people can sue. Companies know this, and so they’re motivated — obviously, not always sufficiently motivated — not to screw up in ways that harm people. But if they do hurt someone, they can be sued. And if the court buys the plaintiff’s case, the plaintiff will win, and the court will make the defendant (the company) pay the plaintiff some money. And if the amount awarded is high enough (or if the publicity from losing such a case is bad enough) the company will do things differently next time. It will change its behaviour.

Many people are big fans of tort law as perhaps the best way to regulate corporate behaviour. Why enact specific regulations in advance, they ask, when you can issue the general guidance that, hey, if you hurt someone an just about any way (even ways we can’t foresee) we (the courts) will help your victims to hurt you back. It’s a one-size-fits-all solution. Critics argue that that approach is flawed (at least if relied upon exclusively) because it is too reactive: it’s about fixing problems after someone has already been harmed — in the present case, killed — and because it’s too slow & cumbersome.

I don’t have a view on the exact extent to which we should rely on tort law (as opposed to regulation) to control corporate behaviour. But it seems to me that in the present case, tort law is the answer. In order for regulation to work, it requires bureaucrats to figure out, in advance, how to run a retail store. Not a particular store (regulations can’t be about particular entities) but retail stores in general. And it’s unlikely that they’ll be able to figure that out. Are they really going to be able to specify the right number of security guards per store? For stores of what size? Maybe the right number of guards for every 1000 square feet of retail space? Are they going to be able to specify detailed procedures for appropriate crowd control? How the barricades should be set up? Whether customers waiting outside must be forced to line up single-file, or two-by-two? All of that seems unlikely. But losing a lawsuit — or settling out of court, which seems more likely here — is likely to inspire Wal-Mart managers to do what managers are supposed to do: respond creatively to the specifics of a challenging situation.
Thanks to my pal Andrew Potter for the heads-up on this development.

2 comments so far

  1. Jim Gaa on

    ChrisYou may well be right in this case. And your general comments make a lot of sense too. I only want to point out that tort law and regulation aren’t always as independent as your comments might suggest.For example, auditors are normally sued for negligence, i.e., for not meeting a standard of due care. These standards are set, in part, by regulation. In fact, defense against lawsuits is one of the reasons these standards are created. At the same time, these standards are sometimes overturned by courts — the Continental Vending case (US v. Simon, if my memory is correct) was an example of a negligence case in which the judge instructed the jury that following the rules (which were set by the profession) is not a sufficient defense against negligence. In the case of professional activity, these standards are normally set by a self-regulating professional organization. In the case of the US accounting profession, some of the standards are now set by the PCAOB, a semi-public organization created by the Sarbanes-Oxley Act.

  2. Chris MacDonald on

    Jim:You’re absolutely right. I’ve oversimplified significantly. Thanks for clarifying that. In fact, there’s significant overlap with tort law and several other branches of law as well as professional & industrial self regulation.Chris

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