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Vicarious Liability Case Analysis

Although the case affirms the court of appeals decision, it nevertheless changes the law, by making it much less likely that a fast-food franchisor can be held vicariously liable for other injuries, specifically, those resulting from defects in the food, itself.

The court of appeals decision did not state so explicitly, but suggested that a franchisor would be liable for such injuries.

In its discussion of Miller v. McDonald’s Corp., 945 P.2d 1107 (Or.Ct.App.1997), in which the court permitted a plaintiff to sue McDonald’s after biting into a sapphire stone in her Big Mac, the court stated, “Miller is distinguishable on its facts; the injury bore a direct relationship to how McDonald’s instructed its franchisee to prepare food, and McDonald’s regularly inspected the restaurant to ensure compliance with its product standards. Vicariously (sic) liability did not result from a general right of control but because ‘there is evidence that [McDonald’s] had the right to control [its franchisee] in the precise part of its business that allegedly resulted in plaintiff’s injuries.”

This discussion thus suggests the court of appeals agreed with the reasoning, and that if a Wisconsin gourmand were to bite into a sapphire in a Big Mac, it would permit the franchisor to be found vicariously liable.

In contrast, the Supreme Court called Miller “contrary to the prevailing rule that quality and operational standards contained in a franchise agreement are generally insufficient to support franchisor vicarious liability.”

Another case that received different treatment in the two courts is Schlotzsky’s Inc. v. Hyde, 538 S.E.2d 561 (Ga.Ct.App.2000). The Supreme Court cited the case with approval for its holding that a patron who contracted hepatitis from tainted food could not sue the franchisor.

The court of appeals also cited Schlotzsky’s; rather than citing the principle above with approval, however, it cited Schlotzsky’s merely for the understated observation that “standards enable a franchisor to protect its franchise and trade name.”

It is arguable that the practical effect of the decision is that a franchisor can never be found vicariously liable for the negligence of a franchisee. If there is any part of a business over which a fast-food franchisor exercises the most control, it is the quality of the food. It is essential for a franchise like McDonald’s that a Big Mac taste the same from one restaurant to the next.

If the Supreme Court is skeptical of imposing vicarious liability on account of a sapphire in a Big Mac, or hepatitis from improperly handled food, then it is difficult to imagine what facts would give rise to vicarious liability.

Finally, it is noteworthy that the court began its discussion by stating that the basis for imposing vicarious liability on franchisors is “weak[]” and that the rationale of encouraging safety has “less strength” in the franchise setting than in others in which it applies.

That is not to say, however, that franchisors can never be found liable for fast-food injuries, even if the above assumption regarding vicarious liability is correct.

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To use the infamous case of the woman who burned herself by spilling hot McDonald’s coffee on her lap, McDonald’s could still be held liable in Wisconsin, but on a direct negligence theory.

Because McDonald’s required that its coffee be brewed and served at X degrees Fahrenheit, it is directly negligent in such an instance. Likewise, if a franchisor directed that its franchisees heat chicken fillets to only 160 degrees, instead of 180, and a customer got salmonella, liability would be direct.

It is noteworthy that a number of decisions cited by the parties and relied on by the court of appeals were found inapposite by the Supreme Court, because those cases involved direct liability claims against franchisors, rather than vicarious liability.

When examining cases from other jurisdictions for their persuasive authority, attorneys need to be careful to ensure that the cases they are citing are actually vicarious liability cases. If the issue in a case is whether a franchisor has some particular duty, it is almost certain that it is actually a direct liability case.

– David Ziemer

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David Ziemer can be reached by email.

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