An entity—a landlord, a manufacturer, a phone company, an Internet platform, a manufacturer of self-driving cars—is making money off its customers’ activities. Some customers use the services of the entity in criminal and tortious ways. Is the entity responsible for customers’ actions?
The question is broad and may not have a general answer. But in this essay, I’d like to focus on one downside of answering it “yes”: What I call the Reverse Spiderman Principle—with great responsibility comes great power. It is important to consider whether such organizations should be empowered to monitor, probe, and control the behavior of their customers.
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Three examples are given of instances in which courts declined to place legal responsibility because they don’t want businesses to enforce customer protection. In the beginning of 1900s, government officials requested that telephone companies and telegraph firms block illegal gamblers from accessing their services. The bookies could of course have been prosecuted. But they also argued that the companies should have done the same—and indeed sometimes prosecuted the companies for allowing their lines to be used for such criminal purposes. There were many courts that ruled in the negative. Let me just give you one example:
The railroad can refuse to transport a person who behaves in a disorderly manner or is dangerous for the life of others, the officer or property or other company personnel. A railroad company would not be allowed to refuse to transport a passenger who has paid or tendered his fare because the railway officers believed that the person was going there to commit an offense. Railroad companies would not be allowed to refuse passengers if their officers knew that the train was going to the home of [the bookmaker]This would allow him to operate his gambling establishment with the help of associates. They are not the ones who can regulate private or public morality. Common carriers cannot control the private and public conduct of people who request service.[1]
If the telegraph or telephone company (or the railroad) were held responsible for the actions of its customers, then it would acquire power—as “censor[] of public or private morals”—that it ought not possess.
These companies, which were commonly carriers, had no power and, therefore, legal responsibility. Take a look at a second example. Lunney v. Prodigy Services Co.A 1999 New York High Court case that held that email systems are immune from any liability for defamatory materials sent by users.[2]Although e-mail systems don’t constitute common carriers, the court ruled that they should not be held responsible for blocking messages. An e mail system’s role in transmitting email is similar to one of a phone company. The court stated that “email systems do not want nor expect to supervise the contents of subscribers’ conversations.”[3]Although it is not prohibited for e-mail system to censor their users communications, the law should not force them into this role.
Here’s another example. Castaneda v. OlsherA mobile park tenant was injured during a shootout with gang members. The landlord sued him, saying it had “breached a duty to not rent to known criminal gang members.” According to the court, no.
[W]We aren’t convinced that forcing landlords to keep rental units away from suspected gang members is fair or practical. [the]Problem [of gang violence]Or one that is consistent with the state’s overall public policy. . . .
If landlords face regular liability for injury gang members cause to the premises they are more likely to refuse rental to anyone. Mightyour gang members or any other family member who might be in a band.[4]
This would in turn tend to lead to “arbitrary discrimination on the basis of race, ethnicity, family composition, dress and appearance, or reputation,” which may itself be illegal (so the duty would put the landlord in a damned-if-you-do-damned-if-you-don’t position).
However, even though such landlords’ likely responses are illegal, holding landlords responsible would put people in danger and make them less free. “Families with ethnicities, teenage children or modes of dressing or personal appearances that could suggest a gang affiliation would be faced with an extra obstacle to housing search.” Even if landlords only checked all criminal records of tenants, refusing to rent to any tenant with convictions or arrests related to gang activity would unfairly deny many Californians housing. This was a “likely Social Cost” that helped the court to reject landlords being held responsible.
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Now of course many such companies (setting aside the common carriers or similarly regulated monopolies) have great power over whom to deal with and what to allow on their property, even though they aren’t held responsible—by law or by public attitudes—for what happens on their property. Prodigy might have, theoretically, decided to remove users they believe are using their email for anti-capitalist or libel purposes.
But in practice, in the absence of responsibility (whether imposed by law or social norms), many companies will eschew such power, for several related reasons—even setting aside the (presumably minor) loss of business from the particular customers who are ejected:
- It takes effort and time to police customers.
- The risk of customers being policing is that they will make errors and cause bad publicity, which can lead to many customers becoming dissatisfied.
- Customers who are policing may be accused of discriminatory police work, and this could lead to bad publicity.
- Sometimes, policing some customers can lead to public demand for more policing. XWe kind of like the idea, so why don’t we also kick off a group? YWe loathe, but we see them as being similar. X?”
- Conversely, a policy of “we don’t police our customers”—buttressed by social norms that don’t require (or even affirmatively condemn) such policing—offers the company a simple response to all such demands.
- Policing customers creates tension even with customers who aren’t violating the company’s rules—people often don’t like even the prospect that some business is judging what they say, how they dress, or whom they associate with.
- Competitors who sell services to customers can use the advantage of policing them.
These companies may be encouraged to use power when legally responsible. Even though responsibility can be accepted by the public as a moral and broad norm that must be enforced through pressure rather than a legal one, it is still in part so. This norm will increase countervailing costs for non-policing. This would reduce the costs of policing. For example, it will increase the countervailing cost of non-policing.
The company may also use the norm to defend itself against criticisms of a company’s errors or discrimination. They might say that errors “will happen”, especially when it comes to large-scale policing. After all, we know you expect us to do policing, haven’t?
Accepting these norms can change companies’ culture and organisation. They would become more comfortable with such power. It would create bureaucracies within the companies staffed with people whose jobs rely on exercising the power—and which might be looking for more reasons to exercise that power.
It would encourage staff to make policing an official part of their company’s mission. This will allow them to subtly incentivize them to do policing effectively and efficiently, rather than just following the laws or social norms. A few initial police missions which are based on a limited range of misuse can be twisted into broader use of these powers.
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Calls for “business responsibility” have been somewhat limited so far. These calls typically involve continuing business-customer relationships. Facebook, for example, can track what users post (or respond to complaints).
Occasionally, there have been calls for businesses to simply not deal with certain people at the outset—consider Castaneda v. OlsherPlaintiffs claimed that the defendants shouldn’t rent mobile homes to gang members. These are rare. It is rare that anyone would suggest that car dealers refuse to sell vehicles to suspect gang members for use in drive-by shootings, or as crime getaways.[5]Most people will agree that gang members have the right to purchase and use vehicles in all legal ways. Car dealers should not try to restrict gang members’ access. The legislature could impose these responsibilities by prohibiting the sale of weapons to felons, or spray paint to minors. However, the rules should be narrowly defined and based on objective criteria. This doesn’t require sellers to make judgments about customers that are deemed dangerous.
Today, more and more products require interaction between customers and sellers. For example, let’s say I am driving a Tesla Self-Driving Car that keeps in touch with the company. You may recall how Airbnb forbade people from renting to them who were likely to be coming to Charlotteville in support of “Unite the Right.”[6] If that is seen as proper—and indeed as mandated by corporate social responsibility principles—then one can imagine similar pressure on Tesla to stop Teslas from driving to the rally (or at least to stop such trips by Teslas of those people suspected of planning to participate in the rally).
This might cause some hostility. My Not Tesla’s, but car. Airbnb, however, refused to make bookings for any properties other than its own. The rationale for this was that Airbnb had to prevent its services from being used in a way that promotes a violent, racist event. Why wouldn’t Tesla have an obligation to protect its intellectual property, its computers and (assuming that they are always in touch with me) its cars from being misused the same way? Tesla’s contract for sale might seem to implicitly promise that it will try its best to deliver me to my destination. But that is just a matter of the contract—if companies are seen as responsible for the misuse of their services, why wouldn’t they have an obligation to draft contracts that allow them to fulfill that responsibility?
Maybe there is a line here. Perhaps we have a rule that services are not ancillary or sold of goods can be transferred. What if I rent my Tesla instead of buying it? It’s possible to say, at the very least, that there is nothing wrong with a product seller refusing customers continuing their use of services that allow them to purchase those products.
However, this would be an exception to the larger approach I am suggesting. A business should have at least certain types of commercial relationships. Not be held responsible for what its customers do—because we don’t want it exercising power over its customers’ actions.
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[Again, this is of course just a sketch of what concerns me here. I’ll be elaborating on this, and also discussing areas where businesses are indeed held responsible for the actions of others—certainly of their employees but also, sometimes, of tenants and other customers.[7]Also, I’ll discuss how the responsibility to protect one’s properties has resulted in pressure to increase surveillance. Many courts recognize a duty for commercial property to have cameras. Since I have plenty of time, I would love to get your thoughts and reactions.
[1] Commonwealth v. Western Union Tel. Co., 67 S.W. 59, 60 (Ky. 1901); Also see Pa. Publications vs. Pa. Pub. Util. Util. App. 1942).
[2]Conduct that occurred before 47 U.S.C. was the basis of this case. § 230, which provided such immunity by statute. The court therefore addressed whether a libel claim was available in the first place, thus avoiding the need to determine whether § 230 was retroactive.
[3] Lunney v. Prodigy Servs. Co., 723 N.E.2d 539, 542 (N.Y. 1999).
[4] 162 P.3d 610 (Cal. 2007). This point was unanimously decided by the Justices.
[5] However, you can see Andrew Jay McClurg, Handguns and the Tortious Marketing of Handguns. Strict Liability is Dead. Long Live Negligence19 Seton Hall Legis. J. 777, 816 n.178 (1995) (quoting a proposal that gun sellers must, on pain of liability for negligence, “be especially alert to, and wary of, gun buyers who display certain behavioral characteristics such as … appear[ing]Wearing unkempt clothing, hav[ing]”A slovenly look”
[6] https://www.thedailybeasairbnbt.com/airbnb-uber-plan-to-ban-unite-the-right-white-supremacist-rally-participants
[7] Cf. Morris v. Giant Four Corners, Inc.,498 P.3d 228, (N.M.2021), a case in which a gas station was held liable for selling gasoline to drunk drivers. This type of negligent entrustment claim is often denied by many courts. It applies to selling goods rather than lending, renting or leasing them.