March 18, 2015 Articles

Conspiracy Liability: If the Underlying Wrong Doesn't Fit, You Must Acquit

An examination of the genesis and expansion of the "legally capable" requirement.

By Ben Johnston – March 18, 2015

When I was in fifth grade, my friend Chas asked me if I wanted to play on the trampoline of his neighbor, whom I knew to have an open-door policy when it came to trampoline tomfoolery. I happily agreed. Unbeknownst to me, due to Chas’s insistence on performing the notorious and often dangerous double-bounce, the neighbor had outlawed Chas from the trampoline and decreed that, for each violation, Chas would be fined $5. When the neighbor spotted Chas and me on his trampoline, he immediately demanded the $5 fine from Chas. Well, Chas was dead-broke, so the neighbor turned to me, insisting that my conspiratorial conduct enabled him to recover the $5 from me. How could I be liable for Chas’s misconduct? There was no neighborly decree applicable to me. How could I be expected to know his conduct was unlawful? This was not even my neighborhood.

Civil conspiracy claims are a powerful tool for plaintiffs, particularly consumer plaintiffs. A successful civil conspiracy claim permits recovery from every participant in a wrongful act, regardless of whether or not that participant was a direct perpetrator of the act or the degree of its activity. Aside from the ominous tone of a conspiracy claim, the glamour of a conspiracy claim to plaintiffs is that it opens the door to total recovery from supplemental sources that may have deeper pockets or higher policy limits, or both, than the direct perpetrators of the wrongful act. To obtain the full gamut of damages from these peripheral sources, a plaintiff need only prove the amorphous elements of a conspiracy claim: (1) there was an agreement between two or more persons to commit a tortious or unlawful act (or lawful act by unlawful means); (2) an overt act in furtherance of the agreement by any conspirator; and (3) damages.

This is a precarious predicament for entities, like my fifth grade self, who unwittingly enter into an agreement to accomplish an act that is only unlawful if performed by the counterparty. Without limitations, these entities are exposed to conspiratorial liability for the breach of a duty owed solely by others, a duty they may not have even be aware of. Without limitations, the prospect of conspiratorial liability imposes an implicit obligation on contracting parties to ensure that the counterparty’s performance is within the bounds of alllaws and regulations that could serve as the basis for a civil lawsuit, including obscure consumer protection statutes from far-off jurisdictions.

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