Adams instituted an action against the New York City Transit Authority for both physical and emotional injury resulting from the incident. She alleged that the Authority was both negligent in the hiring, training, and supervising of its clerk and had also acquiesced to the clerk's conduct. The Supreme Court dismissed those claims but awarded Adams summary judgment on her claim based on the breach of the common carrier's duty that was set forth in Stewart v. Brooklyn & Crosstown R.R. Co., 90 N.Y. 588 (N.Y. 1882). The Stewart court held that common carriers are subject to strict vicarious liability for the actions of their employees regardless of whether or not the actions of the employees were outside of the scope of the employment.
The Appellate Division reversed the summary judgement on the grounds that the Stewart rule was no longer viable. The Court of Appeals took this appeal with the permission of the Appellate Division.
In Barad, the defendant-carrier's employee assaulted and beat the plaintiff while he was a passenger on a subway train. The court held the defendant-carrier absolutely liable for the violent act of its employee, notwithstanding that the act was committed willfully and with malice. The court noted that "[t]he Extent of the liability of a carrier under circumstances of this kind is sui generis because of the contract of safe carriage. . ." Barad, 295 N.Y.S. at 907.
In Brown, the defendant-carrier's employee addressed plaintiff, a passenger on a bus, with abusive and offensive language after plaintiff complained to the employee bus driver for failing to stop at her exit. The court held the defendant liable for breach of contract in failing to provide safe and courteous passage to its passengers. The court noted that it "is well settled that a carrier is liable for the acts of its servants and the natural and legitimate consequences thereof, and it is incumbent upon the carrier to accord passengers respectful and courteous treatment." Brown, 295 N.Y.S. at 925.
After Brown, no reported New York case applied the Stewart rule of strict or absolute common carrier liability resulting from employee torts.
Under the vicarious liability doctrine, employers are liable for the torts of their employees only if committed within the scope of employment. The justification for this rule is that losses are certain to occur from the torts of employees while acting within their employment capacity. These losses are fairly allocated to the employer as a cost of doing business. However, torts committed outside the scope of employment are not part of the employer's enterprise or cost of doing business. Accordingly, the employer should not be forced to bear the burden of any losses incurred from such torts. In the instant case, the employee's action against Adams was clearly outside the scope of employment as a token booth clerk. Thus, Defendant should not be saddled with the burden of compensating Adams.
Historically, common carriers have been subject to a higher duty of care. However, the Adams court found no logical connection between this heightened standard of care and the imposition of absolute or strict liability upon carriers for acts committed by employees outside the scope of their employment. Furthermore, travel by common carrier was once considered hazardous, justifying the standard of absolute liability. Travel by common carrier has since improved and currently poses little risk to passengers. Even assuming a high level of risk, the hazard imposed by the willful and malicious acts of employees is not related to the inherent risk of travel.
The Adams court rejects the analogy between helpless passenger and confined prisoner previously used to justify the Stewart rule. Passengers were compared to prisioners because both groups are confined to small spaces. However, the court observed that hospitals and theaters also physically restrict individuals but that no court would impose absolute liability on the proprietors of such establishments for intentional employee torts.
The court also rejects the argument that the carrier's duty to protect passengers from third party criminal attacks supports imposing absolute liability for assaults by employees. The notion that carriers should be liable for third-party criminal assaults has been greatly curtailed, thus the theoretical underpinning of the argument has been eroded.
The Adams court concludes its opinion by criticizing the Stewart court's reasoning in adopting the rule of absolute liability. The Stewart court reasoned "that carriers should be held liable for the irrational and gratuitous intentional misconduct of their employees, since it would be anomalous to deny liability in those circumstances while imposing liability when an employee negligently permits a passenger to be attacked by a stranger." The court rejects this justification for two reasons. First, this syllogism applies not only to common carriers but also to other service enterprises; therefore, such reasoning is not sound as a basis for a special rule for common carriers. Second, the syllogism is defective because situations involving liability for employee negligence under the doctrine of vicarious liability require that any employee misconduct occur within the scope of employment. Intentional employee misconduct is not action within the scope of employment.
In short, the Adams court views the Stewart rule as outdated and accordingly announces a new rule that common carriers cannot be liable for the torts of employee committed outside the scope of their employment.
In suing New York City Transit Authority, Adams claimed it was negligent in its hiring, training, and supervision. These claims were dismissed for lack of factual or legal support. Now that tort victims will be unable to recover against common carriers for employee torts if those torts were committed outside the scope of employment, there may be an increase in negligent hiring claims. In Abdullajeva v. Club Quarters Inc., No. 96CIV.0383 (LMM), 1996 WL 497029 (S.D.N.Y. Sept. 3, 1996), decided after Adams, the District Court recognized that an employer may be liable to a tort victim if he had knowledge of the employee's propensityfor certain behavior, the sort of behavior which the employee exhibited in commiting the tort. How New York state courts will deal with a possible rise in negligent hiring claims and whether they will curtail or expand recovery under this theory remains to be seen.
In addition, Adams does not address the policy issue regarding judgment-proof employees. An injured passenger forced to sue only the employee for acts committed outside the scope of employment may often result in judgements rendered in favor of plaintiffs but which will never be satisfied.
A number of state court have considered the issue of common carrier vicarious liability for torts of employees. Nadeau v. Costley, 634 So. 2d 649 (Fla. Dist. Ct. App. 1994) (upholding traditional doctrine); Teixeira v. Car Cab Three, Inc., No. 9268, 1994 WL 413034 (Mass. App. Div. July 29, 1994) (upholding traditional doctrine); Whittle v. Southern Bell Tel. & Tele. Co., 410 S.E.2d 575 (S.C. 1991) (citing traditional doctrine); Sebastian v. District of Columbia, 636 A.2d 958 (D.C. 1994) (rejecting the traditional doctrine). Federal courts in the First, Fifth and Ninth Circuits have upheld the traditional vicarious liability doctrine. See, e.g., Morton v. De Oliveira, 984 F.2d 289 (9th Cir. 1993); Craig v. M/V Peacock, 760 F.2d 953 (9th Cir. 1985); Muratore v. M/S Scotia Prince, 656 F. Supp. 471 (D. Me. 1987), aff'd 845 F.2d 347 (1st Cir. 1988); Tullis v. Fidelity #&38; Casualty Co., 397 F.2d 22 (5th Cir. 1968).
A recent comment from the Tulane Maritime Law Journal sheds light on the issue of common carrier vicarious liability for employee torts. See, Philip H. Budwick, Strict Liability or Negligence: What Standard of Care Applies When Crewmembers Assault Passengers on Cruise Ships, 19 Tul. Mar. L.J. 353 (1995) [hereinafter Budwick]. The article describes the historical and current debate surrounding this issue.
According to Budwick, there were two decisions delivered towards the turn of the twentieth century by the United States Supreme Court in which the Court held common carriers absolutely liable for the intentional and unintentional torts of their employees against passengers. Budwick at 357-360 (citing New Jersey Steamboat Co. v. Brockett, 121 U.S. 637 (1887) and New Orleans & N.E. R.R. Co. v. Jopes, 142 U.S. 18 (1891)). Then, in the case of Kermarec v. Compagnie Generale Transatlantique, the Supreme Court considered a case where a passenger plaintiff was injured on a vessel; however, the case did not involve a tort inflicted upon the plaintiff by the carrier's employees. Kermarec v. Compagnie Generale Transatlantique, 358 U.S. 625 (1959). The Kermarec Court abandoned the strict liability standard for common carriers and replaced it with a heightened standard of reasonable care. Because the decision did not involve the situation of an employee committing a tort on the passenger, it has since been unclear what effect the Kermarec decision should have on the traditional strict vicarious liability doctrines that have become well settled in many jurisdictions.
The Restatement (Second) of Torts articulates the rule that it is the duty of a master to prevent the servant from intentionally harming others, even if the servant acts outside the scope of his employment. Restatement (Second) of Torts § 317 (1979). In order to trigger this rule, however, the servant must be upon premises of the master or upon premises which the servant is privileged to enter only as the master's servant. Id. In the absence of this condition, the master may nevertheless be liable for the intentional torts of its servants if the servant uses a chattel of the master while committing the tort. Id.
Prosser and Keeton explain that even where the ends of the servant are completely personal, the master may be held liable for the intentional torts of its servants. W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 70, at 505-507 (5th ed. 1984). Vicarious liability would attach particularly in those cases where a master has entered into a contractual or other relation with the plaintiff requiring the master to be responsible for the plaintiff's protection. Id. For an example of such a relation, Prosser and Keeton cite the relationship between a passenger and a common carrier. Id.