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<br />, <br /> <br />~ <br /> <br />A Study of GIS fo, the Colorado Department of 'Nalu,aJ Resou,C8s <br /> <br />October 9. 1992 <br /> <br />LIABILITY FOR GIS PRODUCTS AND SERVICES . NEGLIGENCE AND <br />UNIFORM COMMERCIAL CODE <br /> <br />The existence and extent of potential liability for DNR or other state agencies, institutions, <br />or political subdivisions that become involved in the provision of GIS infonnation for some <br />fee should be an issue of consideration before any such program is commenced. It makes <br />no sense for an entity to set about "recovering" its development costs if the attempt to do sO <br />could open that entity to liability exposure that could cost much more than the amount <br />recovered or possibly the amount spent developing the information system in the first <br />place. This section of the report describes a generalized approach to liability which might <br />arise under either the law of negligence or the Uniform Commercial Code (UCC). The <br />following section reviews the Colorado law applicable to these theories of liability. <br /> <br />N <br />.... <br />4Il:tt <br />.... <br /> <br />One line of demarcation is the potential for liability if the undertaking is "discretionary." <br />That is. is the activity of supplying GIS information mandatory under state law, such as <br />Public Records law, or is this an activity that the state or state agency is allowed to engage <br />in under state law? Two principles are involved: first, the government's free right to <br />engage or not engage in discretionary functions; and second, the government's liability <br />when, by its conduct, it has created a justifiable reliance on its adequate performance. As <br />to the first principle, the government not only has discretion whether or not to engage in <br />proprietary activities like marketing and selling GIS products, but discretion to determine <br />the extent to which it will do so. As to the second principle, there can be no initial justified <br />reliance upon, or expectation , of, any particular degree of performance, and this element <br />will not be automatically imputed. For example, justified reliance could be found as a <br />result of particular actions. statements, and knowledge of product limitations and- the <br />intended use, and particular representations that were made on the part of, or by, the <br />infonnation provider that then caused damage. <br /> <br />Once the decision has been made to engage in a discretionary activity or function, the <br />sovereign may be held liable, in the same manner as private parties, for the negligence of <br />the actions of its employees and agents in the performance of such activities. Such <br />negligence may take the form of incorrect information entered into a GIS during data <br />conversion that later produces an incorrect line or label on a map. If that map leads to the <br />damages resulting from expensive capital construction in the wring place, and the actions of <br />the information providers in marketing or explaining the use of the map caused the injured <br />party to justifiably rely on the information, liability is likely. Regardless of immunity <br />claims or issues of waiver of exceptions to immunity, when an agency's actions are based <br />on the proprietary authority of government, the general rule is to treat the activity as subject <br />to the same rules as a private corporation in the private sector. It would be inappropriate to <br />characterize actions based on proprietary powers as other than discretionary activity. <br />Because of the potential that a court may find that a state's charging of fees beyond mere <br />reproduction costs for infonnation is- a proprietary action, it is advisable to investigate steps <br />to insure protection from liability that would normally be taken in the private sector. <br /> <br />431.7 <br /> <br />PlanG'aphics, Inc. <br /> <br />12 <br />