Thanks to reader Steven Sholk, I learned that the U.S. Supreme Court recently considered the “ordinary meaning” of the words because of. Here’s how the CCH Workday blog described the issue:
Construing this critical preposition in the text of the Age Discrimination in Employment Act (ADEA), a five-Justice majority concluded the statute’s requirement that an adverse employment action was taken “because of” age means that “age was the ‘reason’ that the employer decided to act.” (Gross v. FBL Fin Servs, Inc., USSCt, Dkt 08-441). Thus, held the majority, to establish a disparate treatment claim under “the plain language” of the ADEA, “a plaintiff must prove that age was the ‘but-for’ cause of the employer’s adverse decision.” Age bias must be the sole cause, not just one cause.
Of course, as we all know, reasonable minds can differ. And in this case, four Justices had an entirely different take on the meaning of those two little words: “The most natural reading of this statutory text prohibits adverse employment actions motivated in whole or in part by the age of the employee,” wrote Justice Stevens, joined by Justices Souter, Ginsburg and Breyer, dissenting.
Issues that arise in statutory construction have a way of cropping up in contracts, too, and I can imagine that this one might.
I say in MSCD 12.456 that you should be cautious about using in contracts the word because—outside of the recitals, contracts aren’t the place for explanation. But I assume that it’s relatively commonplace for contracts to contain the construction If X because of Y, then Z. (Or If X due to Y, then Z.) And I can imagine parties fighting over the issue that arose in Gross: does Y have to be the sole cause of X, or is it enough that Y was one of a number of factors contributing to X?
I can’t research this issue online, as unsurprisingly enough Lexis and Westlaw don’t consider because a legitimate search term. I’ll have to wait until the fall, when I’ll have access to Penn Law’s copy of Words and Phrases. Meanwhile, if anyone is aware of any relevant caselaw or disputes, or has encountered this issue firsthand, please post a comment.
Of course, the issue for the drafter would be how to express either meaning rather than leaving it to the courts to resolve any confusion. Once I get a sense of the extent to which this is a real issue, I’ll come up with some wording.
6 thoughts on ““Because” and Causation Issues in Contracts”
I suppose “caused by” creates similar issues. And of course this language is a commonplace feature of business contracts, particularly some critical sections such as disclaimers, limitations of liability and indemnities.
I think this is a philosophical question as much as a semantic one—causation is a much debated topic, and there is no consensus (in legal or non-legal contexts) as to what causation actually is. I cannot think of any particular word that sidesteps the issue—”because”, “due to”, “cause”, “resulting from” and so on all have the same problem, though it would be great to hear of any concise suggestions for unambiguous words. All I can think of is using a lengthier explanation that makes clear that the “but for” test applies, or otherwise. [That’s the only solution.—KAA]
I think this particular statute could validly be read either way. If I was a legislator, I would say that in the context of a discrimination statute it would make sense to apply the “but for” test, simply to be consistent with the principle that a person should be restored so far as possible to the position that they would have been in had the tort not been committed. However, I can appreciate the policy justification for the other view too, and I suspect that how one reads the statute’s “natural” meaning depends largely on what one favours from a policy perspective.
The place I see where causation being the least adequately addressed is in mutual indemnities in commercial deals. The problem is that the indemnities fail to handle the case of mutual causation, where both parties did something that caused the claim. The misdrafting of most indemnities I see mean that each party ends up indemnifying the other party for the claim against the other, so they essentially swap spots on the liability. This means that (a) both parties are still stuck in the case and (b) each party has the perverse incentive to claim that it screwed up, so that the other party has to pick up the tab. A better approach for mutual indemnities is to list the things that count as fault (breach, commission of a tort, violation of law, etc.) and then apportion liability by comparative fault.
Not that this helps much with drafting issues, but the Supreme Court was way off base in saying that the notion of but-for causation is somehow inherent in the meaning of the word because.
If the Court were right, it would follow that in sentences where because appears, there could only be one because per result. Because if there were two becauses, with each one referring to a separate cause, neither one would be a but-for cause. And if because really means beBUT_FORcause, the sentence would be self-contradictory.
But it turns out that people don’t limit themselves to one because per result, as these examples from the web show:
These sentences don’t seem self-contradictory, do they? And of course there’s this:
Many more examples can be found by running this Google search (keeping the quotation marks):
Or try this search in Westlaw:
The “but for” test does not necessarily imply only a single cause. There may, say, 5 factors relevant to the occurrence of Event X. Let us say that the absence of any of them would have meant that Event X would not have happened – each of the 5 would satisfy the “but for” test.
If, however, Event X would have happened in the absence of one factor BUT would not have happened in the absence of, say, any 3 of them, has each of one those factors “caused” Event X? None of them satisfy the “but for” test, but all contribute (and that I think is the question the Supreme Court had to decide). What if there are not 5 factors, but 5,000, the absence of any 3,000 of which would have prevented Event X happening? Does any one factor cause Event X?
Regarding their decision, the Supreme Court did not look at the word “because” out of context. They looked at the statute and what it was trying to implement; they looked at other phrases used by legislators. They would not, I think, deny that “because” can be used in the ways Neal suggests (though it is not clear in all cases which meaning the passages he quotes are using, further to my first point) – they just decided that, in this statute, that was not the meaning intended.
“Not only because” would then be contradictory too.