Written By: Rory Van Loo
In an era of servants and masters, respondeat superior emerged to hold the powerful accountable for the acts of those they control. That doctrine’s significance has only grown in an economy driven by large corporations that rely heavily on legions of subsidiaries and independent contractors, such as banks deploying independent call centers, oil companies using drilling contractors, and tech platforms connecting consumers to app developers. It is widely believed that firms can avoid third- party liability for many laws by outsourcing or creating subsidiaries.
This Article shows that common narratives of the demise of third-party liability are incomplete. Respondeat superior is alive and well. Moreover, in environmental, employment, consumer protection, discrimination, and other areas, the law requires large companies to act as gatekeepers by regulating third parties. These gatekeepers incur liability when they fail to enforce the law. In light of these features, the expansion of liability would be aptly described as respondeat gatekeeper.
The task ahead is to understand and reinforce liability’s ongoing adaptation to a financially and digitally intermediated world. Updating courts’ analytic tools to include economics and network theory would more accurately measure power compared to the current, intuitive approach. Moreover, courts should view pervasive technologies of control—most importantly surveillance tools and online platforms—as stronger evidence of liability. The revival has the potential to restructure corporations, markets, and society in a beneficial manner by bringing harmful activities, as a matter of law, back within the fold of the firm.
Continue reading The Revival of Respondeat Superior and Evolution of Gatekeeper Liability.