Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 8. Duty Problem
contractual relationship with the defendant. See Doyle v. South Pittsburgh Water Co., 199 A.2d
875, 878 (Pa. 1964). After the New York Court of Appeals decided Strauss, the New Jersey
Supreme Court refused to immunize a defendant-utility company from liability arising outside of
a contractual relationship. See Weinberg v. Dinger, 524 A.2d 366, 378 (N.J. 1987).
The Restatement (Third) of Torts criticizes Moch. In particular, the Restatement notes:
[t]he difficulty with [Moch] is that the provision of utilities creates an expectation
of and reliance on continued service. When the utility ceases to supply service, the
omission is much like ceasing to provide warning signals at a railroad crossing. . . .
[R]eliance on the utility’s continuing to provide its services is a cause of harm.
RESTATEMENT (THIRD) OF TORTS: PHYS. & EMOT. HARM § 42 cmt. i (2012). Nevertheless, the
New York Court of Appeals continues to apply Strauss and Moch, even in cases that do not
involve utility companies. See, e.g., Espinal v. Melville Snow Contrs., 773 N.E.2d 485, 489 (N.Y.
2002) (holding that defendant snow removal company owed the injured party no duty of care
because the defendant contracted with the injured party’s employer, not the injured party himself).
2. Scholarly reaction to Strauss. Certain scholars have criticized the Strauss court’s
reasoning. For example, Professors Goldberg and Zipursky have stated that the plaintiff’s case for
a duty was particularly strong in Strauss because “the very point in providing electricity to
building owners is to provide for the needs and safety of their tenants.” John C.P. Goldberg &
Benjamin C. Zipursky, The Restatement (Third) and the Place of Duty in Negligence Law, 54
VAND. L. REV. 657, 719 (2001). The Strauss court, however, was concerned about the monetary
burden “imposed on New York’s major electrical supplier” if the defendant-utility company was
negligent. Id. Thus, the court disguised a policy rationale by issuing a “no duty decision.” Id.
Other scholars have stated that New York courts “act like a legislature when deciding duty in
[cases like Strauss].” Anthony J. Sebok, What’s Law Got to Do with It? Designing Compensation
Schemes in the Shadow of the Tort System, 53 DEPAUL L. REV. 501, 516 (2001). Does a court
have a non-legislative option in such cases?
Professor Daniel Farber has praised the Strauss court: “Strauss created a triage rule,
identifying a subclass of victims (those in privity of contract with the utility) whose claims
seemed particularly deserving to the court. . . . [This rule] at least establish[es] the possibility of
cutting potentially unmanageable cases down to size.” Daniel A. Farber, Tort Law in the Era of
Climate Change, Katrina, and 9/11: Exploring Liability for Extraordinary Risks, 43 VAL. U. L.
REV. 1075, 1128 (2009).
3. Policy arguments? What other policy arguments would support the Strauss and Moch
courts’ holdings? One court has considered consumer welfare as a reason to immunize utility
companies from liability. According to the court’s analysis, liability would increase utility
companies’ costs, which would be passed on to consumers in the form of higher utility rates. In
contrast to insurance premiums, which vary according to the risk of loss, higher rates would be
uniform for all consumers. The class of insurance company customers would form an ersatz
insurance pool—but one in which the low-risk consumers would subsidize high-risk consumers.
See Reimann v. Monmouth Consol. Water Co., 87 A.2d 325, 327 (N.J. 1952), overruled by
Weinberg v. Dinger, 524 A.2d 366, 378 (N.J. 1987). Why won’t the costs be borne, as the
421