Absence of privity does not foreclose recognition of a duty It is the responsibility of courts, in fixing the orbit of duty, to limit the legal consequences of wrongs to a controllable degree. In fixing the bounds of that duty, not only logic and science, but policy play an important role.
The tenant was injured when the utility failed to provide electric service as required by its contract with the landlord. A case was filed for damages resulting from the power failure. The lower court found that the utility was grossly negligent but dismissed the complaint because the utility did not owe a duty to the tenant in any compensable legal sense. The case was elevated on appeal to the Court of Appeals of New York.
Can a public utility be liable for damages suffered by a tenant if it has a contractual relationship with the tenant's landlord?
As a matter of public policy, the Court held that liability for injuries in a building's common areas should be limited by the contractual relationship. The court affirmed the decision, holding that, in a system-wide power failure, permitting recovery to those in the tenant's circumstances would violate the court's responsibility to define an orbit of duty that placed controllable limits on liability. The court noted that, though the utility was grossly negligent, the utility's behavior was not so consciously culpable as to fall into the category of conduct contemplated as reckless and wanton.