In this insightful article, New York trial attorney Vito A Cannavo, Esq. discusses the release of misinformation and how it may result in liability for negligence in a commercial setting under New York law.
By Vito A. Cannavo, Esq
When can the careless provision of misinformation give rise to liability? Surprisingly, the issue has not been addressed very often outside of commercial contexts. The Court of Appeals long ago said that “[n]ot every casual response, not every idle word, however damaging the result, gives rise to a cause of action,” but that liability will be imposed “where there is a duty, if one speaks at all, to give the correct information.” International Products Co. v. Erie Railroad Co., 244 N.Y. 331, 337-338 (1927). The Court further stated that whether transmission of misinformation gives rise to liability depends on “many considerations” and that such considerations include whether “the information is desired for a serious purpose,” whether “he to whom it is given intends to rely and act upon it,” and whether “the relationship of the parties, arising out of contract or otherwise” was “such that in morals and good conscience the one has the right to rely upon the other for information, and the other giving the information owes a duty to give it with care” (id.).
Over the years, this Court has addressed negligent transmission of misinformation primarily in commercial contexts, a subject area in which liability is more circumscribed. Prosser and Keeton, supra, at § 33, p. 205 ( “[a]lthough negligence is sometimes involved” when transmittal of misinformation gives rise to economic injury, liability in such cases “has been kept within somewhat more narrow limits than where the harm is to person or property”).
In commercial settings, the Court has said that liability cannot be imposed unless the information was “incorrect,” there was reasonable reliance upon the incorrect information, and, often most critically, there was a “privity-like” relationship “imposing a duty on the defendant to impart correct information to the plaintiff.” J.A.O. Acquisition Corp. v. Stavitsky, 8 N.Y.3d 144, 148, 831 N.Y.S.2d 364, 366 (2007). However, privity per se has not been required, even in commercial cases. Glanzer v. Shepard, 233 N.Y. 236, 242 (1922).
In the personal injury context, section 311 of the Restatement [Second] of Torts states that liability arises if, (a) one provides false information to the other, (b) the other acts in reasonable reliance upon such information, (c) the actor providing the information should expect that the person harmed was a person who would be “put in peril by the action taken,” and (d) the actor providing the information was negligent in either ascertaining the correct facts or in transmitting the information.
The standard set forth in the Prosser hornbook echoes the Restatement formulation. Prosser and Keeton, supra, at § 33, pp. 205-206 (“… even where the defendant is not consciously misstating the facts, he may still be liable for negligence in speaking where he has not exercised proper care to ascertain the truth, or to communicate it. An assurance that a bridge or campus is safe, or that there is no danger from blasting operations, or from the location of a plane, may result in liability for negligence when the plaintiff relies upon the assurance and suffers injury. The same is true when a physician informs those in contact with the patient that the illness is not contagious, when with proper skill and care the doctor should have known better”).
New York attorneys with experience in “careless information” cases should anticipate that New York’s Court of Appeals would be likely to follow the Prosser and Restatement formulation.