Suzy and Sam Shopper are walking on 5th Avenue near Saks Fifth Avenue and notice a person selling luxury goods on the sidewalk including, without limitation, Rolex watches and Louis Vuitton handbags. The watches are selling for $99 each and the bags for $999. Fred Fraudster, the person selling the merchandise, swears to Sam and Suzy: "These good are all authentic; they are seconds; they have minor imperfections in them." Suzy and Sam inspect the goods and discuss the unbelievably cheap price of the Rolex and the realistic discounted price of the Louis Vuitton “seconds.” Sam buys a Rolex, suspecting it’s a fake, and Suzy buys a Louis Vuitton handbag believing it is an authentic “second.”
Sam and Suzy then run into Suzy's BFF Betty, who admires the purchases just made by Sam and Suzy. Suzy tells Betty about the "bargains" she and Sam just found, which, in turn, causes Betty to become incensed over the fact that Suzy did not invite Betty to go shopping with them. A heated discussion ensues during which Betty angrily yells at the top of her lungs: "Sam and Suzy Shopper are thieves; they buy knock-offs." People passing by hear Betty’s shouts and sneer at Sam and Suzy, obviously believing Betty. Sam and Suzy start to have nervous breakdowns. Suzy, however, becomes so distressed that she removes one of her Manolo Blahnik stiletto heels and raises it in an intentionally threatening manner towards Betty.
Meanwhile, Lenny Lifesaver sees what is going on from down the block and runs to the rescue. When he is about 5 feet away, he slips and falls on the sidewalk where kitchen grease was left there from leaky garbage bags placed by the swanky French restaurant Le Bon Hotdog as well as broken concrete. Lenny’s ankle is instantly shattered. Being unable to move and break-up the fight, he desperately throws a piece of broken concrete that was in the middle of the grease slick left there by AJ Construction Company when it was repairing the sidewalk the day before, and hurls it at Suzy. It's a perfect strike, but Suzy ducks and the concrete hits Pam Passerby who is watching the whole scene. Pam is knocked-out and taken to the hospital.
Questions:
1. Who is potentially liable to whom?
2. What are the legal theories at play?
3. What are the damages obtainable, if any?
4. What are the defenses?