Mpt File for Law School

To: Lyle Palkovitch

From: 626399

Re: Mistover Acres LLC

Date: July 6, 2017

     You asked me to prepare an objective memorandum analyzing (1) whether Petra Flynn can be held personally liable for the damage caused by aerial crop dusting carried out by the LLC in which Ms. Flynn is a member, and (2) whether the aerial crop dusting constituted an ultra hazardous activity. The following represents my objective analysis.

I. Should the aerial crop dusting be found to constitute tortious activity, Ms. Flynn is likely to be found personally liable due to her participation in the planning and execution of the crop dusting.

     Section 605(2) of the Franklin Limited Liability Company Act (FLLCA) provides that a member of a Limited Liability Company (LLC) is not personally liable for acts or debts of the company solely by virtue of being a member. However, Sec. 605(3) provides that nothing in this section shall be construed to affect the liability of a member of a limited liability company to third parties for the member's participation in tortious conduct. In Hodas v. Ice LLC, the Franklin Court of Appeals interpreted Sec. 605 (2) does not insulate a member from liability based on that member's own conduct. A member can still be found personally liable if the member participated in the tortious conduct. Further, to found liable, the member must have personally authorized, directed, or participated in the tortious act it is accused of. Lee v. Bayrd. The FLLCA does not impose tort liability on a member for performing what is merely a general administrative duty.

     In this case, Flynn personally participated in the tortious conduct. While Flynn's duties are mostly administrative, she actively participated in the decision to use MU-83. Flynn and Kendall both discussed the required use and implementation of pesticides. Further, Flynn conducted research and then selected after the research MU-83. Moreover, Flynn order MU-83 and participated in the ultimate decision to spread the pesticide via aerial means. Flynn also notified Sutton Township, the town hall, and made public notice in at least 3 other areas of her intended and actual use of the pesticide. Flynn also actively participated in the use of the pesticide by walking though the fields to inspect its effectiveness. Because Flynn was extensively involved in the use and procurement of MU-83, Flynn’s argument that she was only administratively involved will be a difficult task to prove. Should the aerial crop dusting be found to constitute tortious activity, Ms. Flynn is likely to be found personally liable due to her participation in the planning and execution of the crop dusting.

     There may be a defense to raise for Flynn. According to the Operating Agreement, day-to-day decisions regarding planting and harvesting are delegated Kendall, unless the members agreed otherwise. The use of pesticide, in harvesting and planting would likely be considered a day-to-day decision and therefore all responsibility could fall to Kendall. Unfortunately, the FLLCA materials provided are insufficient to research if there is a condition on authorized and unauthorized members tort liability. Further, the materials do not provide any decisions from the Franklin courts who have recognized this defense. While it may be worth looking into, Flynn's actual participation in the activity will still likely impose liability.

II. The aerial crop dusting likely qualifies as an ultra-hazardous activity

     The state of Franklin finds that those who participate in ultra-hazardous activities are subject to strict liability. Thurman v. Ellis. The Franklin Court of Appeals uses a six factor test to determine whether an activity is ultra-hazardous under Sec. 520 of the Restatement of Torts 2d. The Court further stated that the test is a totality of the circumstances test and that no one factor is determinative. Thurman v. Ellis. The six factors of the test are: (1) the existence of a high degree of risk of some harm to the person, land, or chattles of others; (2) the likelihood that the resulting harm will be great, (3) the inability to eliminate the risk by the exercise of reasonable care, (4) the extent to which the activity is not a matter of common usage, (5) the inappropriateness of the activity to the place where it is carried on, and (6) the extent to which the activity's value to the community is outweighed by its dangerous attributes.

     Factors (1), (2), and (3) weigh in favor of finding that the first three factors weigh in favor of finding that aerial crop dusting is an ultra-hazardous activity.

     First, aerial crop dusting could be found to pose a high risk of harm to the person, land, or chattle of others. The user's guide for MU-83 states that drift and runoff from pesticide application "may be toxic to aquatic organisms in neighboring areas." Further, the guide states “drift will occur in every application.” Because drift will occur in every instance, and there is a known pond neighboring the farm, the risk of harm will probably be found to be high.