Question presented: is a court-ordered mandate a defense to torts or contractual breach?
Synopsis: Microsquish makes computer operating systems, which it either warrants as suitable for business use, or sells in a jurisdiction where such warranty is implied. Microsquish’s flagship operating system, Fenster, comprises thousands of components, some of which were created by Microsquish itself, some of which Microsquish licensed from third parties. Once, one of these third-party components, Flush by Adobo Systems, contained a bug which caused consumers to lose data. In the resulting suit for breach of warranty, Microsquish unsuccessfully argued that it should not be held liable since the flaw was Adobo’s fault.
[sidebar: this is how it would play out, yes? IANAL but I believe in those circumstances the consumers would have a claim against Microsquish. Microsquish might have a claim against Adobo.]
That was awhile ago, and Microsquish and Adobo have cleaned up their software. But now Bob is suing Microsquish for breach of warranty due to a different component included in Fenster: Firebadger. Apparently Firebadger had a horrible bug which caused major damage to Bob’s business. The situation is exactly parallel to the earlier situation with Flush: Microsquish includes a component in Fenster, component contains bugs, bugs cause damage. But there’s a key difference: Microsquish did not want to include Firebadger in Fenster. It did so only after being ordered by a court.
Microsquish moves for summary judgment, arguing that as a matter of law it cannot be held liable for conduct it was enjoined to do. Does Microsquish prevail?
Would the answer change if Microsoft’s inclusion of Firebadger were pursuant to a consent decree rather than an injunction?
There has been talk that the European Union might force Microsoft to bundle Firefox with Windows. I’m curious to know if this would subject Microsoft to liability for any damage caused by Firefox.
My guess: the court hasn’t ordered Microsquish to sell Fenster at all. The order is just that, if they do sell it, they must include Firebadger. The decision to sell is still Microsquish’s, and they still have responsibility for that decision and its consequences. If they can’t sell it safely, they can’t sell it at all, and that is their responsibility.
If sued by a customer who is injured by Firebadger, Microsquish can of course join the manufacture of Firebadger in the proceedings, and seek an indemnity from them. Not much use if the manufacturer of Firebadger is insolvent, of course, but Microsquish are not completely without recourse.
IANAL, but I can’t see the difference between this and a situation where Ford sells cars with faulty seatbelts that kill people. In both cases the manufacturer included the component because of a legal requirement to do so, not because they wanted to.
In neither case can I see why that absolves them of responsibility for defective parts. If you want to sell cars you have to sell them with working seatbelts. If the seatbelts don’t work you’re responsible for ny damage that results. If you want to sell operating systems you need to sell them with third party browsers. If the browsers don’t work you’re responsible for any damage that results.
But there is a distinction between the government ordering “you must include seatbelts in your cars, and they must be conformant to <some ANSI standard>”, and the situation suggested in the OP where the government orders “you must include the third-party browser Firebadger in your operating system”. In the former, you get to design your own seatbelts (within the limits of the required standard); in the latter, you are forced to distribute a product designed by someone else over whom you have no control.
Even if the government says “you must include a third-party browser” without specifying which one, there is still a distinction: the “third-party” condition effectively removes Microsquish’s control over the design of the browser, forcing them effectively to select from such third-party browsers are available, even if hypothetically they are all terrible and unsafe.
Ford makes its own seatbelts. If the NTHSA required Ford to use seatbelts manufactured by ACDelco, and they were defective, then you’d have an analogous case.
Incidentally, AFAICT, the EU is only going to require that MS unbundle Internet Explorer from Windows 7. They haven’t required Microsoft to offer a third-party browser with it, merely to “give consumers the choice”.
Personally, I don’t see what the big friggin’ deal is; if I buy a car, and the manufacturer offers me free tyres* as long as I own the vehicle, is it violating antitrust laws?
It is a problem if those tyres only work correctly with 70% of standard tarmac roads, and are likely to be punctured by a variety of common road hazards.
It’s fairly moot in the example because I believe courts have generally held that software creators have very little liability for bugs or defects, beyond the cost of the software. If microsquish’s software has a bug that makes you lose all your data, generally all you can get out of microsquish is a refund.
Or, to extend the analogy further, you can use the free manufacturer’s tires to drive to the place that gives away different free tires that a lot of people like. Without that first set of tires, it would be trickier to get the second set. So coming with no tires even impacts the people who want the second set of tires.
Except that you can’t actually remove the originally-installed tyres, cause the nuts are burred. The best you can do is bolt on the additional set of better tyres, and hope that the originally installed tyres don’t actually interfere with the better ones, and the whole thing is not as well balanced as it should be and…
I think the metaphor is being stretched a bit too far.
I would think that Microsquish would have drawn up legal contracts with Firebadger delineating who is liable for what, what happens when versions change, how the two products will interact, and who retains all rights to the intellectual property, and probably a bazillion more details that I don’t know about, since IANAL.
I do, however, sit in a cubicle surrounded by lawyers, and they talk about stuff like that all day long. Microsquish would have some pretty crappy lawyers if these issues weren’t defined in contracts before issuing the next version of Fenster.
IIRC, all of the EULAs that I have waded all the way through have some language along the lines that if you accept the EULA to activate the software, you are also agreeing to hold harmless the producer of said software for any loss of data, income, productivity, whatever.
A good point. But more generally, can you be held liable for your actions if those actions were undertaken pursuant to court order? If a court orders Jones to stand on Smith’s front yard and dance a jig, can Smith sue Jones for trespass?
How on Earth can there be good-faith contract negotiations between Microsquish and Mothrilla (makers of Firebadger) when Microsquish is compelled by court order to bundle Firebadger? Why shouldn’t Mothrilla’s lawyers offer a contract assigning all liability to Microsquish, take it or leave it?
If this were a real case and the party in question were Microsoft, you guys would have points, but in this hypothetical I specifically stated that Microsquish warrants the suitability of its products or is subject to an implied warranty. In general (IANAL), breach of warranty exposes the warrantor to liability for damages suffered by consumers who relied on such assurances.