What’s on Their Minds: The Court Examines Tortious Acting in Concert. DeVries Dairy v. White Eagle Cooperative Ass’n.

On August 28, 2012, the Court handed down a merit decision in this case.  Read the analysis of the merit decision here.

On July 10, 2012, the Supreme Court of Ohio heard oral argument in the case of DeVries Dairy v. White Eagle Cooperative Assoc., 2011-1995. The issue in this case is whether, under the applicable circumstances, Ohio recognizes a cause of action for tortious acts in concert under the Restatement (2d) of Torts, § 876. The Court accepted this as a certified question from the federal district court in Toledo.

DeVries operates a commercial dairy farm. In 2003, it became a member of White Eagle, a dairy farming cooperative.  Under the co-op membership agreement, White Eagle was the exclusive marketing and sales agent for all of its members, and distributed proceeds among them. White Eagle hired Jacoby & Co., and its subsidiary company, Dairy Support, Inc. (DSI) to manage its day-to-day operations, including determining buyers, terms of sales, and prices that co-op members would receive for their milk.

In 2008 White Eagle reduced the proceeds it paid to DeVries, allegedly because DeVries  treated its cows with  bovine growth hormone. DeVries notified White Eagle that it was ending its contract with the co-op, and then sued White Eagle, Jacoby, and DSI, in federal court alleging various causes of action in tort and contract, including a claim for tortious acts in concert. Later, in an amended complaint, Devries added a breach of fiduciary duty claim against all three.

The trial judge granted summary judgment in favor of White Eagle on all claims except one narrow contract issue, but concluded that he could not determine whether the Supreme Court of Ohio has, or would likely, recognize a cause of action for tortious acts in concert, and certified that question to the Supreme Court of Ohio. Read the oral argument preview of this case here.

Here’s the Restatement (2d) of Torts § 876, Persons Acting in Concert

For harm resulting to a third person from the tortious conduct of another, one is subject to liability if he

(a) does a tortious act in concert with the other or pursuant to a common design with him, or (b) knows that the other’s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself, or (c) gives substantial assistance to the other in accomplishing a tortious result and his own conduct, separately considered, constitutes a breach of duty to the third person.

Counsel for DeVries argued the Ohio Supreme Court should answer “yes” to the certified question because it was not creating any new law.  He asked the Court to find that  section 876 is a proper and concise statement of the existing common law of Ohio, which would apply to this case. The jurisprudence in this area is muddled, sometimes referring to civil conspiracy, at other times tortious acting in concert.  The Court should acknowledge the principle that those who act to assist others in commission of a tort should be held responsible, even if in their own right they may not have committed all the elements of the underlying tort.

Counsel for Jacoby and DSI argued that while the Court might have mentioned section 876 in a couple of cases, it has not adopted it. Nor does he think Ohio has recognized a common law cause of action for acting in concert. Under the Court’s jurisprudence in answering certified questions, he suggested, the question is has the Court recognized this tort in the past, not whether it will do so going forward. And it hasn’t recognized it in the past, so the certified question should be answered in the negative. The plaintiff is not left without a remedy.  It still has a breach of contract claim against White Eagle.

Counsel for White Eagle Cooperative also argued that the certified question should be answered in the negative. To hold White Eagle responsible for torts of another party would really be expanding the scope of liability.  All that is left against White Eagle in this case is a contract claim, and that is the plaintiff’s remedy. (The breach of fiduciary duty claim was added later).

Does Ohio Recognize this Claim or Not?

Justice O’Donnell persistently asked. And he was relentlessly persistent. Does no decision mean it has or it hasn’t? Should the Court say it does from now on? Hasn’t the question already been answered no because being here and asking the Court to recognize it means it hasn’t so far, right? The federal courts can’t apply it if the Court hasn’t said it’s the law. If the Court says it isn’t the law, where does that leave things?

Is it fair to say that under existing law, some state judges have found this tort is available, but under the existing facts, wasn’t met, asked Justice Pfeifer. (answer from DeVries: yes) Is there any law that says if the Court hasn’t considered it, it doesn’t exist and can’t be used? Does this have to be an up or down vote? What if Section 876  is factually helpful in some cases, but not others? Doesn’t the Court have to be very careful about how it answers the question, because if the Court says Ohio doesn’t recognize this tort, “someone may have a crackerjack of a claim and we would cut their legs off by saying we don’t recognize it.”

Justice McGee Brown noted the significance of the certified question including the words “under these circumstance.”  If the Court answers the question in the negative, wouldn’t that  just mean no one has proven the requisite facts yet?

The Restatement versus the Common Law

What’s the difference, asked Justice O’Donnell, who couldn’t be stopped. Does the Restatement offer something the common law doesn’t? Is there a common law cause of action for acting in concert? How does common law conspiracy match up against acting in concert?

The Restatement is the common law, right? Asked Justice Pfeifer.

If the case does go back with a “no” answer, isn’t there still the current common law version of civil conspiracy to apply to this case, with similarities to the Restatement, asked Justice Stratton.

Individually versus Acting Together

Must there be individual liability before there can be concerted action liability, asked Justice McGee Brown. Must each individual defendant be found to have committed a tort before we reach acting in concert?

If We Adopt the Restatement do we get the whole Megillah?

Asked Justice Cupp, although not exactly in those words.  He wanted to know if the Court adopted section 678, it adopted all the comments as well. What if the Court didn’t want the whole thing?

Tort or Contract?

Several justices asked about which claims existed against which defendants.  Justice Pfeifer asked if the reason the Restatement didn’t fit is because a member of the co-operative is essentially suing on a contract claim (yes, says White Eagle).

How it Looks from the Bleachers

I think there is close to unanimous agreement that the certified question should be answered in the negative, but answered carefully.  I think the Court is likely to be clear that any past mention of section 876 was neither an adoption nor a rejection of that section, but merely an acknowledgement that the elements weren’t met in the particulars of those cases. The Court is also likely to phrase its answer carefully enough to make it clear that it is not rejecting section 876, just not finding it under the “applicable circumstances, “ (as asked). It is quite possible that the “crackerjack case” Justice Pfeifer suggested might come along, and the Court would then adopt section 876.

Given all the questioning about the common law, and the fact that I teach torts,  it is worth a mention that back in the day when joint and several liability reigned supreme, it was a  well-established common law principle that those who act in concert to injure a plaintiff (like two drag racers, for example) would have been jointly and severally liable for the plaintiff’s damages.

Here’s student contributor Greg Kendall’s take:

The Court doesn’t share the appellant’s sense of urgency regarding the adoption of Section 876, and appears to be skeptical that an explicit adoption would be necessary. The justices also seem to be unclear as to how the causes of action defined in Section 876 are that different from what is currently available to plaintiffs under the common law in Ohio.

 

 

 

 

 

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2 Responses to What’s on Their Minds: The Court Examines Tortious Acting in Concert. DeVries Dairy v. White Eagle Cooperative Ass’n.

  1. Andy Engel says:

    The Court answered the question in the negative today. saying that it has never recognized a claim under section 876. But what does that mean for common law claims, such as civil conspiracy, and aiding and abetting? Both are forms of tortious acts in concert which are similar to the claims laid out in the Restatement.

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