Business Is in Trouble Over Criminal-Violence Liability

The most fashionable lawsuit of the 1980s is making private property ownership in California more hazardous than ever. It uses traditional rules of negligence law to allege that a business owner has failed to protect a victim from criminal conduct occurring on his property.

For example, a convenience-store customer was shot while attempting to prevent an armed robbery. In his lawsuit he alleged that the franchise owner, the franchisee and the employee had failed to protect customers from assault by would-be robbers. The Court of Appeal reversed a trial court ruling dismissing the complaint.

The California courts have taken an ambiguous approach in this area of law, giving business owners and their insurers an inability to predict what their legal responsibilities are. Without specific legislative intervention, California property owners may soon find themselves shouldering the responsibility for providing police protection, a burden that traditionally has rested with state and local governments.

Ordinarily, a person who has not created a peril is not liable for failing to take action to protect another. In these cases, however, the approach that has been adopted by the courts is to “balance” various factors in each particular instance to determine if such a duty exists.

This case-by-case method guarantees inconsistent court decisions. More significantly, the factor that receives the greatest attention and often determines civil liability is foreseeability. As a result, if one owns a business in a high-crime area, the chances of being the target of a lawsuit are even greater.

The fault, however, lies not only with the courts but also with the Legislature for failing to provide authoritative guidance on the limits of liability. California has no statute delineating factors that give rise to a protective duty on the part of landowners.

This is not to imply that landowners should bear no responsibility in the fight to reduce crime. Although citizens have traditionally turned to the police for protection, it is clear that in the effort to make our neighborhoods safe the police can no longer be expected to handle the task entirely on their own. Business owners are advised to provide adequate lighting, to discourage loiterers and to employ other safeguards to deter crime on their premises.

It also is acknowledged that some business situations demand that the owner provide considerably more protection. For example, motel and hotel operators and landlords of large apartment complexes may have a duty to employ security guards. In these situations the patron is particularly vulnerable, and relies almost entirely on the business owner for protection. However, the average merchant operates under a different set of circumstances.

Regarding the financial losses of crime victims, the law provides for indemnification as well as rehabilitative services through the state’s Restitution Fund. But, rather than seeking fair compensation from that source, crime victims are being encouraged to sue the owner in hopes of obtaining virtually unlimited monetary awards.

Unless the Legislature responds with some sensible answers, a number of perplexing questions will remain unresolved: What circumstances might give rise to a protective duty? Since protection costs money, as in higher insurance premiums and greater security costs, how would a business operating on small profit margin fulfill its obligation in a high-crime area? If business owners absorb the high cost of protection by raising the price of their goods and services, how will the poor be able to meet their basic needs? Would it not be more economical for businesses to relocate to “safer ground?” If so, how would members of poor communities, who often lack adequate transportation, obtain needed goods and services?

These concerns were recognized by the New Jersey Supreme Court in the 1962 case of Goldberg vs. Housing Authority, in which the chief justice wrote: “(I)t is fairly simple to decide how many ushers or guards suffice at a skating rink or a railroad platform to deal with the crush of a crowd and the risks of unintentional injury which the nature of the business creates, but how can one know what measures will protect against the addict, the degenerate, the psychopath and the psychotic?

” . . . It would be quite a guessing game to determine whether some unknown thug of unknowable . . . mentality would have been deterred if the owner had furnished additional policemen. Police protection . . . cannot provide assurance against all criminal attacks . . . inevitably crimes will be committed notwithstanding the sufficiency of the force.”

Because uncertainty in the law may promote frivolous suits and inconsistent court decisions, it is clear that the current approach in this area is in need of improvement. The courts are making complex decisions in an area of law that requires guidance from the Legislature. Until the Legislature acts on this issue, California business owners and merchants will remain in a precarious position.