1. Smith & Smith, a U.S. computer firm, contracted to install a computer system for Volkswagen in the company’s headquarters in Berlin, Germany. Smith’s contract included the following liability limitation: “We are only liable for loss of data which is due to a deliberate action on our part. We are not responsible for lost profits in any event.” The contract had no provisions on choice of law. A crash in the Smith & Smith system caused a loss of 92 days’ worth of financial data. Volkswagen was required to use its auditors to restructure the database at a substantial cost. Smith & Smith says it did nothing deliberate and, therefore, is not liable. Volkswagen cites German law that mandates protection by sellers against such losses and permits recovery of lost profits. U.S. law would honor the Smith & Smith clause.
Which law applies? Why?
2. Walid Azab Al-Uneizi was an employee of the Ministry of Defense of Kuwait. Liticia Guzel was an employee of the Willard Inter-Continental Hotel in Washington, D.C. One of her duties was restocking minibars in guest rooms. Al-Uneizi approached Miss Guzel outside Rooms 610 and 612 and conferred with her about restocking Room 612. After Miss Guzel finished restocking Room 612, Al-Uneizi assaulted and raped her. After the rape, Al-Uneizi gave her a Kuwaiti flag pin. Miss Guzel has brought suit against both Al-Uneizi and the Kuwaiti government, who seek a dismissal under the act of state doctrine.
Should the case be dismissed against both? [Guzel v State of Kuwait, 818 F. Supp. 6 (1993)
3. The owner of a construction firm in New York City, William Lattarulo, has been charged with manslaughter in the death of one of his workers. Lauro Ortega suffocated when the foundation of a building next to where he was digging at a Lattarulo site collapsed on him. Mr. Ortega’s head was all that was uncovered when the foundation collapsed, but the pressure of the dirt and debris that rendered him immobile constricted his chest and made him unable to breathe. He suffocated as his coworkers tried to dig him out from the debris. Mr. Ortega’s coworkers as well as a safety consultant had warned Mr. Lattarulo that the trench was unsafe and needed to have some supports placed in it to prevent a collapse. When he was warned a second time by his workers, Mr. Lattarulo said, “Don’t worry about it.” Digging operations require that a contractor hire a consultant to oversee site safety. While Mr. Lattarulo listed a company as a consultant for the site safety, he did not actually have or pay a consultant, something that saved him $90,000 on the job. On the day of the collapse, a building inspector for the city visited the site following the fatality and said there were “shoddy work conditions.” She also found eight violations of city construction codes at the site. The Lattarulo site involved digging a foundation next to another building, but the Lattarulo building required a deeper dig. The result was that the foundation of the building next to the site was weakened and required support until the Lattarulo concrete was poured to provide a substitute for the former ground support. A consultant working nearby did warn Mr. Lattarulo about the foundation’s risk of collapse if the digging went deeper. When the criminal manslaughter charges were brought, contractors had questions about their criminal liability when there are accidents on job sites.
How would you advise these contractors? When is an owner criminally liable for actions and work conducted by employees? People v. Lattarulo, 26 Misc.3d 177 (Sup. Ct. 2009)
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