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Hanson_ F2009_ Torts_ Outline

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					John Hanson, Torts, Fall 2009

                                                     Situationism
  We are moved by complex forces within and around us. We tell ourselves a story of what is moving us,
      but this often conceals a complex set of motivations that shape the attributions underlying our
        rationalizations. We also tend to miss the situational forces that move other people, instead
        attributing behavior entirely to their disposition. We make the same mistake with tort law,
  attributing its evolution to doctrinal evolution rather than historical complexity and pitched battles by
     powerful forces in society to shape, manipulate, and benefit from these changes [which often have
          significant distributional outcomes that these powerful actors seek to disguise or elide].

                               Motives  Attributional Styles  Ideology
  Concerned with bridling the gap between what actually moves us and what we imagine moves us; rejects the dominant,
  commonsense account of human behavior and replaces it with one drawn from social sciences.

          -    Legal theory should be based on the most realistic account available of the human animal
          -    Look to social sciences for insight; and to history for lessons of what forces explain the existence of, and
               changes in, tort law [as opposed to those mechanisms of changed proposed internally]
          -    We easily see disposition where not exists because of subconscious knowledge structures and implicit
               motivations with which we make sense of the world; esp. inferences re: motives and intentions … these
               schemas are often misleading (mind-demons)
          -    “Premised on the social scientific insight that the naïve psychology – that is, the highly simplified, affirming,
               and widely held model for understanding human thinking and behavior – on which our laws and
               institutions are based is largely wrong.”
          -    We are buffeted and blown about by hard-to-see situational influences around and within us; at the same
               time we chalk up our behavior to identity-revealing choice
          -    We start with conclusions reached for complex reasons and then rationalize or justify them in
               terms of a story that sounds rational to ourselves [ideology, efficiency, freedom, etc.]

  Three main errors:

          1.           We treat tort law like a person (pretend it has disposition discoverable via the case method)
          2.           Treat people as though actions are only the consequences of thinking, preferences, and will
          3.           Presume that our attributions of causation, responsibility, and blame (and underlying assessments
                       of volition, control, intent, and motive) are accurate and based in reality.

  Situationist approaches requires resistance to inference of disposition and the development of “cognitive muscle” to see
  the situation that moves people, tort law, and our attributions

          -    Four overlapping situational forces are especially influential

                   1) Simplicity: We are motivated to accept explanations and attributions that are easily managed
                      within existing knowledge structures and provide cognitive closure, even at cost of accuracy
                   2) Plausibility & Legitimacy: Tend to accept explanations and attributions that seem accurate,
                      correct, realistic, coherent, and legitimate and that lend legitimacy to the resulting policy
                   3) Affirmation: Our attributions are highly sensitive to self, group, and system affirmation … we are
                      also motivated to affirm that we are just (salient inequalities can be justified, or the injurer is
                      punished and victim properly compensated)
                   4) Power: Those with the most power (ability to influence external and internal situation with
                      respect to attributions) will wield disproportionate influence over which attributions become
                      dominant and most influential over policy

  Courts focus enough cognitive energy to potentially see both situation & disposition.
          - The law (often) reflects dispositionist starting points, but can sometimes lead to situationist outcomes
          - Dissonance is increased in courts because we are uncomfortable with explicit displays of power wielded
              through institutions by elites (an issue of legitimacy)
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                           Cognitive Science & Social Psychology
                                          Motives  Attribution  Ideology

  Motives: The foundation of a Situationist critique. We use social science to tell us
  what motivates people to make attributions and to see the world the way they do.
Motives: Injustice Dissonance & The “Just World” Hypothesis
We like to believe that people get what they deserve. It’s more comforting to believe that bad outcomes can be
attributed to a bad person than a bad world. Thus a motive to rationalize both the system we occupy, our role within it,
and the role of our group. We tell stories to make ourselves seem less vulnerable, to relieve the anxiety of living in a
world that is basically unjust

People who are disadvantaged have an incentive to stand-up for their group, but a bigger incentive to rationalize/justify
the system and the stereotypes that purport to explain their position of disadvantage.

“Just World Hypothesis”: People are motivated to see social outcomes as fair
“System Justification”: People are motivated to justify the systems that structure social outcomes
“Social System”: Government, Free-Market, Academia … also more abstract entities like “Norms”
“System Threat”: When people perceive that their social systems are under threat, their belief in its justness increases,
they become more dispositionist in making attributions, and their opinion of its leaders increases.
         - Liberals respond more to system threat than conservatives; the latter have a higher baseline
         - Threat produces resistance to system blame and assertions of system fairness
“System Escapability”: When people believe that it is easy to escape an apparently unjust system, they are more
willing to blame the system; when hard to escape, they tend to blame the victim of unjust outcomes
“Palliative Functions of Ideology”: Jamie Napier argues that ideology depends in significant part upon our motive to
understand and legitimize the systems under which we live, including its various injustices



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        -   Reactance: We want to believe that we choose freely. We are motivated to maintain that perception when
            it is challenged. We perceive an unfair restriction on our freedom (pointed out to us by advertisers)  a
            state of reactance is activated (we want to get rid of restrictions and re-establish freedom)  we react by
            removing or subverting the restriction. (cigarette industry) This is often used as a strategy to turn public
            opinion against tax, regulation, tort liability. We are told that regulation forces companies to do things that
            the market (consumers) don’t want. Regulators are “randomly and systematically wrong” (they don’t
            know what you want, and they’re only after what they want).

“Injustice Dissonance”: People are motivated to believe that the world is just and will tend to favor attributions and
knowledge schemas that support this conclusion

        -   We strive to eliminate dissonance b/w our attitudes and behaviors,
                o And to thereby maintain a consistent (and positive) self-conception
        -   Dissonance can be reduced by:
                o Bringing behavior in line with attitudes
                o Bringing attitudes in line with behavior




This dynamic moves, not only tort law, but all of law. A huge net effect whereby we disclaim attention to the
distributive consequences of our decisions and thereby allow major system-wide effects that favor some and disfavor
others. These laws are unjust, yet our ability to discuss this fact is constrained by a rhetoric that delegitimizes
considerations of distribution by insisting that we focus upon superficial, epiphenomenal doctrine [itself just the
symptom of deeper, more interesting, and more fundamental causes].

Motives: Implicit Bias, Risk Assessment, and Obedience
Research by Pronin: Implications of Personal and Social Claims and Denials of Bias

        -   “Bias Blind Spot”: We tend to see bias much more in other people than in ourselves
        -   A self-serving motive to see ourselves as impartial
        -   We overvalue introspective information [we know what we’ve thought about]
        -   We are motivated to see those with whom we disagree as irrational or biased
        -   We judge others by looking at their behavioral outcomes, we judge ourselves by our intent

Bias and Risk Assessment

        -   Act/Omission Bias: We irrationally distinguished between affirmatively causing harm and allowing
            foreseeable harm to occur through our inaction
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       -    Emotional Proximity Bias: We make less rational choices when our emotional attachment increases
       -    Public versus Private: The public worries more than experts when it feels as though it lacks control
               o Variations across race, gender, class, affect, and ideology affect risk assessment
               o “Cultural Cognition Project” by Dan Kahan (Yale): Show the manners in which ideologies shape
                    assessment of risk [we care a lot about how people die, not just how many do so]
               o There is no “neutral” position on risk

Obedience

       -    We are motivated to be obedient and to follow orders
               o Milgram Studies
               o Solomon Asch Studies
               o McDonalds Case
               o Shock the Puppy Experiment

Legitimacy, Procedure, and Fairness
Tom Tyler on Legitimacy and Legitimation

       -    Legitimacy: The belief that authorities, institutions, and social arrangements are appropriate, proper, and
            just; leads to a feeling of personal obligation to defer to those entities
       -    Legitimation: The characteristic of being legitimized by being placed in a framework through which
            something is viewed as right and proper
       -    It is costly to use raw power to achieve desired outcomes; more effective to seek legitimacy
                 o Elites must “convince” the public that they “deserve” to make rules for everyone
                 o Obligation is a key element of the concept of legitimacy
                 o Legitimating Ideology: A set of justifications that lead a system and its authorities and
                      institutions to be seen as normatively/morally appropriate by people within the system
                 o We are more likely to obey those authorities that we perceive as legitimate
                 o Fair procedure is essential to perceived legitimacy
                            Procedural justice increases levels of support and extra effort to improve the system
       -    Legitimacy provides a reservoir of support amongst the public for support (separate of self-interest)
                 o A basis for justifying oppression or harm to others
                 o Especially important during times of decline [hard to appeal on the basis of self-interest]
       -    Legitimacy intimately connected to procedural fairness/justice
                 o When experiencing unfair allocation outcomes from a legitimate authority, people are less likely to
                      see those allocation procedures as unfair
                 o Idea of “substance” can also be used to legitimate law, i.e. the “rationality” of a doctrine
       -    Legitimacy, The Market, Resource Allocation
                 o Differential allocation of resources, resulting in differences in social/economics standing among
                      groups, can raise issues about legitimacy
                 o We accept legitimating myths (Market) and blame individuals rather than the system
                            People believe that the market is a normatively appropriate and fair system for resource
                               allocation, that people deserve market outcomes,
                            People also insist that, therefore, the government should not intervene
       -    Legitimacy and Inter-Group Relations
                 o In the US, legitimating myths often rely heavily on stereotypes about minority groups
                 o People tend to legitimate the status quo, even when it is disadvantageous to the self
                 o People are motivated to interpret their experiences so as justify existing conditions
                 o Social Dominance Theory: The struggle for status among groups is played out through
                      competition to gain acceptance for ideologies that support to undermine the legitimacy of the
                      status of dominant and subordinate groups
                 o Both the advantaged and disadvantaged support stereotypes justifying the advantaged
                            “Poor but Happy” versus “Rich but Unhappy”
                            This kind of stereotypes psychologically offsets the one-sided advantage of elites
                 o We are motivated to believe that:
                            Existing social arrangements are just
                            We have not personally suffered from discrimination

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                        Harboring emotions such as resentment is socially inappropriate
        -   Legitimacy and System Justification Motives
                o System-justifying ideologies decrease anxiety, guilty, frustration, etc.
                o They also increase satisfaction with one’s situation in life
                o “Palliative” psychological functions of ideology = justification of one’s position in a system

Dale Miller on Injustice, Anger, and Respect




        -   Procedural Justice: The methods, mechanisms, and processes used to determine outcomes as opposed to
            the fairness of the outcomes themselves
                 o Seen as an end in-itself, not just as part of a larger self-interested concern with outcomes
                 o Contradicts neo-classical economic theories, whose models only look to outcomes
                            Status and prestige are conveyed both by resources (distributive justice) and procedures
                               used to administer those resources (procedural justice)
        -   “Voice”: Key to procedural justice … the extend to which the formal structure of a proceeding provides
            disputants with the opportunity to have a say in how their case was presented
                 o Instrumental Voice: Can one convey one’s interests to the decision maker?
                 o Value Expressive Voice: Is one listened to when one conveys these interests?
        -   Other Procedural Entitlements Include:
                 o Interpersonal Sensitivity: Polite and respectful treatment from others
                 o Accountability: Explanations/accounts for any action with personal consequences
                 o “Psychological Contracts”: An implicit sense of what is acceptable within a given relationship
        -   Violation of any procedural entitlement can lead to a sense of injustice
        -   Three conceptual relationships
                 o Disrespect/Anger: Disrespect a common source of anger, but not a necessary condition
                 o Disrespect/Injustice: Bourdieu argues that an insult sullies the picture of himself than an
                     individual intends to project, and which he imagines to be his. It therefore deprives people of
                     something they believe to be rightfully theirs’. Miller argues that insults create a social imbalance
                     – it subjects people to something they do not deserve. We are okay with retaliatory aggression
                     because it represents a form of self-defense against injustice
                 o Anger/Injustice: We rely on anger as a cue to the presence of injustice. Anger can also lead to
                     injustice because it is normatively easier to act upon anger if we believe that it is in service of
                     justice. Labeling actions as unjust can justify or legitimize angry actions by either groups or
                     individuals. Injustices have a transcendent quality – no longer a personal matter, now an
                     impersonal matter of principle … the private is transformed into the public, calls for collective
                     action to defend the honor and integrity of the moral community. Naming something an injustice
                     can also compel support for retaliatory actions.
                 o 3rd Parties: Groups Rules and Values: Witnessing the harming of a 3rd-party can arouse strong
                     feelings of anger and injustice. Individuals are committed to the “ought forces” of their moral
                     community and believe they deserve respect from all members of the community. The violation of
                     these forces insults the integrity of the community – provoking moralistic anger and the desire to
                     punish the offender. We are not disinterested b/c we all have an interest in seeing that the rules
                     and authority structure under which we live are respected.
        -   Determinants of Reactions to Injustice
                 o Offender’s Responsibility
                            Intentionality

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                          Foreseeability
                 o   Offender’s Reaction
                 o   Social Considerations
                          Relation between harm-doer and victim
                          Public knowledge of the event
                o Public v. Private Responses
        -    Goals of Retaliation
                o Restoration of Self-Esteem
                o Education of the Offender


 Attributions: Depend significantly upon motives and consist of inferences that we
make about the world. We attribute causality, beliefs, responsibility, blame, etc., and
then rely upon these attributions to shape our beliefs (i.e. ideologies) as well as our
findings of liability in tort law. However, social science reveals that our attributions
   are often wrong – we tend to overemphasize disposition and to miss situation.
We have a “loose continuum of culpability” (from worst to “least bad”): intentional harm, recklessness, negligence, harm
with knowledge/control/intent. The continuum applies to the victim as well: we place most blame when victim has
least knowledge/control over the situation.

To study attribution theory, look at the actual language of court opinions (to see what judges’ attributions reveal).

Attributional Processes
Naïve Attributional Theory – our inferences regarding a person’s volition, knowledge, control, and intention shape our
attributions; the strong our inferences, the more strongly we tend to feel that the actor caused, is responsible for, and is
to blame for the outcome … which, in turn, creates a more powerful emotional response.

                      Trusted Perceptions  Attributions  Emotional/Behavioral Reactions

        -    However, our attributions of causation, responsibility and blame – and our assessments of knowledge,
             control, intentions and motives, are often misguided
        -    Moreover, our attributions of intent are often skewed by factors clearly unrelated to intent
        -    “Our attributions themselves are situational characters – determined, not so much by the underlying truth
             of the matter, but by hidden features in our interiors, unnoticed elements in our environs, and interactions
             between the two.”

We see the same outcome differently depending on our attributions. We allow millions of harmful acts to go
unpunished by law, and our tort doctrine reflects choices about who to blame, punish, and compensate.

Fundamental Attribution Error: Tendency to make unwarranted leaps from acts to corresponding dispositions

Sinister Attribution Error: The tendency to exhibit a low threshold for inferring intentionality

Framing Effects
Blame Frame: The privileged justify their status with disposition; explain/rationalize inequality to which we are
casually connected by framing it with respect to situation

        -    We [the advantaged] have good intentions and act in accordance with situational forces; they [the have-
             nots] act with bad disposition and on the wrong side of the situation [so no help] … also, they threaten our
             worldview, which is a sign of bad disposition
        -    This style of attribution has been made re: virtually every disadvantaged group [they’re just that way; they
             prefer this situation]
        -    Part of the process of making a group into a “they” or “out-group”

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         -   We miss circumstances that create/determine such conditions [seen as non-existent, or unchangeable, or
             the fault of the poor group]
         -   However, our attributions are also manipulable, biased, and subject to illusion
         -   See further: social psychology and cognitive science
         -   Tort law wrongly assumes that we’re good at making attributions

Mark Alicke and Culpable Control




Alicke tries to bridge the worlds of attribution theory and modern psychology (the unconscious and complex forces
swirling around and beneath these components) … we are unaware of many things, operating quietly, that influence
and determine our responses and attribution  even when we tell (and believe) a simpler, naïve story.

         -   Relatively unconscious spontaneous evaluations influence blame attributions
                 o We respond affectively to evidential and non-evidential factors
                 o Negative evaluation  blame-validation mode of construal (that we deny doing!)
                           We are more likely to blame those not in our in-group, or unattractive
                           We review evidence in a biased manner by exaggerating volitional and causal control
                 o Outcome Bias: We blame people more for negative v. positive outcomes in the same scenario
                           Our beliefs about “intent” change in response to the outcome (but shouldn’t!)

Abstract: What conditions encourage/mitigate the assignment of blame? What’s the process by which blame and mitigation
occur? Blame is not rationally & objectively assigned. Rather, spontaneous evaluations encourage a blame-validation mode of
processing in which evidence concerning the event is reviewed in a manner that favors ascribing blame to the individual(s) that
evoke the most negative affect or whose behavior confirms unfavorable expectations.

   Alicke’s culpable control model delineates the conditions that increase/decrease blame and analyzes the process by which
    blame and mitigation decisions are made.
   There are 3 structural links that provide the framework in which assessments of blame are made.
   These 3 links impact the amount of control that we, as observers, assign to the actor for his/her actions.

Step (1): Volitional behavior control -- Is the given behavior voluntary?
         o Criteria: Accidental or Planned? Is it freely chosen or coerced? Did the actor understand what she was doing?
         o Constraints: Are there capacity constraints (e.g., poor hearing)? Are there situational constraints (e.g., violence as
             self-defense)? To determine whether there are constraints, ask whether the actor would have behaved differently
             had the supposed constraint not been present.
Step (2): Causal Control – Did the behavior cause the given consequence?
             o Criteria: To assess causality, (a) ask whether the behavior was sufficient for the outcome to occur (a/k/a
                  effective causal control), (b) look at the proximity of the behavior to the outcome, and (c) look at how unique
                  the causal force was (important, or just one of many weak forces?).
             o Constraints: any other intervening causal variables.
Step (3): Volitional Outcome Control – Did the actor intend to cause the consequence?
             o Criteria: did the actor desire and anticipate the outcome to occur?
             o Constraints: It could be that the actor desires a certain outcome, but did not anticipate that his/her action
                  would lead to the outcome (but nevertheless it does). Or that the actor anticipates that a certain outcome will
                  result from his/her behavior, but does not want it to occur.
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   The model highlights the idea that people’s proclivity to blame an actor for his/her actions is conflated with their
    assessments of personal control. These are relatively unconscious, spontaneous evaluations of the mental, behavioral and
    consequence elements (Steps 1-3).
   The stronger each of these 3 links is, the more control we see the actor as having in the situation, and therefore, the more
    likely we see the actor as culpable/blameworthy for the outcome.
   Factors such as the actor’s attractiveness, reputation of social class affect our views of that actor’s blameworthiness

Zimbardo on the Power of Situation
        -    People underestimate the role that situational forces play in shaping human behavior
        -    It is indeed the case that situational forces are powerful
                   o Kurt Lewin’s early studies on authoritarianism: divide groups of boys into 3 groups, each lead
                       by a different type of leader (authoritarian, laissez-faire, and democratic) … differences in
                       leadership study lead to different group orientations
                   o Solomon Ash’s studies on conformity: when subject sees others identify the obviously wrong
                       answer as correct, the subject also states that the incorrect answer is correct.
                   o Milgram famous study on obedience: ordinary people willing to give (what they think is) an
                       electric shock to a stranger if directed to do so.
                   o Stanford “Jail” Experiment: Students who are assigned to be guards are responsible for other
                       students who are assigned to be prisoners. Once you give the student guards uniforms, rules, a
                       jailhouse environment, etc. – they really adopt the role in full – sometimes even being brutal to the
                       prisoner students. Also, prisoner students, despite being subjected to sadistic guards, did not ask
                       to quit the experiment. They had lost all perspective re- their ability to leave.
                    People do better on eye exams after they’re placed in a “fighter jet pilot” situation -- placement in
                       this situation actually leads to higher scores on eye exam

Nisbett & Wilson on Verbal Reports of Mental Processes
        -    There is little or no direct introspective access to our higher order cognitive processes, including
             evaluation, judgment, problem solving, and initiation of behavior
                  o We miss stimuli that crucially influence a response
                  o We miss our own responses
                  o We miss the fact that an influential stimulus was even present
        -    Example Experiment: Erroneous Reports about the Influence of an Individual's Personality on Reactions
             to his Physical Characteristics
                  o In this experiment, they showed that the manipulated warmth or coldness of an individual's
                      personality had a large effect on ratings of the attractiveness of his appearance, speech, and
                      mannerisms, yet many subjects actually insisted that the cause and effect ran in the opposite
                      direction, asserting that their feelings about the individual's appearance, etc. had influenced how
                      much they liked them.
        -    Why aren't we aware of our unawareness?
                  o We do in fact have access to quite a bit of private knowledge.
                  o We are often capable of describing the intermediate results of a series of mental operations in such
                      as way as to promote the feeling hat we are describing the operations themselves.
                           We are not always right about these!
                  o Lack of feedback. We don't normally have people telling us that our hypotheses about our mental
                      processes are wrong, so we feel more strongly that they are correct

Ideology: The set of descriptive, normative, and prescriptive beliefs that we more or
        less self-consciously hold about the world and about human nature.
Napier and The Palliative Function of Ideology
        -    Income inequality is increasing in U.S. and also in Western Europe
        -    Even though people prefer equality and prefer to see fairness, people are also motivated to understand and
             legitimize the system they live under – system justification theory.

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                 o For disadvantaged, the needs to justify the system conflict w/ needs to justify the group or self.
                 o System Justification serves a palliative function: lets you feel better about the current status.
                 o Not justifying the system  must entertain thoughts of an alternative system (hard to do!)
       -    Political conservatism
                 o Two core concepts, (1) resistance to change (2) acceptance of existing inequalities
                 o System-justifying ideology fits with conservatism b
                 o Conservatives seem to be happier than liberals.
       -    Research question: Does engaging in system justification ameliorate what would otherwise be a negative
            effect of experiencing inequality?
                 o If it’s so, conservatives should be happier than liberals only insofar as they are higher on the
                      acceptance of system-level inequality.
                 o Alternative hypothesis:
                           Demographic differences (married, wealthy, old & younger (as opposed to middle age),
                               regular church goers).
                           Differences in cognitive style (liberals have a higher need for cognition than conservatives
                               – perhaps subjective well-being is lowered due to introspection)
       -    Two Studies
                 o Study 1
                           Adjusting for differences mentioned above, conservatives were happier than liberals.
                           Rationalization for Inequality (maybe more properly shown to be acceptance of inequality,
                               because it’s not really a rationalization on the basis of some type of meritocracy) showed to
                               be the difference.
                 o Study 2 – involved 10 countries and accounted for differences between countries, like GDP, etc.
                           Rationalization for inequality showed to be a difference (though it didn’t completely close
                               the gap for happiness between conservatives and liberals.)
       -    Hypothesis: Since inequality is seen as negative it should decrease nation level happiness. Also as income
            inequality increase – the gap between liberals and conservatives should be exacerbated.
       -    Result: Increases in inequality made national level happiness go down. Everyone’s happiness declined but
            liberals declined more than conservatives.
                 o As inequality increases people decrease in happiness but it’s qualified by the person’s ideology.
                 o Political conservative belief system serves as a buffer against negative effects of inequality.


           General: Additional factors relevant to Situationist social psychology
Knowledge Schemas and Stereotypes
 Schemas & Scripts

      Defined: Mental structures that contain general expectations about ourselves, others, and our world, guiding
       perception, inference, response and memory
      Types
        Self-Schemas
        Person Schemas
        Role Schemas
        Event Schemas (Scripts)
      Categories
        Building blocks of schemas supply structures of equivalence; allow us to group objects, events and people into
           classes, and to respond to them in terms of their class membership rather than their uniqueness
            Thinking in groups vs. thinking discretely
      Classification
        Objects straddling categories implicate subconscious judgments that are situational, depending on the schemas
           but influencing the schemas as well

 Stereotypes

      Defined: Categories enabling efficient mental processing of particular perceptions into prior schema
      Harms: How do we distinguish harms deserving compensation through the legal system from those that do not?
            Why do we talk of a tort crisis but not a crisis in over-prosecution of crimes by district attorneys?
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       Markets/Consumers: Economists think of consumers as savvy, exercising choice based on stable preferences
       Jury Box: What happens to our perception of savvy consumers when we put these same people in a jury box, a
        polling station, or the Congress?
       Legal System: How does the legal system employ stereotypes and dispositionalism to justify outcomes?
              See Eugenics, Situationism, Consent

In-Group/Out-Group
    a) Doers/Providers/Makers vs. Lazy/Passive/Consumers
    b) Businesses/Job Creators vs. Greedy Lawyers
    c) Responsible Corporate Americans vs. Sue-Happy Malingering Plaintiffs
       i) We are directly threatened by wealth-stealing lawsuits, by the tort tax and by the reduction in freedoms it entails
       ii) Our institutions are being eroded by irresponsibility and greed
       iii) Our values of self-reliance and personal responsibility are being undermined
    d) Jury Box
       i) From outside the jury box “we” can see how frivolous the case is; from inside, “they” lost powers of discernment
            (1) Manipulative lawyers? Overly sympathetic non-representative jurors?
            (2) Hot Coffee, Vosburg
    e) Neighbors
       i) We are more likely to violate social norms that involve out-group members than in-group members
            (1) Ploof; Vosburg: plaintiff/defendant separated by socioeconomic difference
            (2) Shasta City: existing ranchers vs. new arrivals (Texans)
    f) Out-Group Threat
       i) “they are a horde of industrial invaders, not a stream of stable settlers”
       ii) “they intermarried with Indians in early days and so became irresponsible”
       iii) “Disease and feeblemindedness are always conspicuous in the children”


                                                 Dispositionism
     “The person is believed to consist of a set of ‘internal,’ ‘personal’ attributes such as … personality traits,
    preferences, subjective feeling states, beliefs, and attitudes … taken together, these attitudes define each
                         person as an autonomous, freely choosing, special individual.”

        1.   Actions are freely chosen
        2.   Choices imply a preference
        3.   Preferences are stable across time
        4.   Preferences implicate the identity of the self
        5.   Outcomes are mostly controllable
        6.   People are responsible for the choices they make and the resultant outcomes

Choices reflect preferences, which constitute the foundation of identity. Actions may also reflect information
(which is presumed accurate and sufficient) or will (which is presumed strong enough to abide underlying
preferences). Therefore we are justified in punishing or rewarding people for bad or good actions.

Classical economics relies on a dispositionist view of the human animal: personal autonomy, people manifest
preferences for goods and services … rational people try to maximize this subjective utility in their decision-making

Actions freely chosen, choice implies preference, preferences stable across time & assumed to be given, preferences
imply self-identity, we control our actions  Ergo we are responsible for our actions and their expected outcomes

        -    Bad outcomes must be chosen freely or the result of imperfect information
        -    Thus a fondness for information-based reforms: if we fix this and you still make bad choices, we can rightly
             hold you responsible

Explanations for success of a Dispositionist view (and for the Blame Frame):

        1. Plausibility
        2. Simplicity
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        3. Legitimacy
        4. Affirmation
        5. Power

Consumer Sovereignty: Companies blameless because they simply give consumers what they want in a world of
stable preferences – the only proper regulation is information-based. All responsibility then falls on the consumer
[infer preference for the outcome from choices made]. If we limit choice, we limit the ability of individuals to maximize
their subjectively-determined utility. We have no right to intervene, and tort suits are just a way of allowing people to
have their cake and eat it too [by creating a culture of victims who won’t bear the consequences of their decisions and
therefore make easy choices rather than those that maximize utility]. Plus, this limits freedom [a litigious system
increases prices for everyone and forces me to pay for other people’s easy choices].

        -   Advertising is not compatible with the dispositionist view of the person [other than to say that people
            want X, and it is just a struggle for which brand within that category … but even still, advertisements play
            on affect and other heuristics to manipulate our behavior].

The Person Schema --- Thinking + Preferences + Will  Choice

Eugenics was an area in which the dispositionist script took hold.
        - A genetic version of the person schema
        - It used “science” to shift attributions to the genetic makeup of disadvantaged groups. It reinforced the
           sense of a “them” group putting a burden on “us.”
        - Eugenics was powerful because it was group-affirming for those in power. It assuaged their injustice
           dissonance by reassuring them that there was nothing they could do to help disadvantaged people (besides
           supporting eugenic policies).
        - Eugenics relied on dispositionalizing stereotypes to explain disadvantages .


                                           Law and Economics
A generation of economists arguing for broader liability in the 1960s/1970s were replaced in the 1980s/1990s by
those arguing for a “counter-revolution” in tort law.

Richard Posner: Influential law and economist, especially in tort law. Posner’s work emphasizes and realizes the huge
impact of L&E on doctrine, theory, deregulation, and pedagogy. Influential throughout the world.

Efficiency: The goal that L&E believes tort law should serve

        -   Allocative Efficiency: “Resources should be allocated to those who value them most”
                o If X owns something, and Y values it more highly, there is scope for mutual gain by exchange
                o Efficient legal regimes minimize transaction costs or mimic the outcomes of free markets
                o “An efficient liability rule minimizes the costs of preventing accidents and insuring against those
                    accidents that cannot cost-justifiably be prevented.” (Calibresi)
        -   Cooter and Ulen: Steps to L&E Analysis
                o The first step is to assume that the individuals or institutions who make decisions are maximizing
                    well-known and clearly specified economic objectives [preferences]
                o The second step is to show that the interaction among all relevant decision-makers settles down
                    into what economists call an equilibrium, a condition that does not spontaneously change.
                o The third step is to judge the equilibrium on the criterion of economic efficiency [Game Theory]

Coase Theorem: As long as there are no obstacles to bargaining, resources will be allocated efficiently regardless of
who is assigned initial entitlements and what form of protection those entitlements receive … all costs will be
internalized (no social costs) and people will behave as if they are “joint owners.”

        -   Transaction Costs:
               o Coase never quite defined what these are
               o Many legal economists tend to see transactions costs as quite insignificant


                                                           11
                o   A common claim is that much of the tort law debate boils down to a question of just how high
                    contracting costs are. The lower they are, the stronger the case is for relying on contracts
                    and markets and not on tort law  ergo, we should try to lower TC via deregulation
                          i.e. turn pollution into a ‘market’ to promote ‘efficient pollution’ instead of punishing it w/
                            tort law [get people used to thinking in contract/market terms in new areas]
                o   But TC are a REALLY BIG DEAL … sometimes much HIGHER or LOWER than they seem
                o   Legal Economists see tort law as an area where TC are high, unlikely in contracts, property, and
                    criminal law. This is not always true [implied terms can increase the TC of contracts]. But Torts
                    is a course focused on high TC [often a debate over just how high].

        -   Example: X loves front row but sits in back; Y sits in back but prefers front (gains to trade)
               o First, X&Y need to find each other [maybe buy off the regulator]
               o Need to decide how to split gains to trade [possibly different valuations]
                         Non-issue in perfectly competitive markets b/c Y sells to first buyer (X can go elsewhere)
                         Of course, not so much with monopolies
                         # sellers v. # buyers can determine relative bargaining power
               o Extortion treated as a non-issue usually … no exceptions for necessity arising from long-term
                   issues likely poverty (no obligation to reduce the price of food for the poor)

The following situations might create TC that impede contracting; and that ergo call for Tort Solutions:

        -   Unclear Law: L&E sees this as a TC  argues for clarified rules, followed by contracts rather than liability
        -   Agency Costs: Can’t always be there personally, agents operate on given rules or best guess
        -   Collective Action Problem: Can arise when one party contains multiple entities with varied preferences
        -   Time Constraints: Can impact decision-making … negotiations constrained by time [a huge issue in game
            theory if don’t have multiple iterations for reputation setting/assessing]
        -   Incommensurability in Valuation Schemes: Can disrupt effective bargaining
        -   Liquidity Constraints: Most people don’t carry tons of cash around with them

        -   What if one party is just poor? We don’t allow monetarization of labor (slavery), so we need to
            distinguish willingness to pay from willingness to accept
                 o WtP: Constrained by what we have – you put a gun to my head, how much I pay for you to stop
                 o WtA: Unconstrained – how much someone would pay you … I hold a gun to my head, how much
                    must you give me to pull the trigger with 1/6 risk of bullet
        -   L&E saw this distinction as important for large matters, but basically trivial for daily transactions
        -   Potentially HUGE systematic distributional consequences

        -   Calabresi & Melamed: Different kinds of legal rules and ways of dividing assets

                o   To whom should entitlement be given (to use a dock or not have a dock used)?
                o   What form of protection should this entitlement receive?
                         Property-Rule: Use law to prevent nonconsensual use of property + contracting
                                Protected by a property rule to the extent that someone who wishes to remove
                                    the entitlement from the holder must buy it from him in a voluntary transaction
                                    in which the value of the entitlement is agreed upon by the seller
                         Liability Rule: Its yours, I can take it, but I have to pay you back (pay price ex post)
                                Whenever someone may destroy the initial entitlement if he is willing to pay an
                                    objectively determined value for it, an entitlement is protected by a liability rule
                                This value may be what it is thought the original holder of the entitlement would
                                    have sold it for. But the holder's complaint that he would have demanded more
                                    will not avail him once the objectively determined value is set. Obviously, liability
                                    rules involve an additional stage of state intervention: not only are entitlements
                                    protected, but their transfer or destruction is allowed on the basis of a value
                                    determined by some organ of the state rather than by the parties themselves

Law and Economics Analysis (from Vincent v. Lake Erie)

        -   Possible Rules

                                                          12
                o    General Rule: Dock owner entitled to a damage-free dock, can exclude others; enjoys property rule
                     protection, bat owner can’t use dock without permission (owner can call police if he does)
                o    Necessity-Based Qualified Privilege: Boat owner has a right to dock at times of emergency
                          Both parties get entitlements, each protected by liability
                                   BO’s right to use the dock during emergency = entitlement protected w/ liability
                                      rule … BO can use dock, the DO can kick BO off only if pays damages later [Ploof]
                                   Dock-owner has a right to use its dock as it pleases; during necessity, this
                                      entitlement is protected with a liability rule
                          a.k.a. two-sided liability rule protection … allows BO to use the dock, but must compensate
                             for damages (‘unqualified’ privilege = no compensation)
                o    Reversed General Rule: Give entitlement to the BO, not DO, and protect with property rule

        -   Assumptions: Important to make explicit

                o    Actors are rational; self-interest = maximized net benefit to each transaction (common metric = $)
                o    Parties are risk neutral … expected value of risk = [absolute magnitude of risk] x [probability]
                o    No externalities [only this boat, this dock – nobody else internalizes costs]
                o    Courts can accurately measure the costs to boats and docks
                o    Rules are costless to administer [no cost to use of state power or other administrative costs]
                o    Contracting is free [No Transaction Costs]
                o    Parties evenly split any gains to trade [50/50 sharing of benefits]
                                                                                                       Yes, these are unrealistic
                                                                                                    assumptions – start with them
        -   General Assumption of Economics Models:                                                    and add complexity later

                o    Preferences are stable / non-endogenous                                       Act like judges are economists –
                o    Choices reflect preferences                                                   see how to explain tort law via
                o    Actors uninfluenced by all but most salient situational forces                efficiency analysis; say that it is
                o    Insurance plays no role (no change in incentives)                                 as though judges making
                o    Willingness to Pay = Willingness to Accept                                       common law were actually
                                                                                                   engaged in economic efficiency
                                                                                                                analysis
Game Theory: Look at efficiency effects of various rules [see notes from 9-25 and 9-30 for full game theoretic analysis
of these rules in the context of Vincent]

Note that we distinguish between efficiency and distribution: Although these rules all entail the same efficiency
[loss of either $100 or $500], the manner in which these losses are distributed differs.
          - L&E typically insists that efficiency should be the only criteria for choosing legal rules
          - But if the rules are identically efficient, why not use some other criteria to pick one? (distribution)
                  o Mitchell Polinsky: The first question policy-makers must ask: “Should efficiency be the sole
                      criterion used to evaluate legal rules, or should equity be taken into account as well?”
                  o Reflecting and advancing a long tradition of economic analysis, Polinsky concludes: “efficiency
                      generally should be the primary criterion for evaluating legal rules.

Law and Economics presents itself as the most promising positive theory of law extant – but it has a normative edge!

        -   Posner: “While anthropologists, sociologists, psychologists, political scientists, and other social scientists
            besides economists also make positive analyses of the legal system, their work is insufficiently rich in
            theoretical or empirical content to create serious competition.”
        -   Posner and Landes: “We shall try to show that the common law treatment of intentional torts can be
            explained on the hypothesis that the common law attempts to promote efficiency.”
                o See Vincent v. Lake Erie and Ploof v. Putnam for instances of L&E attempting to explain tort law
                o Explain Vincent and Ploof as cases where high transaction costs justify Tort intervention

Good economic analysis often well beyond the capacity of law … too complex, not enough data; proper efficiency
analysis generalizes out to the entire economy

Extensive Law & Economics + Game Theoretic analysis for Vincent v. Lake Erie



                                                            13
                 o   Posner and Landes: “Ploof and Vincent illustrate the large number of cases, conventionally grouped
                     under the rubric of ‘trespass of necessity,’ in which high TC make a trespass privileged”
                 o   Indeed, if we re-do game theoretic analysis but disallow contracting costs b/c TC too high, we do
                     indeed discover that this impedes efficient outcomes
                 o   So here, necessity liability rule chosen because it works best in a world of high TC
                 o   But if liability rule protection is always efficient, and property rule protection is only
                     efficient where TC are low, why not always use liability rule? Why is property rule
                     protection the norm in tort doctrine?
                           We’ve shown that both 1-sided and 2-sided liability rule protection is efficient in this case
                               … we can pick any liability rule and, regardless of TC, still reach an efficient outcome
                           So how to choose on efficiency grounds between “qualified” and “unqualified” privilege?
                           Landes and Posner answer by claiming that the court was right in Vincent to create Strict
                               Liability b/c it allows BO and DO to make long-term changes in activity and behavior
                               [doesn’t seem to quite answer the question of why we’d choose one privilege or the other]
                                    Maybe we need to choose between wanting more boats v. more docks
                                    It seems like this choice implicates distributional and other components
                                    We could easily challenge the empirical assumptions here
                                    Good economic analysis often well beyond the capacity of law … too complex, not
                                        enough data; proper efficiency analysis generalizes out to the entire economy
                                    Landes and Posner never show us how to choose between liability rules, but this
                                        doesn’t mean that Law and Economics can’t help us

        -   Change the assumption of perfect information

                 o   In this case, the BO owner is better able to estimate the relative value of the boat & dock
                 o   So we assume complete, but imperfect information
                 o   UQP creates inefficiency b/c BO always docks … w/ QP, the DO always allows and the BO can then
                     choose whether to dock or not  this permits “separated equilibrium” permits efficient outcomes
                 o   We want to create a policy that gives whichever party is present the decision … QP has DO always
                     allow, but allows the BO a choice depending on type of boat [and BO better positioned to know]
                           This solves Puzzle #1
                           The necessity-based qualified privilege announced in Vincent can be justified as the rule
                               that will most faithfully lead parties to behave efficiently in the typical high contracting
                               cost, emergency situation – where there is asymmetric information (or presence).
                 o   Recognize that the long-term dynamic effect of a necessity-based privilege could be an arms race
                     between BO and DO, which constitutes an inefficient use of resources

        -   Why is the general rule one of property protection, not liability protection, when we known that liability
            protection works better with high transaction costs?

                 o   Will LRP generally result in less efficient outcomes?
                 o   What do we mean by efficiency?

Ayres’ Game Theory Overview

1) Game-theoretic modeling consists of defining the rules of the game and then “solving” the game—deriving the best
   strategies for each player and the equilibrium that will result if each player undertakes his best strategy. A set of
   strategies will be resilient against deviance if each player can do no better if the other players conform.
2) A game tree consists of a series of nodes which are the points in the game at which a player takes an action. This
   kind of representation allows modelers to visualize the sequential nature of games and to define with greater
   precision the information available to decision-makers at the time a decision is made.
3) Game theory is helpful with regard to principal-agent models because of the possibility of adverse selection and
   moral hazard.
   a) Adverse selection: players have asymmetric information about a player’s type (e.g. adverse selection would
       result if only the unhealthy opted for insurance)
   b) Moral hazard: an agent can take actions that are not directly observable by the principal



                                                            14
4) Substantive legal rules constitute part of the rules of the game. Strategic choice of legal rules may mitigate the
   inefficiencies of adverse selection or moral hazard. Strategic choice of default rules can give players with private
   information incentives to reveal their information by bargaining around the undesirable rule.
5) Criticisms of game-theoretic approach to legal analysis:
   a) Failure of many models to produce a unique equilibrium
   b) Slight changes in the models’ assumptions may create large jumps in outcome—a signal that the models offer
        weak predictions of human behavior?

Efficiency: Pareto Superiority is the gold standard [“A Pareto-superior transaction is one that makes at least one
person better off and no one worse off “] … but this is often impossible because most transactions involve externalities,
so we use Kaldor-Hicks Efficiency standard: “An outcome is more efficient if those that are made better off could in
theory compensate those that are made worse off (and thus lead to a Pareto optimal outcome).” This doesn’t require
actual compensation; merely the potential for it to have occurred.

        -    This kind of efficiency is especially important when some parties are non-consensually affected
        -    Posner: “Wealth maximization” … I value X at $5, you value X at $15, I sell it to you at $11, so $10 gains
        -    Assumes that people know what they want and act according to their preferences
        -    How do judges recognize KHE? Evidence = Voluntary Transactions (parties involved must be better off
             because otherwise they wouldn’t have transacted!) … where resources are shifted pursuant to voluntary
             transactions, we can be reasonably sure that the resources in question are more valuable post-transfer

Therefore assume that PRP is better than LRP because we assume that people are better able to value things than the
state. We want PRP when TC are low and only introduce LRP when TC are high. Our legal system deals with TC via tort
law, and low TC via property and contract law.

Criminal law gets involved when someone takes property under PRP, forcing the state to intervene in a situation with
low TC (and ergo the possibility of efficiency) and thereby transforming it into one with LRP (the state must guess costs,
thus decreased efficiency) … the state punishes such actions because instead of contracting, got the state involved
at significant cost. The criminal law designed to keep transactions consensual, which is good because this is the
only thing that we think makes people better off … which is important because we care about this kind of efficiency.

 Efficient Liability Rules

       Defined
         An efficient liability rule minimizes the costs of preventing accidents and insuring against those accidents that
            cannot be cost-justifiably prevented
       Two Generations
         First generation believed that tort law could be solution to market failures
             Insurance: Not a tort tax but an insurance premium;
             Deterrence: By forcing costs to be internalized accidents are deterred
         Second generation believed that tort law should be minimized because market solutions are superior
             Insurance: People already have insurance; don’t want additional costs
             Deterrence: Regulatory systems are effective; no need to internalize costs since markets are not failing
         See Product Liability

 Insurance / Loss Spreading
   Calabresi believed that costs should be borne by the party in the best position to lower those costs;
       This is the cheapest cost-avoider
       Tort law provides a system of insurance for market failures; manufacturs will internalize accident costs where
         they are able to prevent accidents, losses will be spread out, and deterrence will work

 Deterrence
   Specific Deterrence
       Placing costs on cheapest cost-avoider deters this defendant from engaging in inefficient conduct in the future
   General Deterrence
       The outcome of each caase will deter individuals in similar settings from engaging in similar conduct

Legal economists distinguish between distributional and efficiency concerns. Efficient rules, however, may have
different distributive outcomes. Tort theorists have generally focused more on corrective than distributional justice:
                                                             15
       -    Corrective Justice: Intended to restore the status quo for wrongful act (background distribution is
            presumed fair or irrelevant)
       -    Distributive Justice: Alter the status quo when background distribution is viewed as unfair or illegitimate

Legal economists argue that private civil wrongs are an improper mechanisms for fixing social problems,
generally prioritize efficiency over distributive justice. Kaplow and Shavell argue:

       1.   Legal rules are good at optimizing efficiency and incentives [increasing the total size of the pie]
       2.   “Tax and Transfer” should address distributional concerns [allocating slices of the pie]
                a. Legal rules are insufficiently precise and comprehensive to achieve goals of distributive justice
                           i. Imprecise because the groups affected are heterogeneous in income and ability to pay
                          ii. Non-comprehensive b/c only affects a small part of the population; much less than taxes
                         iii. It is not clear which group would be favored by the use of LRP v. PRP … depends on
                              context and what the specific distributive goal is
                                    1. Hanson: Yes, but we could say the same things re: efficiency … and if distributive
                                        goals are context-sensitive, just attend to context!
                b. Parties will simply contract around re-distributional legal rules
                           i. i.e. “landlord will raise grandma’s rent” problem [costs passed on to consumers]
       3.   Trade-off b/w efficiency and distribution: “If legal rules are chosen in part for distributional reasons,
            the goal of efficiency will sometimes be compromised, whereas distributional changes can be effected
            through modification of income taxes and transfers without sacrificing efficiency in the use of legal rules.”

We should be worry about the motives that might lead us to disregard or explain away distributional concerns:

       A. People are prone to believing that existing systems are just
              a. Leads us to explain away or disregard distributional characteristics (just world hypothesis)
              b. We should be super-aware of the need to attend to distributive justice
       B. We should see L&E schemas as problematic
              a. What exactly is a “legal rule,” as opposed to “transfer” or “taxes”?
              b. Is distributive justice focused solely on “wealth” equalization? What about “power”?
                        i. Tort provides the background rules against which people contract and can shape behavior
                       ii. The seeming clarity of L&E answers can be seductive, but often also illusory b/c based on
                           premises and schemas that many non-economists would reject
                      iii. Maybe by ignoring distributive justice as party of efficiency analysis, we actually do
                           achieve distributional ends – see which groups benefit from the naturalization of the
                           premises of classical economics [typically distribute to the elites b/c higher ability to pay]
              c. How to compare a single legal rule to “tax and transfer” … may the whole tort system, or the whole
                  system of private law, matches up more significantly to taxation?
              d. What about how tort rules change conduct throughout society? Legal rules resonate beyond cases!
              e. A leap of faith to say that tax/transfer works so marvelously and can deal w/ distributive justice
              f. It seems odd to say that we must do efficiency analysis because there are efficiency results to any
                  tort system … can’t we say the same thing about distributional justice?
       C. Do legal rules actually achieve efficiency? Does efficiency predict/explain outcomes?
              a. Look at Bird v. Holbrook + competing articles by Posner and Hanson
       D. What if we have multiple efficient outcomes? Can distribution break ties?
              a. Vosburg v. Putney: Trial court allowed testimony re: relative wealth/power; the Supreme Court
                  threw this out (no distribution!) … but this power disparity still seems crucial to the outcome
              b. Ploof v. Putnam: Assume no TC. Given distributive justice concerns, why substitute LRP for PRP?
                  Because w/ PRP, no gains to trade and no transaction – so no dock-usage … w/ lives on the line,
                  use LRP and let juries sort things out ex post [we don’t worry that willingness to pay might not
                  equal willingness to accept]
                        i. Is this really, purely efficiency? It sounds a lot like distribution.
                       ii. How could we use tax and transfer here, anyway? A tax credit letting people use docks?
                           Government-issued dock stamps? Doesn’t this seem like a legal rule?
                                1. As a judge, do you do nothing because a tax might be more efficiency as the
                                     solution to a problem? Or do you change the rules in common law to motivate at
                                     least some redress?

                                                          16
                         iii. Posner: “Suppose that pituitary extract is in very scarce supply relative to the demand and
                              is therefore very expensive. A poor family has a child who will be a dwarf if he does not
                              get some of the extract, but the family cannot afford the price and could not even if they
                              could borrow against the child’s future earnings as a person of normal height; for the
                              present value of those earnings net of consumption is less than the price of the extract. A
                              rich family has a child who will grow to normal height, but the extract will add a few
                              inches more, and his parents decide to buy it for him … in the sense of value used in this
                              book, the pituitary extract is more valuable to the rich than to the poor family, because
                              value is measured by willingness to pay; but the extract would confer greater happiness in
                              the hands of the poor family than in the hands of the rich one.”

An argument for taking Distributive Justice (DJ) into account:

        -   What might be the long-term dynamic effects of ignoring distribution in legal rulemaking?
                o We see increasing inequality of wealth, possibly connected to deregulation, L&E, etc.
                o L&E efficiency = Kaldor Hicks Efficiency
                           Total net gain; those who benefit could compensate those who suffer
                           Willingness to Pay reflects Ability to Pay … and WTP key to KHE … so wealthy people get
                               stuff and don’t have to compensate the poor, who don’t get stuff (but do get screwed)
                           So legal policies do have distributional consequences: they help those with lots of money
                o L&E says this is irrelevant – best addressed via “tax and transfer”
                o L&E also advances deregulation … argues that regulation increases TC and that we therefore
                     should prefer private transactions (b/c can increase efficiency more than government) (assumes
                     that we only trust individuals to get this right because they successfully maximize their subjective
                     utility in transactions) … also worries re: regulatory capture and government failure
                o L&E rarely maxes both of these arguments at the same time … banishes progressive views of DJ to
                     tax & transfer b/c banished from the realm of efficiency, but then we are told that the government
                     can’t be trusted to regulate or tax … so we have a tax/transfer system increasingly unwilling to
                     engage with DJ even as legal rules make those w/ the Ability to Pay even richer via KH efficiency
                o Put together, L&E arguments broadly increase inequality in society
        -   Given a belief in DJ, and given that the government necessarily redistributes wealth through whatever legal
            rules or tax/transfer system it creates, how to rethink a set of rules that systematically redistributes wealth
            upwards  a set of rules that work against rather than for the systematic causes of poverty and inequality?
                o Tort law an important part of this project
                o Rethinking the notion of capture  “deep capture”

Rethinking “Capture:

Absence of regulation is itself a form of regulation. Capture extends broadly on this view. There are plenty of people
with a stake in shaping regulations and how we think about regulation. Why just stop at administrative agencies –
extend the notion of capture to law school pedagogy, churches, media, etc.  giant struggles over how we conceive of
things and behave. Large and aggregated interests have major stakes here – our concepts of the person shapes our laws
and behavior and is therefore contested.

Consider: Very little discussion in L&E about how to make institutions more capture-resistant; our false view of
ourselves can lead us to trust or mistrust the wrong institutions; and we, like other animals, can change our situation –
thereby changing the thing that influences is in turn.

Some L&E folk argue for maximizing welfare, and including public welfare functions, that because of decreasing
marginal returns on wealth, would tend to favor some welfare-oriented redistribution. But it hard to determine things
like ‘welfare’ and ‘utility’ [system justification theory].

An Introduction to Law and Economics
By Robert Cooter and Thomas Ulen

Economics studies rational behavior, defined as the pursuit of consistent ends by efficient means.
       - This expansive definition allows us to apply legal analysis to legal officials, who are expected to act
           rationally and are criticized for acting irrationally

                                                           17
What is law and economics about?

      Example : A manufacturer contracts with an oil company to send oil from the Middle East, but war breaks out
       and the delivery cannot be made, costing the former a great deal of money in lost investment opportunities

           o   What are the consequences of different court rulings on how to allocate the loss in a case (e.g. when
               parties contract to something but do not provide for what will happen in the event of some loss)?
           o   From the standpoint of economic efficiency, the court should assign the loss so as to make future
               contractual behavior more efficient
                    The rule for doing this is to assign the losses to the party who can bear the risk of such a
                        loss at the least cost
                             It seems that the oil company should bear the costs of the loss, since they do business
                                 in the region and can more readily assess the risks, and they can also purchase
                                 insurance to guard against such incidents as this
                    This rule is economically efficient if it induces future contracting parties to write more
                        or better contracts than they would under any alternative rule
                             This rule also encourages future contracting parties to devise explicit allocations of
                                 the risk of loss if for whatever reason they would be made better off by an alternative
                                 allocation

      Example case: a factory emits smoke that dirties the clothes being cleaned at a nearby commercial laundry

           o   An economic analysis of nuisance has this focus: the determination of which of the two options
               faced by the court is more likely to promote the efficient use of scarce resources
                     Often times, the economic and legal approaches reach the same destination by different routes
           o   The Coase Theorem applied to this case: where the costs of concluding a transaction are very
               low, the rule of law will not affect the level of pollution or the amount of laundry cleaned; the
               amounts will be the same regardless of how the law resolves the dispute
                     Rational bargainers facing low bargaining costs will bargain until the exhaust the possibilities
                       for mutual gain, which occurs when total profits of the two enterprises are maximized
                     A mutually beneficial transaction is possible that allows the factory to continue its production
                       & pollution & also allows the laundry to be compensated for the loss that the pollution inflicts
                     In fact, both parties may be made better off; for instance, if the laundry would suffer a $5,000
                       loss from continued pollution and the factory would suffer a $10,000 loss from stopping
                       production, the factory may pay the laundry $7,500; both parties are better off
           o   If someone values an asset, then there is scope for mutual gain by exchange

      Example case: A commission has been appointed to consider reforming how white collar criminals are
       punished. Testimony convinces them to impose a fine instead of incarceration, and it determines that the fine
       should increase with the seriousness of the offense, but by how much?

           o   The risk depends upon the probability and magnitude of the punishment
           o   It can be shown that the most serious offense should be punished by the maximum fine that the
               offender can bear
                     Apparently it can be shown that it is never efficient from a social viewpoint to incarcerate any
                        criminal offender unless the ability to pay fines has been completely exhausted

Steps to economic analysis

1. Assume that the individuals or institutions who make decisions are maximizing well-known and clearly
specified economic objectives

2. Show that the interaction among all relevant decision-makers settles down into what economics call an
equilibrium

3. Judge the equilibrium on the criterion of economic efficiency


                                                         18
4. N.B. scientific method also requires testing the predictions of that analysis against the facts; there is still a
paucity of empirical evidence

       Brief history
             o By the 1940s, economics gained technical superiority over the other social scientists
             o Left to its own devices, the law stood no more chance of developing quantitative methodology than
                 Australia stood of independently developing the rabbit (haha)
       The modern economist is more interested in explanation than in description and uses sophisticated theories of
        economic behavior in these explanations
             o Many economists today confidently expect the recent history of economics to be repeated in the law
                       Economists have discovered an unoccupied niche in legal scholarship, specifically the absence
                          of quantitative reasoning, and are moving quickly to fill it
       What are the novel substantive claims of the economic analysis of law?
             o The central claim is that the fundamental economic concepts, such as maximization,
                 equilibrium, and efficiency are also fundamental to understanding and explaining the law; there
                 are several version of this view
                       Reductivism: the strongest claim is that the law can be reduced to economics by substituting
                          economic concepts for such traditional legal concepts as justice, right, duty, negligence, and so
                          forth. According to this claim, after the substitution is made, the legal language can be
                          jettisoned as excess baggage
                       Weaker than reductivism is the claim that economic concepts can be used to explain much of
                          the law but not to eliminate and replace legal concepts
                                E.g. the negligence rule of liability for certain kinds of accidents may be able to be
                                    explained as the means by which judges implement a social policy of minimizing the
                                    social costs of accidents
                       Claim: Economists can explain why courts and legislators make certain changes in the law
                                For example, economics might predict that replacing a negligence rule with one of
                                    strict liability for injuries caused by defective products will cause producers to invest
                                    additional resources in finding safer designs for products
                                This theory, when applied to the history of torts, leads to the hypothesis that the law
                                    will evolve toward more efficient rules
       The rules created by law establish implicit prices for different kinds of behavior, and the consequences
        of those rules can be analyzed as the response to those implicit prices
       Reasonable man (legal ideal) vs. rational man (economic ideal)
             o Rational behavior is the pursuit of consistent ends by efficient means, which allows for substantial
                 arbitrariness of ends; behavior can be rational even though the ends are anti-social & means immoral
                       However, pursuing anti-social ends or adopting immoral means is often seen as unreasonable
             o A reasonable person is socialized into the norms and conventions of a community, so his ends are
                 consistent with shared values and his pursuit of them conforms to group norms
             o The ideal decision-maker in law is reasonable and, therefore, conforms to these social norms
                       These norms usually includes those of economic rationality, such as consistency and efficiency
                       A person must be rational in order to be reasonable, especially in a legal context
       The fact that legal officials are expected to pursue consistent ends by efficient means implies that there is broad
        scope for legal theory based upon economic analysis
             o However, legal officials are subject to additional constraints and norms besides consistency and
                 efficiency, and this implies that economics cannot provide a complete explanation of law

Polinsky’s Auto Accidents (Law & Economics)

1) Bargaining in these situations cannot reach the efficient outcome b/c bargaining can’t take place in advance of
   an accident (driver hitting pedestrian)
2) But efficient rules can be derived by imagining what rules the 2 parties would have chosen if they could have
   gotten together before the accident and freely contracted
3) They would want to maximize their joint benefits net of their joint costs
4) Assume that, comparing benefit to driver against expected accident cost to pedestrian, the most benefit can be
   derived if the driver drives at moderate speed
5) Compare two alternative liability rules – effect on driver’s behavior


                                                            19
   a) Strict liability – driver made liable for accident losses regardless of his care; he will choose to drive moderately
      (efficient behavior)
   b) Negligence – driver will be liable for accident costs only if he does not meet some standard of care. Standard of
      care? = acting efficiently, thus driving at moderate speed. He will choose to drive at moderate speed (efficient
      behavior)
   c) *Conclusion: in accident situations in which the only issue is how to induce the injurer to take appropriate care,
      both strict liability and negligence are efficient, provided that liability equals actual damages if strict liability is
      used and the standard of care corresponds to the efficient outcome if negligence is used.
6) Compare two liability rules – effect on pedestrian’s care (walk/run – walk is efficient)
   a) Strict liability – pedestrian will be compensated for losses so will run instead of walk, but this is not efficient;
      this problem can be solved by adding a defense of contributory negligence
   b) Negligence – pedestrian will bear own losses (b/c driver will behave efficiently driving moderately) so will
      walk (efficient)
   c) *Conclusion: in accident situations in which the problem is to induce both the injurer and the victim to take
      appropriate care, a rule of strict liability w/a defense of contributory negligence or a rule of negligence (with or
      w/o defense of contributory negligence) is efficient.
7) The activity level issue
   a) The efficient level of participation in the dispute-creating activity is determined by comparing the benefits a
      party obtains from greater participation to the resulting increase in expected accident costs.
   b) In general the problem is how to induce both parties to take appropriate care and to engage in the activity to an
      appropriate extent
   c) Assume the efficient solution is driving “a little” (at moderate speed)
      i) Strict liability – leads driver to behave efficiently b/c will be paying
      ii) Negligence – efficient w/respect to driver’s care but not his level of participation in the activity (standard
           of care doesn’t take extent of activity into account)
   d) *Conclusion: in accident situations in which the problem is to induce the injurer both to take appropriate care
      and to participate in the activity at an appropriate level, strict liability is efficient. Negligence is also efficient if
      the standard of care encompasses both the injurer’s care and his level of participation in the activity. But if the
      standard does not include injurer’s activity level, then negligence rule will lead to excessive participation in the
      activity  negligence is inefficient.
8) The administrative costs of each rule
   a) Negligence – fewer cases, but higher cost of resolving each case (have to figure out the injurer’s standard of
      care PLUS damages)
   b) Strict liability – more cases, but lower cost of resolving each case (just have to figure out damages)

                       Legal History: Revolution and Counter-Revolution

                             A long history of contest of tort law;
             any given outcome must be seen as contingent, contested & malleable.
Early 19th CE and before, no distinct body of tort law – more a hybrid of contract & criminal law. By the mid-19th CE, an
increasing number of tort-like cases resulted from industrialization, urbanization, new modes of transport  much
more death and injury landing in court. Three kinds of harms vied for recognition as torts: (1) Harms with malice; (2)
Harms caused by fault/negligence; and (3) Harms without intent or negligence, but with great resulting harm (i.e.
dangerous workplaces). Pressure built with powerful (and not-so-powerful) interests on both sides. The economy was
poised midway between agriculture and industry … 1/50 workers killed or injured each year … eventually, negligence
emerged over strict liability as the standard. This happened mostly in local courts. Meanwhile, Langdell created the
case method, put Torts as part of the core curriculum. In this period, tort law recognized intentional torts (malicious
intent or recklessness) and negligence (fault-based liability). Workers had little recourse to tort law for compensation.

In the 1970s, an uptick in willingness of appellate courts to hold defendants liable

                  o   Shift from negligence  strict liability standards
                  o   Harder to argue consent
                  o   More willingness to include pain & suffering in damages
                  o   Expanded notions of causation


                                                              20
Texas one of the first states to pass significant “tort reform” legislation in response to this trend, condemning ‘frivolous
lawsuits’ and calling for a heightened threshold to confront plaintiffs.

Also since the 1970s, a shift from contributory  comparative negligence defense (leading some judges to favor strict
liability + assumption of risk a bit more because of the subtlety of judgment required of juries when they had to deal
with assumption of risk AND comparative negligence defenses at the same time).

Until the 1980s, a general increase in vicarious liability and attention to situational factors … “enterprise liability”
encouraged tort law to look at systems, not just individuals … this tide has ebbed over the past few decades, in part
because of the Law & Economics movement

      At the roots of every ideology there are premises about the nature of causation, the agents of
                  causation, [and] the appropriate ways for explaining complex events
1960s/70s: Situationist Revolution in Products Liability

        -    We can imagine four possible liability standards
                o Absolute consumer liability
                o Negligence [B < PL] … Under negligence, a manufacturer is liable for injuries if and only if the
                     accident was initially preventable. The consumer bears all other losses. (consumer pays except
                     where manufacturer can prevent harm cost justifiably and at less cost)
                o Strict Liability (Strict liability places liability on the manufacturer for all but residually preventable
                     accidents) (manufacturer pays for everything, except where consumers can do so cost justifiably
                     and at low cost)
                o Absolute Manufacturer Liability

        -    Each standard is mutable: It might be mutable by contract or it might be mandatory




        -    Winterbottom v. Wright (1842) [Absolute Consumer Liability] [Contract, not Tort]
                 o Plaintiff not covered because he chose not to make himself a party to the contract
                 o Caveat Emptor … launched common law rule that no recovery occurs without privity/contract to
                     provide a warranty of safety … injuries seen as controlled by contract not tort … blame-frame
                     toward victim, attributes control to plaintiff
                 o Winterbottom was seriously injured when the mail coach he was driving collapsed because of poor
                     construction.
                 o Winterbottom’s case was promptly dismissed because of the “general rule” that a product seller
                     cannot be sued, even for proven negligence, by someone with whom he has not contracted – that
                     is, someone with whom he is not “in privity.”
        -    Exception to Winterbottom = “inherently dangerous” defective products and mislabeled poisons

                                                             21
-   MacPherson v. Buick (1916) [Negligence] [Contract  Tort]
        o Cardozo: “If the nature of a thing is such that it is reasonably certain to place life and limb in peril
            when negligently made, it is then a thing of danger and subject to a tort duty.”
                  “We have put aside the notion that the duty to safeguard life and limb, when the
                     consequences of negligence may be foreseen, grows out of contract and nothing else. We
                     have put the source of the obligation where it ought to be … in the [tort] law.”
        o Buick had knowledge and control, it could have done something, therefore it is liable
        o A general climate of increased distrust of corporations
-   Escola v. Coca Cola (1944) [Strict Liability] [Concurring Opinion]
        o Drew heavily on Prosser’s work, influenced ALI to change the Restatement (Second) of Torts
                  §402(a) in 1965 Restatement pushed almost all the way to Enterprise Liability
        o Traynor: “Even if there is no negligence, . . . public policy demands that responsibility be fixed
            wherever it will most effectively reduce the hazards to life and health inherent in defective
            products that reach the market.”
        o Tort Law pushed into boxes 4, 6, and 7 through 1960s/1970s … almost at 8 [enterprise liability]




-   Intellectual Premises of this Tort Revolution [unexamined by legal realists b/c seemed self-evident]
        o Consumers lack perfect information and are uninformed re: product risks
                  Consumers had inadequate information about product risks not only because consumers
                     lacked information, but also because manufacturers, whose incentive was to foster
                     consumer “optimism,” actively misled them through advertisements that reduced
                     consumer risk assessments
                  More generally, an information asymmetry as between consumers and manufactures
        o Exploitative manufactures market power
                  Big versus small, Knowledgeable versus ignorant, Aggregated versus disaggregated, Long-
                     term versus short-term, Rich versus poor
                  In present-day commercial life the standardized mass contract has appeared. It is used
                     primarily by enterprises with strong bargaining power and position
        o As between parties, manufacturers are more aware of risks and can do more to prevent it …
             also, manufacturers are more deferrable and have a narrow interest
                  Traynor: “It is evident that the manufacturer can anticipate some hazards and guard
                     against the recurrence of others, as the public cannot. Those who suffer injury from
                     defective products are unprepared to meet its consequences. . . . [T]he manufacturer . . . is
                     responsible for [the product] reaching the market.”
                  M can do much more than C to prevent harm [M is the least cost avoider]

                                                   22
                            Consumers are already incentivized by fear of being harms; Manufacturers require the
                             additional monetary incentive imposed by tort law
                                   Current L&E disagrees, claiming that consumers are in control, can prevent injury
                                       easily, and are incentivized to “win the tort lottery” by getting harmed
               o Risk distribution [tort law as insurance]
                         M better positioned than C to spread the losses from product-caused injury by
                             incorporating it into the price, buying liability insurance, diffusing costs across the range
                             of consumers, etc.
       -   Workers’ compensation statutes lent support to calls for strict liability
               o Originally used tort law to hold individual negligent employers accountable, but injury rates kept
                    increasing … a realization that safety was best addressed by incentivizing institutions to change
                    SYSTEMS over which they have control
       -   Part of a larger cultural and social movements
               o Sense in New Deal America that Big Business menaced freedom, liberty, and equality
                         “Against economic tyranny such as this, the American citizen could appeal only to the
                             organized power of government. The collapse of 1929 showed up the despotism for what
                             it was.” [FDR]
               o Civil Rights, Female Rights Movement, Environmentalism [Silent Spring]
                         We’re doubly-bound
                         We’re screwed by existing categories and schemas
                         Stop blaming us for them
                         Challenge to coping mechanisms re: injustice dissonance
                         Debates over identity, markets, nationalism, etc
               o A larger shift toward seeing structures that shape social reality … focus on systems to improve
                    society and increase social justice

The Cigarette Industry Case Study [Key Points]

       -   Perceived risks were slight initially … eventually a competition over attribution stories
       -   Enlisted big, new post-WWII PR agencies as part of a grand alliance within cigarette industry
       -   1955-1975: Not a single successful tort case [all failed b/c of assumption of risk or causation defenses]
       -   Insider documents discovered in the 1990s put a major dent in efforts to blame smokers
                o Also used plaintiffs, like flight attendants, who did not ‘assume’ risk by choosing to smoke
       -   DOUBT: The industry did everything possible to create doubt about the facts, to attribute industry conduct
           to good situation, to call for more research, and to point out consumer choice within ambiguity
                o Enlisted credible 3rd parties in law, academia, and government
                o Reassure doubters by using these surrogates
                o Called opponents “extremists,” presented themselves as reasonable and scientific
                o Destroyed their own studies that proved a connection or correlation
                o Smokers believed this, non-smokers didn’t [manipulated cognitive dissonance]
                          By creating doubt, the industry motivated attributions to dominate … non-smokers had
                             little sympathy for smokers, who the saw as idiots freely-making bad choices
                          “Create doubt about the facts without actually denying them.”
                          People are already smoking – we need to give them a justification to allay their ears
                o Actively tried to manipulate risk perception and assessment [
                          Don’t Eat (and get fat) – instead, smoke!
       -   FREEDOM: Self-consciously allied with libertarian opinion leaders to shift the fight to one about
           government intrusion into people’s lives … cast tort law and government regulation as infringements on
           liberty. Cigarettes = Freedom.
                o Presented smoking as a pre-formed preference [only question = which brand!?]
                o Argued that advertisements should not, therefore, be regulated [just a battle among brands]
       -   GENDER and CHOICE: Early advertisements tied freedom, choice, body, image, and gender roles
                o “Cigarettes are like women: the best ones are thin and rich”
                o Launched brands and advertisements aimed at women in 1967 … a few decades later, a major
                    increase in lung cancer rates among women [even higher than breast cancer]
       -   COUNTER-REVOLUTION: The fall-off of tort litigation in the 1980s resulted in significant part from the
           discovery by other industries that doubt, choice, liberty, etc. are an effective means to “deep capture” vis-à-
           vis views of the person, causation, etc. A shift toward Dispositionism – easy, simple explanations, plus clear

                                                          23
            reform proposals, hard to disprove, cognitively easy, resonance with nationalist rhetoric, system-affirming,
            palliative, satisfies injustice dissonance, and all in the interest of powerful industries.


Counter-Revolution in Tort Law: Since 1980s




A push away from Box 8, general trend toward negligence. More deference to warranties (so move to lower
numbers on the mutability dimension). Reduced damages. Higher causal thresholds required to create liability.

        -   Urged by the Chicago School of Law & Economics Tort Scholars
                 o Alan Schwartz
                 o Richard Epstein
                 o George Priest
                 o Peter Huber
        -   These scholars rejected the claims of the first generation, saw markets as a remedy for most ills [an
            efficient non-tort system of deterrence], saw total rational choice.
        -   Their logic pushes inevitably toward Box 1 [ACL].
        -   Motivated by a choice-frame – debates over attribution [Who has control? Knowledge? Who to blame?]
        -   We should blame the victim more often! Need a culture of responsibility!
        -   A largely dispositionist critique, similar to and in sympathy with the cigarette strategy

Political and Intellectual Support for Dispositionism in the 1980s

        -   Mont Pelerin Society
        -   “After World War II, in 1947, when many of the values of Western civilization were imperiled, 36 scholars,
            mostly economists, with some historians and philosophers, were invited by Professor Friedrich von Hayek
            to meet at Mont Pelerin, near Montreux, Switzerland, to discuss the state and the possible fate of liberalism
            (in its classical sense) in thinking and practice.”
        -   Statement of Aims:
                 o “The central values of civilization are in danger. Over large stretches of the earth’s surface the
                      essential conditions of human dignity and freedom have already disappeared. In others they are
                      under constant menace from the development of current tendencies of policy. The position of the
                      individual and the voluntary group are progressively undermined by extensions of arbitrary
                      power … The group holds that these developments have been fostered by . . . a decline of belief in
                      private property and the competitive market; for without the diffused power and initiative
                      associated with these institutions it is difficult to imagine a society in which freedom may be
                      effectively preserved.”
        -   Inspired by Ludwig von Mises, an Austrian economist: “Man is a being capable of subduing his emotions
            and impulses; he can rationalize his behavior. He arranges his wishes into a scale, he chooses; in short, he
            acts. What distinguishes man from beasts is precisely that he adjusts his behavior deliberately.”
                                                          24
        -    Equated freedom with individual choice
        -    Hayek et al., drawing on Mises, emphasized that MAN IS RATIONAL … advanced the notion that there exists
             an essential connection between Markets, Choice, and Freedom.
        -    Ronald Reagan – “The Magic of the Marketplace”

The Torts Crisis

       The “tort crisis” started as an increase in tort claims and liability in the 1960’s, during a larger trend toward
        situationism. Marginalized groups were challenging traditional socio-legal arrangements
        (laws/customs/social roles). They challenged the notion that people’s “place” was because of their disposition.
        They argued that they were suffering because of situational conditions designed to keep them in their “place”
       The situationist trend threatened many schemas/categories: identity groups, markets, nationalism, and
        religion. The people who felt threatened (those with a stake in the current system: commercial interests,
        socially dominant groups) were those with a dispositionist attitude: injustices are small and attributable to a
        few bad actors, the system is basically OK, the real problem is the social unrest, not the grievances motivating
        it. Those who challenged the system had more situationist views: the system is unjust, the injustice results
        from distributions of power, extreme methods of building unrest are necessary to expose underlying problems.
       This discussion of ways to deal with problems is analogous to the debate over tort law. The customary means
        of solving disputes (social norms) had failed. More extreme methods (lawsuits) were required to attract
        people’s attention to the problem. Lawmakers were forced to think situationally. Traditional hierarchies
        collapsed, authorities of parents/bosses were replaced by “experts”—law began to fill social space previously
        occupied by manners and mores. Explosion of legalism and legal regulation, which is undermining itself as the
        losers of disputes challenge decisions.
       A backlash arose—a desire to roll back tort law and a desire to roll back situationist ideas, put the focus back
        on choice. There is a dominant script that tort law is out of control. Each side uses different schemas (the
        innocent small business owner, OR innocent victims vs. evil corporations). There is the idea that people are
        being instilled with fear about the legal system and thus they act more defensively. But aren’t the people
        raising “awareness” about the tort crisis also instilling us with fear?
       During the tort crisis (at least the beginning), dealing directly with data and confronting arguments to come up
        with policy solutions was not what was moving the tort debate. And still today, empirical data is not relevant.
        It’s not a “fair fight”—what’s centrally important now (and to this class) is how groups have made it an unfair
        fight. The tobacco example shows us how attributions were switched. The industry was initially extremely
        successful because it created doubt about causal connections, advocated free choice (important schema).


                                 The Nature and Purposes of Tort Law
4 Basic Elements: (1) Duty; (2) Breach [intentional, reckless, negligent, strict liability]; (3) Causation [“but for” or
“substantial factor” and “proximate”]; (4) Damages

       Purposes of Tort Law
           o The purposes underlying the law influence and reflect the values/priorities of the specific culture, as well as
               attribution; what is the purpose of American tort law?
                     Deterrance
                     Expression of Blame (Attribution)
                     Compensation
                     Allocation of Costs
                     Alternative to Self-Help
                     Efficiency (“minimize costs of accidents”)
                     Corrective Justice (“nullify wrongful gains and wrongful losses”)

A tort is what a court says it is. We must look to see where tort law’s boundaries are set.

        -    The conventional approach looks out from within tort law … “equipped with a command of tort law’s
             doctrines and all of its best-known cases, scholars and judges peer outward,” missing or ignoring what
             happens with non-tortious harms and failing to observe non-doctrinal boundary-shaping dynamics
        -    Too easy to concoct ex post explanations/justification for status quo that give it normative force
        -    We imagine that tort law has a disposition, and that we can come to understand this through case law

                                                              25
        -    The time has come for a different approach
                o We should instead look inward from outside existing boundaries
                o Recognize that conventional schemas for the human animal are fundamentally flawed
                o Look to silent biases that shape attributions of causation, responsibility, and blame

Dimensions of Tort Law:

        1. Liability: When does defendant fail the standard of care? [negligence v. strict liability]
        2. Mutability: Holding injurer’s behavior constant, when did defendant increase or decrease the risk of it
           happening? [consent/contributory negligence/assumption of risk]
        3. Damages: What damages must defendant pay?
        4. Causation: What standard is applied to satisfy this element of a tort claim?

Double Bind: When a situation imposed upon someone limits choice to selection among two or more evils, any of which
might then be said to be freely chosen if misperceived through a dispositionist frame

Socials Norms and Tort Law:

        -    Ellickson’s Norm Theory: “Disputants are increasingly likely to turn to legal rules when … the social
             distance between them increases, [and] when the magnitude of what is at stake rises.”
        -    Hankavy Hypothesis: two intuitive social norms = strict liability and neighbors don’t sue each other
        -    Wayne Logan: “Cities – with their heterogeneous populations, diverse interests, and complex social
             organization – represent classic realms in which social controls are potentially at their most lax, increasing
             the practical need for explicit legal controls.”
        -    Donald Black: “Law is stronger where other social control is weaker” … “[Law] varies with every other
             kind of social control. Thus, it varies across the centuries, growing as every kind of social control dies away
             – not only in the family but in the village, church, workplace, and neighborhood.”
        -    Marc Galanter: “Litigation occurs where it is less costly in terms of its disruption of valued relations –
             particularly multiplex and affective ties. And the absence of such ties makes it less likely that alternative
             remedies – either mediators or reputational networks with shared norms and sanctions – are available.
             But where disputes are about control of irreplaceable resources (land, power, reputation), disputants may
             be willing to sacrifice valued relationships and pursue the drastic remedies of litigation rather than resort
             to indigenous remedies” … “Is more and more visible litigation the sign and agent of the demise of
             community? This view of litigation as a destructive force, undermining other social institutions, strikes me
             as misleadingly one-sided. If litigation marks the assertion of individual.” will, it is also a reaching out for
             communal help and affirmation.”

Explaining Tort Law:

        -    The first major positive theory: Francis Bohlen’s “Benefit Theory” (1920s)
        -    Why do we even care about generating a positive theory here?
                 o Basic human need to predict and, perhaps, control.
                 o Virtually everyone these days has a positive theory of tort law – and that frame influences what
                      they see and how they interpret and remember what they see.
                 o Clearly, lawyers and judges need a positive theory of tort law.
                 o In addition, if one can figure out what is moving tort law, that can have significant normative
                      implications – both because there is a tendency to conflate the two and because, the two should
                      correspond (otherwise, there is a problem).
        -    Law and Economics presents itself as the most promising positive theory of law extant
                 o Posner: “While anthropologists, sociologists, psychologists, political scientists, and other social
                      scientists besides economists also make positive analyses of the legal system, their work is
                      insufficiently rich in theoretical or empirical content to create serious competition.”
                 o See Vincent v. Lake Erie and Ploof v. Putnam for instances of L&E attempting to explain tort law
                 o Posner and Landes: “We shall try to show that the common law treatment of intentional torts can
                      be explained on the hypothesis that the common law attempts to promote efficiency.”

Shallow Capture: Traditionally conceived ability of industry to prejudicially influence/manipulate regulators to its
own advantage [Chicago School made a big deal out of this to critique regulators … contrast with ‘free’ market]

                                                             26
        -   In tort law, “industry” = plaintiffs bar or big business; “regulator” = judges
        -   “New Politics of Judicial Elections” in 200, 2002, 2004, and 2006 [Brennan Center]
                 o Hard to see courts as neutral or insulated in light of all the money flowing into elections
                 o More than just merit shapes who gets to shape tort law
                 o “Judicial Philosophy” predicts outcome; ergo can be subject to “capture”
                 o Both sides deny that they are captured, believe that their opponents are
                 o Rational acting corporations wouldn’t spend all this money for no reason – they expect results
                 o Focus on making institutions more capture resistant
        -   Both sides of many issues tend to see the other as biased or captured, but not themselves
                 o Self-Enhancement: We think of ourselves as rational
                 o Naïve Realism: We think we’re right, so those who disagree with us must be under the influence
                      of outside forces [we try to persuade with reason and information]
                           Failure to persuade leads to a dispute cycle  we see others who disagree after hearing
                               our reasons as unreasonable, and then tell stories about the other person to explain their
                               unreasonableness
        -   In ads for judicial elections today, a common move = “this judge is captured and lets criminals go free!”
                 o These ads are often financed by businesses concerned w/ tort/labor/environmental law
                 o Argues that leniency toward out-group members means criminals can get you
                 o Increased system threat  Increased political conservatism and Dispositionism
                 o Criminal law easier to scare with than straightforward attack ads re: tort law
                 o Dispositionism is often wrong as an attributional style – highly under-inclusive, sometimes a
                      cover to explain behavior with stereotypes … dispositionists see freedom and equality where it
                      doesn’t exist … and is correlated strongly with both conservatism and republicanism

Intentional Torts/Self-Defense

1) Doctrinal Overview
   a) Intentional tort  D intentionally commits all elements that define the tort. D desires or is substantially
       certain the elements of the tort will occur. D need not intend harm, only harmful/offensive conduct (Vosburg).
   b) Assault – D intentionally causes victim’s reasonable apprehension of immediate harmful or offensive contact.
   c) Trespass to chattel – intentional interference with another’s right of possession to his property. D’s actions
       intentionally damage the chattel, deprive possessor of its use for a substantial period of time, or totally
       dispossess chattel from victim. There is no bad faith requirement for D’s actions.
   d) Conversion – intentional interference w/chattel of another that interferes with owner’s rights so seriously that
       the actor may justly be required to pay for the full value of the chattel.
2) Privileges to intentional torts
   a) *Consent – a defense to intentional tort liability. If potential victim gives permission, otherwise tortious
       conduct is instead considered privileged. (O’Brien) Consent can be conveyed expressly or implied. Consent can
       be held invalid if individual lacks capacity to consent or if actor goes beyond consent manifested.
   b) *Self-Defense – a defense to intentional tort liability. Reasonable force can be used where one reasonably
       believes that such force is necessary to protect oneself from immediate harm. (Courvoisier) The reasonable
       force cannot be intended or likely to cause death or serious bodily harm. The reasonable belief of imminent
       harm does not have to be correct, just reasonable.
   c) Defense of others – can only be used when the actor reasonably believes a third party is himself entitled to
       exercise self-defense.
   d) Defense of habitation – the use of deadly force against a home intruder is not justified unless the safety of the
       occupants is threatened (modern view).
   e) *Necessity – allows a defendant to interfere with the property interests of an innocent party to avoid a greater
       injury. (Ploof, Vincent) The defense is justified because the action will minimize the overall loss suffered. (Law
       & Econ) Private necessity exists, but it is an incomplete defense; the defendant is privileged to interfere, but is
       still held liable for the damage caused. Necessity: “may be invoked as a privilege when D, in the course of
       defending himself or his property from some threat of imminent serious harm for which P is not responsible,
       intentionally does some act reasonably deemed necessary toward that end, which results in injury to P’s
       property and which otherwise would have been a trespass.”
3) More on self-defense: objective vs. subjective perceptions of threat
   a) The appearance of attack must be objectively judged (reasonableness standard), on the basis of the facts
       known to the defendant. D’s unusual or irrational fears cannot justify self-defense attacks. Yet this is

                                                           27
meliorated in practice by the recognition that even the hypothetical reasonable person cannot make a perfectly
cool judgment about the force needed in an emergency.

Insurance and Tort Law: State Farm Fire and Casualty Co. v. S.S. & G.W.
-   Insurance screws with standard tort law incentives
-   It is hard to deter behavior by forcing internalization of costs if insurance covers the relevant harm
-   First Part Insurance: (1)  (2) [i.e. medical care]
-   Third Party/Liability Insurance:




-   This is one, big happy relationship until something goes wrong … then insurers are not keen on paying;
    insured is also frequently unhelpful [doesn’t notify the insurance company properly, doesn’t help the
    insurance company fight the lawsuit] … insurers try to create contracts that impose duties on part of the
    insured … judges get active in making insurers pay up [can win punitive damages for bad faith]
-   Plus, a moral hazard issue [insured will change behavior by virtue of having insurance coverage]
-   Standard contractual exclusions for intentionally inflicted harms
        o Moral hazard issue … presence of insurance can change behavior to increase risk … insurers are
             good at probabilities, but dislike when people intentionally bring about harmful outcomes [acting
             at 1/1 when premiums assume 1/1000].
        o Adverse Selection: As the pool risk increases with members added, the price of insurance goes up;
             low risk people don’t want to subsidize the rest with their premiums, so only high risk people stay
-   This case shows how insurance can screw with normal tort incentives
        o In theory, GW would be sued by SS, be defended by SF, and SF would pay relevant damages
        o In reality, SS seeks compensation  GW goes to SF  SF says this was intentionally-caused and is
             ergo excluded from coverage  SF does offer legal counsel  GW rejects this offer [two reasons:
             implicit gives up claim that this was not intentional, and counsel has no incentive to argue
             zealously other than general fiduciary duty]  GW hires an attorney  GW & SS agree to settle …
             GW to pay SS $1 million, but SS makes no claim on this – instead, both join GW in suit against SF
             with an agreement that she gets 1/3 of total payout [b/c GW not wealth – better 1/3 of a real
             payment than a million nonexistent dollars]  GW and SS are now allies against SF  SF strikes
             first, suing GW and seeking a declaratory judgment  GW and SS file a counterclaim against SF
        o Under-litigation of claims: Yes, I’m upset – but not so angry that we should hold the guy
             intentionally liable (b/c that would prevent access to insurance funds) … SS wants the court angry
             enough at GW to see what he did as a harm, but no so mad that it finds intent to harm
-   Other issues with Insurance
        o Interferes with corrective justice goal of nullifying wrongful gains and wrongful losers
        o Capture: insurance industry and plaintiffs bar have huge affects on tort law … both groups are
             powerful, with lots of $, and have a strong interest in this area of law
                   Insurance Industry: Tort law out of control, reckless, awful … wants people to fear
                       lawsuits, make torts loom and seem scary/random … this increases desire for insurance …
                       portray random, significant threat of evil plaintiffs and lawyers to increase demand
                            Blame the tort system for increased premiums (whatever the real cause)
                            But actually, want to make it really hard to recover in tort [then get to raise
                               premiums while decreasing pay-offs for recovery]
                            People who get sued are good – doctors, small businesses, like us!

                                                   28
                              Plaintiffs Lawyers: Tort system works great, can win huge, guards against bad, evil,
                               soulless corporations … no way to stop bad things, but can at least suit
                                     Want to make suits seem just and legitimate, so portray bad actors and make it
                                         seem easy to win (but only against bad people, of course)
                              If these interests didn’t see a battle here, why else would they spend so much money!

Epstein’s the Institution of Insurance

1) Focus on at least 3 actors: the accident victim, the insurance company, and the insured
2) The basic problem is that an insurance contract b/w a defendant and its insurer must regulate not only the
   relationship b/w the parties but also their joint relationship to the injured plaintiff whose claim against the insured
   is typically paid for by the tortfeasor’s insurance.
3) There are strains on auto insurance coverage today- pressures from more frequent claims and larger
   verdicts/settlements fuel an increase in premiums
4) Ordinary liability policy provides that the company will pay on behalf of the insured all sums the insured becomes
   legally obligated to pay for personal injury or property damages. It ALSO provides that the company shall defend
   any suit alleging such bodily injury or property damage—even if any of the allegations of the suit are groundless;
   but the company may make such investigation and settlement of any claim/suit as it deems expedient. Two key
   consequences: (1) insurer obligates itself to handle the claim and to defend against it even when the risk of ultimate
   liability is low. (2) insurer contains control of both litigation and settlement.
5) These consequences underscore a practical benefit in having liability insurance: an experienced party is in charge
   of litigation. But, the insurer will not take on the risk of infinite liability, but will impose limits on its assumed risk.
   These limitations create a conflict of interest b/w insurer and insured. The major source of conflict arises in setting
   the scope of the duty to defend and enforcing insurer’s obligation to settle in good faith.

                      Worker’s Compensation: Kerans v. Porter Paint Co.
History of Workers’ Compensation

                 o    Significantly, this compromise received overwhelming support from employers, employees, labor
                      unions, and the insurance industry. The support by employers for workers' compensation has
                      been attributed in part to the need to ensure labor peace, but most commonly to the fact that it
                      essentially cost employers nothing
                 o    Initially, the cost to employers of workers' compensation insurance was practically eliminated by
                      reductions in wages paid to employees, and by passing some of the cost to consumers. Workers, on
                      the other hand, did not oppose a reduction in wages because, in return, they received the certainty
                      of recovery for work-related injuries and avoided the uncertainty of tort litigation
                 o    Exception: One common exception concerns intentional torts committed by the employer or
                      sometimes even by an employer’s agent.

Workers’ Compensation versus Tort Law




                                                             29
Workers’ Compensation with Intentional Tort Exception




1) Workers Comp Provisions
   a) Liability
      i) Strict liability for injuries “arising out of and in the course of employment”
      ii) “No-fault” system a substitute for tort law; exclusive remedy
   b) Mutability
      i) Compulsory for large employers; employees lost tort option
      ii) Employers gave up their defenses (no assumption of risk)
   c) Damages
      i) Less than “made whole”, but easy to measure
      ii) No pain and suffering; employees receive scheduled amounts to cover medical needs and wage losses, up to a
           limit
   d) Administrative Costs
      i) Very low in comparison with tort law
      ii) No need to establish fault, though “course of employment” poses a problem
   e) Intentional Torts Exception
      i) Some states recognize exception; intent to harm may be necessary, or just substantial certainty of harm resulting

                                     Sexual Harassment & Feminism
O’Brien v. Cunard: Feminism Article by Chamallas

       Three Moves

            Eliminate codified gender distinctions between men and women
              Breach of cost of marrying; Loss of spousal consortium
            Examine supposedly gender neutral rules for a hidden/unintentional male bias
              Bystander harm & Emotional distress (favor property injury over emotional)
            Look to specific experience of women – is it included in the law?
              Change of view that led to recognition of sexual harassment in law

       Five General Moves

            Women’s Experience
            Implicit Male Bias
            Unpacking Women’s Choices
            Reproducing Patterns of Male Domination
            Double Binds

       Feminist critique comes looking for trouble, unlike L&E and Corrective Justice, which are more concerned
        with ‘making sense’ of law by finding its inherent logic
         Feminists viewed with great suspicion and hostility
                                                            30
         Look for different standards or disparate outcomes affecting particular groups uniformly
       Implicit motives lead us to tend to resolve ambiguity in particular ways
         Motives = injustice dissonance, implicit bias, system justification
         Ambiguity = control, causation, responsibility, knowledge

Kerans v. Porter Paint Company

        -   Feminist Critique: Double Bind
               o Key exception to workers’ compensation exclusivity provision: intentional torts.
               o Key exception to vicarious liability: intentional torts.
               o Though there are exceptions, there is a basic Catch-22 here for this type of case:
                         If the tort was non-intentional, then very likely to be precluded by worker’s
                            compensation;
                         If the tort was intentional, then the plaintiff might be able to avoid that hurdle but then is
                            likely to be caught up on the scope of employment element of vicarious liability.
        -   Feminist Analysis of Sexual Harassment
               o Duncan Kennedy: “Tolerated Residuum” = gap b/w socially versus legally unacceptable behavior
                         Protects defendants by recognizing the complexity of their situation
               o Employer plays a big role in shaping workplace dynamics – an argument for strict liability?
               o Where should burden of proof be? We now place it on the victim – why? For good reason?
               o How might these laws affect hiring incentives? Hire more men? More women?
               o “Scope of Employment” seems unclear … nobody is hired to sexually harass others
                         Sexual harassment often seen as occurring along a continuum of sexual behavior, but this
                            over-includes some sexual comments and under-includes a range of harrassful, gendered,
                            non-sexual language
               o Any case in torts without a finding against defendant  Strict Liability for plaintiff (given
                   causation and actual injury)
               o Tort law becomes hard where challenges exist to the dominant account of how we should react to
                   events … this “grey area” raises questions about power, remedies, rights, etc.

Chamallas’ Introduction to Feminist Legal Theory

 Feminists assume that the law’s treatment of women has not been fair or equal and that change is desirable. It
  assume there is a problem and is suspicious of the status quo.
 Feminist critiques of the law (1) try to describe the problem of women’s subordination; (2) analyze how
  (mechanisms) and why (reasons); and (3) advocate for change.
 Feminist legal scholars make “five opening moves.” These five “moves” are theoretical tools that legal feminists use
  to critique legal doctrines and categories. They enable feminists to think more deeply about the basic concepts of
  equality, difference, and diversity that continue to shape law and legal discourse.
   Focus on women’s experience. This is useful in identifying exclusions in the law (injuries that have not been
       recognized by courts or legislatures or have been minimized because women’s experience is not adequately
       expressed in the law). It can show that what is harmless or good from one person’s viewpoint can be harmful
       or serious when seen from the eyes of the victim (e.g. harassment)
   Look for implicit male bias. Feminists seek to uncover male bias and male norms in rules, standards, and
       concepts that appear neutral or objective on their face. Implicit male bias can be revealed by examining the
       real life impact of laws on women as a class, paying particular attention to how even non-controversial legal
       concepts and standards tend to disadvantage women. Bias can refer not simply to practices deliberately
       intended to hurt women, but also to practices which have an unintended negative impact or effect.
   Look for double binds and dilemmas of difference. Double binds are situations in which options are reduced to
       a very few and all of them expose one to penalty, censure or deprivation. Women constantly face dilemmas in
       which they are forced to predict which less-than-ideal course of action will prove least hazardous. Many are
       forced to conform simultaneously to conflicting stereotypes.
   Analyze how patterns of male domination are reproduced. (Beware of the illusion of progress.) Reforms in
       formal doctrine might not actually help women’s situation.
   Look out for dispositionism that legitimates apparent “choices”. Many who endorse gender equality still resist
       the idea that discrimination is the cause of women’s equality. Instead, women’s subordinate status is often
       ascribed to women’s own choices, and women are held responsible or blamed for their own disadvantages.
 There have been three stages of feminist legal theory.

                                                          31
       Equality stage of 1970s
         Emphasis on women’s similarity to men
         Goal: dismantle intricate system of sex-based legal distinctions which had been established purportedly to
             protect women
         B/c women are the same as men in all relevant respects, they deserve access to all public
             institutions/benefits/opportunities on same terms as men
         Associated w/liberal feminism – individual autonomy and choice
       Difference stage of 1980s – MacKinnon
         Realization that legal reform along equality lines would not cure substantive inequality that besets
             women’s lives
         Men and women are different
         Equality should not mean identical treatment but identical results, which might call for unequal treatment
             (move #2: implicit male bias has disproportionately large effect on women, even if treatment is “equal”)
              Desire for substantive, not just formal, equality
         Desire to change gender norms in law and society
         Emphasis on sexuality, which is socially (not biologically) constructed
         Critique of liberal feminism: legal concepts legitimate the status quo
              CLS critique of liberalism in general – emphasis on individual autonomy and separation of law/politics
                  is an impediment to radical social change
              CLS belief in indeterminacy of legal rules and the internally contradictory nature of legal rights  b/c
                  rules are indeterminate, legal decision making is mostly political
       Diversity stage of 1990s and beyond
         Critique of gender essentialism
         New focus on diversity among women (e.g. race, sexual orientation) that affects real-life experiences –
             interaction of different kinds of oppression
         Need for multiple strategies, not just one
         Present women as both victims of oppression and agents of own destiny

Unintentional Harms: Strict Liability versus Negligence
A long struggle over which rule will serve as the default for our tort system. Since the late-19th CE, negligence the
general rule with strict liability serving as an exception. The scope of this exception has varied across time.

We begin with two equally plausible institutions:

        -    Negligence: Why should somebody behaving reasonably be “taxed” for his activities? Doesn’t liability
             saddle an innocent person with an unfairly heavy load? (Fence cattle out)
        -    Strict Liability: Why should someone behaving reasonably be “taxed” because of someone else’s activities?
             Doesn’t “no liability” saddle an innocent person with an unfairly heavy load? (Fence cattle in.)

Negligence (plus contributory negligence)                        Strict Liability (plus contributory negligence)




The introduction of comparative negligence pissed off L&E folk because they didn’t see how to do it well (no B < PL!)

The most controversial corner is Yes/Yes … what to do when both parties took due care, but a harm still occurred?

                                                            32
       -   Our intuitions can support either rule
       -   There are major distributional outcomes to our choice of a rule

Why has negligence dominated when either rule is supportable by our intuitions?

       -   Begin by looking at reasons offered by late-19th CE judges
               o “Losses from the accident must lie where it falls” [Holmes, The Common Law]
               o Consistent with a belief that we want to avoid state action
               o Classical Liberal Thought

       -   Would an ideology of classical liberalism explain this development?
             o John Fabian Witt and Robert Gordon argue that CL was key to the evolution of tort doctrine during
                  this period (late-19th CE) [citing Francis Hilliard, Thomas Cooley, Holmes]
             o However, CL doesn’t obviously provide a basis for choosing negligence over strict liability -- either
                  way, someone’s rights are fringed upon [so guaranteeing autonomy isn’t helpful]
             o The question of individual freedom just restates the dilemma
                        If a non-negligent injurer must pay for harms to others, then her autonomy is
                           compromised
                        If a non-negligent victim must bear the costs of someone else’s behavior, then her
                           autonomy is compromised
                        Negligence is equivalent to strict liability for victims, and strict liability is a negligence
                           standard for victims
             o Still, we can predict that this ideology will be used to justify whatever outcome is reached
                  (even though this ideology is not itself what is moving tort law)
                        Will rely on stereotypes to determine whose autonomy is more valuable [Alicke]
                        An “implicit choice” (or distributional preference) will shape the discussion
                                 This will correspond with the dominant blame frame (in/out group)
                        “Naïve Cynicism”: Our attempt to enlighten them with our reason has failed; there must
                           be something wrong with them

       -   Relevant Precedent

               o   Main English case post-Civil War was Rylands v. Fletcher (found strict liability)
                       But American courts did not embrace this dominant common law rule
                       Emphasized a public policy interest in development/growth/activity over passivity, also a
                          desire to guard the “rights growing out of a civilized state of society”
                       Some behavior seen as better than others  wanted to encourage it
                       A general victory for defendants’ “autonomy” in the name of the “common good”
                       This is a DISTRIBUTIONAL CHOICE based on a view of the relevant groups

       -   Subsidization Hypothesis

               o   A story of positive externality … plaintiffs pay because we all, as possible plaintiffs, enjoy
                   the benefits of progress and growth resulting from a higher level of economic activity
               o   These developments reflected and concentrated power – a changed conception of property to
                   focus on use w/o regard for others (rather than negative liberty to be free of interference)
                        A form of subsidy for those who undertook schemes of economics development
                                 By shielding them and creating immunities from liability for action
                                 Instead of taxes (too overt, political, difficult)
                                 Clear distributional motives – huge legal subsidies and redistributions of wealth
                                 Hidden by the language of classical liberal ideology and doctrine
                                 Took advantage of the illusions generated by common law
                        Threw the burden of economic development upon the weakest and least active
                           social groups, reinforcing that position and exacerbating inequality
               o   Jed Shugerman: “[A] majority of state courts adopted Rylands v. Fletcher and strict liability for
                   hazardous or unnatural activities by the turn of the twentieth century. . . . [E]lected judges were
                   more likely than appointed judges to respond to disastrous events and adopt strict liability . . . . But


                                                          33
                      . . . judges elected to relatively long terms were far more likely to adopt strict liability in the wake
                      of these disasters and public fears than judges elected to shorter terms.”


NY Liability for Blasting-Induced Damage

Hay v. Cohoes Co.              Booth v. Rome         Spano v. Perini
Strict Liability               Negligence            Strict Liabiliy
1849                           1893                  1969

 This pattern illustrates a general trend – the use of rights/ideology language seems to explain what is happening, but
really the same underlying pattern of historical change proves more influential.

         -   When people don’t like a liability rule, they treat it as a prohibition on behavior
         -   A contested term = “responsibility” [hides attributional assumptions re: blame; also hides distribution]

1) Restatement on Abnormally Dangerous Activity
   a) §519 (Fourth p.10)
       i) (1) One who carries on an abnormally dangerous activity is subject to liability for harm to the person, land or
           chattels of another resulting from the activity, although he has exercised the utmost care to prevent the harm
       ii) (2) This strict liability is limited to the kind of harm, the possibility of which makes the activity abnormally
           dangerous
   b) §520: Abnormally Dangerous Activities
       i) Factors considered in determining whether activity is abnormally dangerous:
           (1) (a) existence of a high degree of some harm to the person, land or chattels of others; (P)
           (2) (b) likelihood that the harm that results from it will be great; (L)
           (3) (c) inability to eliminate risk by exercise of reasonable care (B>PL)
           (4) (d) extent to which the activity is not a matter of common usage
           (5) (e) inappropriateness of the activity to the place where it is carried on
           (6) (f) extent to which its value to the community is outweighed by danger

 Polinsky: Care Level versus Activity Level

        B<PL  “B” can take into account one or both levels
        Both levels matter in determining likelihood of accidents
        Negligence only looks at care level; SL looks at both
        Economists say it’s harder to prove activity level than care level (information cost, which is why activity level
         isn’t included in a negligence analysis), but Hanson argues that it’s actually harder to measure care levels or, at
         the very least, both levels are speculative, not just activity levels
        The intuition behind SL is that it will cause potential defendants to adjust their own activity levels – which is
         good b/c courts don’t have to figure activity level out (let the people w/more information about their activity
         make the adjustments). And they will also adjust their own care level too. they will make cost-justified
         investments in care and reduction of activity.
        Hanson argues the difference b/w care level and activity level is not that great
        Implicit in the case for SL is the assumption that market actors know better than the courts do about the range
         of potential investments in accident prevention and their efficacy. The market actors are the experts.

 4 common explanations given for the choice b/w negligence and strict liability

        Administrative costs
        Activity levels
        Insurance
        Distribution

                                The Nature of Consent: Mohr v. Williams
         -   Main Themes: Informed Consent
         -   Do people have information needed to exercise their preferences and give consent?
                                                              34
       -   Here, no accident – the doctor made a medical judgment to operate on a different ear
               o No valid clam of negligence [reasonable for the community]
               o Plaintiff won a huge verdict; trial court set aside as unreasonable and ordered a new trial; both
                   appealed; the appeals court applied strict liability for touching without consent
       -   A special inviolability of the body – essential to liberty and freedom
       -   L&E: Allows proper contracting and leads to efficient outcome with low contracting costs
               o Note, this treats information as something that doctors must give away for free
               o Both parties must fulfill specific obligations reached through mutual agreement
               o We treat this as a contract and make you liable if you don’t contract
       -   Sometimes can operate without consent
               o Emergency (high contracting costs) (try to find a guardian or loved one to consent)
               o Vaccinations and Public Health (group rights trump individual liberty)
       -   In what circumstances do we see consent? What happens at the margins?
               o “Would it have made sense for them to give consent” [we make our own rational judgments and
                   project it onto them]
               o Given fundamental attribution error, we tend to see consent more than it actually exists [because
                   we miss situational forces that motivate behavior absent control, especially when dealing with
                   individuals who belong to social out-groups]

                                            Respondeat Superior
   a) Vicarious liability in a master-servant relationship [Key = Control]
   b) Two basic types of agency relationship: Master-Servant and Independent Contractor
   c) M/S: Master exercises great control over agent; right to control physical conduct of the other in performance of
      the service; IC: Not controlled by nor subject to control of the employer
   d) Master is liable for torts committed by a servant within the scope of employment, but is not liable for torts
      committed b an independent contractor
      i) Important because many torts are committed by agents; employers often have more $$
   e) Scope of Employment: Committed while agent is doing work she was hired to do, occurs within an authorized
      space and time, and the agent acts for the master’s benefit
   f) Two questions have to answered when determining if respondeat superior applies.
      i) Was the agency relationship a master/servant relationship?
      ii) Was the tort committed within the agent’s scope of employment?
   g) Scope of employment rules:
      i) Tort committed while agent does kind of work hired to do;
      ii) Occurs within authorized space and time;
      iii) “Intent to benefit” test (agent’s conduct must be actuated to benefit master)
   h) Why do we want to hold principals liable through such a doctrine?
      i) Create incentives that benefit society by deterring the controlling principal
      ii) If principal has more control, we see them as more blameworthy (Alicke)
      iii) Don’t want masters to use servants as shields for tortious acts
      iv) Principals implicitly consent to liability by using an agent given this doctrine
      v) We want to allow victims to recover from everyone reasonably well-connected, especially when agent is
           judgment proof + distributive concerns
      vi) Hiring, Screening, Bonding … principals can pick agents more carefully

Pelham v. McDonalds [McDonalds obesity lawsuit]

       -   Main Themes: Free Will, Responsibility, Nature of Tort Law, Role of Judges, Causation, Thin Skull Rule
       -   Framed by judge re: line between individual responsibility & societal obligation to shield us from harm …
           tort law created when otherwise freely-acting individuals require a buffer against other entities
       -   Kids used as plaintiffs b/c reduce the personal responsibility factor (like flight attendants w/ smoking)
       -   Legal consequences don’t attach to defendant unless unaware of dangers of behavior; negligence only
           exists if there is a failure to warn [Judge: the public is well-aware of the risks! + policy considerations that
           the law shouldn’t protect people against their own excess]; also, causation requirement not met
                o Judge believes that knowledge of dangerous is freely available to consumers
                o Also, the products are not inherently and unreasonably dangerous
                o Judge perceives eating at McDonalds as a freely-made choice
                                                           35
                o    Judge also worries re: the possibility of “crushing liability”
                           Sweet seems to be acting more like a legislator here
        -   Presumption that people freely choose actions and aware of risk = central to negligence analysis here
        -   The plaintiff here struggles to challenge “common sense” notions of causation and responsibility
        -   Tension: Judge says that causation is so complex that it can’t be proven, and also that the causation is so
            obvious and well-known that plaintiff can’t support a negligence claim
                 o Must prove the obvious at a ridiculously high level of scientific certainty in the individual case,
                     creating incentives to diffuse responsibility around (that fast food is bad for you)
        -   Ausness Article: Use information, education, and labeling; ban future law suits, rely on school boards; also,
            legislatures and agencies more capable of handling this than judges
                 o However, information bias also acts on agencies/legislators; they are influenced by lobbies; tort
                     litigation brings public attention, respond to actual cases, puts pressure on companies
                 o An implicit “law and economics” / “classical economics” view of the human actor

Marshall v. Ranne [Strict liability for a dangerous ox]

        -   Main Themes: Negligence v. Strict Liability; Free Choice, Consent and Assumption of Risk; Double Bind
        -   At trial, a negligence standard applied + plaintiff held contributorily negligent (he should have known that
            the hog was vicious and taken steps to protect himself … he assumed the risk freely)
        -   On appeal, applies strict liability and rejects assumption of risk defense b/c plaintiff did not choose the
            situation defendant put him in … plaintiff had only a choice of evils imposed upon him (double bind)
        -   Defendant should have known that the hog was vicious and likely to cause injury
        -   Linked historically to an uptick in willingness of appellate courts to hold defendants liable in the 1970s
                 o Shift from negligence  strict liability standards
                 o Harder to argue consent
                 o More willingness to include pain & suffering in damages
                 o Expanded notions of causation

Vosburg v. Putney [School-House Kick]

        -   Main Themes: Intent [intent to cause the harm? Or intent to commit an act that causes harm?]
        -   This case decided when tort law was in flux; it became very influential in the United States
        -   14 y/o plaintiff kicked by an 11 y/o defendant, a light kick, due to a pre-existing injury, great harm
        -   Influenced by “Microbe Theory” re: causation (the relevant “but for” cause)

        -   Central Enigma of Vosburg: Defendant found guilty without intent to harm (Strict Liability)

                o   Stretches the 1st Dimension of Tort Law
                o   Holds that the intended act was unlawful, and therefore the intention to commit was too
                o   It was not the law at this time to hold a defendant liable absent an intent to harm … this case
                    lowered the necessary and sufficient conditions for tort liability (negligence  strict liability)
                o   But the Court never really asks whether it was “unlawful” to kick during a whispering recess

        -    2nd Dimension: Court prevents defendant from escaping liability by claiming consent … something of a
            stretch in favor of the plaintiff that turns on implied consent and general expectations of behavior.

                o   If happened on the playing field, only malice, recklessness, or negligence  liability
                o   This case turns on contextual expectations re: “unlawful” actions
                          Volenti non fit injuria: To one who is willing, no wrong is done
                          We look to customs and expectations, scripts and schemas to infer consent
                o   There is no pure place to see what people do absent the law – it is always shaping expectations
                o   Consent manifested by action or inaction; need not be communicated; if reasonable understood to
                    be such, words/conduct count as consent … depends on background knowledge structures
                o   There is a rule that applies when we do see consent (Negligence) and when we don’t (SL)
                          To opt-out of SL, must show implied or express consent
                          Can’t typically opt-out of negligence, even with consent (i.e. a waiver) … policy reasons not
                             to let people out of standard of care expected from a reasonable person


                                                           36
                   One exception = professionals (i.e. football players can’t sue each other for injuries
                    sustained on the field during the normal course of play)
                         But this is rare, because tort law usually involves “accidental meetings” where
                            people haven’t had the chance to contract




-   3rd Dimension: Damages

        o   Pre-Vosburg, law unsettled re: responsibility for unforeseeable consequences
        o   Vosburg adopts the “Thin-Skull Rule” … you take your plaintiff as you find them
                  Once breach duty of care and commit a tort, responsibility attaches to all consequences in
                     the form of accidental damages
                  We don’t measure this by what a “reasonable person” would foresee
        o   The more culpable a party is: (1) the more damages are allowed by doctrine and (2) the more
            juries tend to award higher damages
        o   Damages increase generally from SL  Negligence  Recklessness  Malice




-   4th Dimension: Causation

        o   Modern doctors agree that outcome was inevitable regardless of the kick; the jury based its
            decision on late-19th CE “Microbe Theory” [a.k.a. junk science].
        o   The court allowed the introduction of dubious evidence, even at the time, to favor the plaintiff …
            this evidence was dispositive for key issues in the case
        o   Why was this testimony believed? Because it matched w/ general schemas of causation
        o   See Gilbert, “Illusion of Conscious Will”
                  Priority principle: Temporal

                                                  37
                         Consistency Principle: Appearance of link between cause and effect
                         Exclusivity principle: More causal agents can confuse causality
               o    Some people think that the professionalization of medicine and its increased credibility were
                    informed by tort law … doctors were motivated by tort law to standardized custom. In an
                    accusation of malpractice, to test negligence, courts looked to “custom” in the field of medicine
                    when assessing liability. So doctors bought insurance at affordable rates by joining medical
                    societies and then worked together to decrease insurance rates by testifying favorably for each
                    other … now there were incentives to donate money to medical organization for membership in
                    exchange for protection.

       -   In virtually every direction, tort law was stretched in this case to favor the plaintiff

                                Pre-Vosburg                              Post-Vosburg
           1st Dimension        Negligence                               Strict Liability
           2nd Dimension        Maybe Consent?                           No Consent
           3rd Dimension        Limited Damages                          Liable for Unforeseeable Damages
           4th Dimension        Medical Testimony Sometimes              Yes Medical Testimony

       -   Puzzles of Vosburg

               o    Everyone involved seems to think this was a strange case that should not have come to court
                         Trial Judge: “It is a peculiar case, an unfortunate case, a case, I think I am at liberty to say
                             that ought not to have come into court”
                         Supreme Court: “[w]e have much of the same feeling about the case” and adding: “[i]t is a
                             very strange and extraordinary case.”
                         If this case shouldn’t have come to court, why rule consistently for plaintiff?
               o    An extremely negative public reaction to this case … and yet the jury awarded huge damages!
                         Worries that people aren’t taking responsibility for their actions; seen as frivolous suit
               o    Why didn’t the defendant just pay $2500 instead of appealing at great expense for 4 years
               o    Intuitive norms of Tort Law include strict liability and don’t sue neighbors
               o    Dale Miller scholarship on disrespect, perceived injustice, anger  what triggers lawsuits
                         All of these elements present in Vosburg
                         After the Vosburgs won judgment, they never actually collected (it was about respect)
                         The wealthy and powerful Putneys responded by offering a paltry sum for compensation,
                             were callous and indifferent b/w of perceived triviality of kick, this offended the Vosburgs
                                   Andrew Vosburg previously beaten and threatened by George Putney
                                   We perceive egregiousness as increasing with reference to intention (reptition,
                                      malice, disrespect all evidence of this)
               o    Tort and Criminal Law = state-based options to deal with private wrongs and block self-help … in a
                    closely-knot group, there are alternative mechanisms to deal with conflict
               o    Here, a case about getting the Putneys to publicly admit wrongdoing and thus restore standard lost
                    by Vosburgs; also, Putneys more powerful and ergo not subject to extra-legal mechanisms of social
                    reprimand [Vosburgs disadvantaged both by class dynamics and blame attached to child’s
                    preexisting injury]
               o    The judges here are admonishing the Putneys for allowing a breakdown in the system of social
                    norms that would otherwise handle cases like this one … criticizing Putneys for acting so
                    disrespectfully by bringing in strict liability as a substitute for well-functioning social norms …
                    judges wanted this case settled so they kept it going
                         Ellickson’s Norm Theory: “Disputants are increasingly likely to turn to legal rules when …
                             the social distance between them increases, [and] when the magnitude of what is at stake
                             rises.”
                         Courts step in when society fails – especially with heterogeneity of class, ethnicity
                         A huge transformation of the local community triggered by rush of workers post discovery
                             of medicinal springs  increased community conflict and decreased community norms 
                             more lawyers  more suits  disintegration of other systems

Courvoisier v. Raymond (Self-Defensive Shooting)


                                                           38
        -   Main Themes: Self-Defense, Battery
        -   Battery: “Harmful or offensive” contact necessary to show liability
                 o Defenses: (1) No intent, not offensive, not harmful touching; (2) Self-Defense; (3) Necessity
        -   Plaintiff argues that shooting was reckless; Defendant’s evidence shows that circumstances surrounding
            him were such as to lead a reasonable man to believe that his life was in danger, or that he was in danger of
            receiving great bodily harm at the hands of P
        -   Court holds that defendant’s situation at the time of the shooting justified his self-defense claim
        -   Pay attention to how both parties frame themselves as moved by situation!
        -   The court had options:
                 o Pro-Plaintiff: Only the true state of affairs matters (strict liability)
                 o Pro-Defendant: Honestly made mistakes relieve liability
                 o Actual: Only honest and reasonable mistakes relieve liability
        -   This is not about consent by victim; rather, self-defense is limited in ways that seem consistent with
            attribution theory (knowledge, control, intent)

Ploof v. Putnam (Boat Case #1)

        -   Main Themes: Private Necessity, Respondeat Superior, Law & Economics, Game Theory
        -   Holding: Trespass sometimes permitted without consent of the owner … if the situation forces you
            (necessity), then trespass is justified … applies especially to preservation of human life
        -   Respondeat Superior Discussion
        -   Hanson performed a Law and Economics analysis to show issues re: transaction costs in this case
        -   Also a discussion of the larger historical context of this case (its “situation”)
                o Court sided with less-privileged group, offered a narrative that excluded relevant information (i.e.
                     that Ploofs were French-Canadian pirates) and reframed attributions
                o Maybe a bias against the out-of-state NY elites visiting once-per-year?
                o Different threshold of acceptable behaviors (Putnam went too far in his biased behavior)
                o The judges here were known as liberals; liberals more likely to be situationist [and beneath
                     attributional styles are motives] [liberals have less implicit motive to be dispositionist because less
                     need to rationalize injustice]
                o Motives  Attributional Styles  Motives

Vincent v. Lake Erie (Boat Case #2)

        -   Main Themes: Game Theory, Law and Economics,
        -   Defendant unloading cargo from plaintiff’s ship, a storm arrived, plaintiff tried to keep the ship from
            breaking away from the dock, the cables holding it caused $500 damage to the dock
        -   High contracting costs here b/c ordinary rules (contract) governing property rights were suspended by
            forces beyond human control … ergo, use tort law not contracts + add state intervention
        -   Judges basically saw the captain’s decision to remain moored to the dock as a good one b/c saved lives
        -   But the court rules that the boatowner must pay, even though it would have been negligent to do otherwise
        -   This is puzzling! Usually only create liability when we see something wrong [no deterrence benefit here]

        -   Puzzle #1: Why, if the boat owner was blameless, must the boat owner compensate the dock owner for
            damages to the dock? That is, why make the boat owner strictly liable?

                o   Because it is efficient: The necessity-based qualified privilege announced in Vincent can be
                    justified as the rule that will most faithfully lead parties to behave efficiently in the typical high
                    contracting cost, emergency situation – where there is asymmetric information (or presence)

        -   Puzzle #2: What is the “privilege” of a qualified privilege if must pay anyway?

                o   The “privilege” of qualified privilege is that we’re not punishing the boat owner with criminal
                    charges (i.e. not enforcing property rule protection against him)

        -   Puzzle #3: If liability rule protection is efficient when contracting costs are high or low, and property rule
            protection is efficient only when contracting costs are low, why not make liability rule protection the
            general rule, rather than just the exception

                                                            39
               o   Look for some other benefit to property-rule protection that would make us prefer it when
                   contracting costs are low. Look especially at who measures the damages under the two rules …
                   maybe we’d prefer to have the two parties agree on a price than to have the court set one.
                   Voluntary transactions generally more efficient b/c the parties know how much they value things
                   whereas the court is only guessing [ergo, prefer market transactions where TC are low]


O’Brien v. Cunard [Forced Vaccination on Immigrant Ship from Ireland]

       -   Main Themes: Respondeat Superior, Consent, Feminist Critique, Procedural Fairness, Immigration History
       -   Judges cite three kinds of cases:
               o Internal thoughts don’t negate consent when a reasonable infer would infer it from behavior
               o Respondeat superior (pilot v. doctor = yes v. no)
               o Injuries by passengers on steamboats (must show that ship didn’t choose a reasonably competent
                   surgeon … like the “one gore rule” with oxen, first time offense doesn’t create vicarious liability)
       -   Judges: Passengers have a lot of control, doctor has a bit, ship-owners have none
               o Passengers have the most – can go without care, can treat themselves, can find another doctor
               o Doctor is an autonomous individual who just happens to be on the boat
                         SO just gives him patients, setting, supplies, etc.
       -   Bias and Risk Assessment: Act/Omission Bias + Emotional Proximity Bias
               o Public v. Expert Risk Assessment
               o People are moved to be obedient and follow orders
       -   Feminist Article by Chamallas
       -   Historical Background … Irish  USA immigration experience was hellish; major loss of control along the
           way, brutal treatment in England and on the ship … hard to meaningfully find consent here
       -   In Cunard, the court looks from the doctor’s point of view and not O’Briens’ … Why? Should it?
               o Plaintiff distinguishes submission from affirmative consent; Defendant just sees consent
               o A battle over which perspective is relevant to deciding consent
               o Mohr v. Williams emphasizes the right to control ones’ person except where a privilege exists
               o Cunard devalues this inviolability
               o The Cunard decision eventually lends support to Buck v. Bell (compulsory sterilization)
       -   Evidence shows that we don’t have great access to what really moves us (intentions/motivations)
       -   Judges avoid O’Brien’s perspective because it challenges a ton of customs
               o It is easy to see big, common, customary phenomena as just how things are
               o We naturalize rather than challenge
       -   Remember that there are two issues here – how to challenge attributional schemas in the courtroom, and
           how to challenge the larger web of law that participates in the creation of these circumstances to start with
       -   Procedural Fairness [discussed above]

Madrigal v. Quilligan (questionable sterilization of Mexican women in California hospital)

       -   Main Issues: Racism, Feminism, Preferences and Personhood,
       -   Dislike Mexicans b/c waste welfare, raise kids poorly, become criminals
       -   Feminist Critique: Same outcome as eugenics movement, just different justifying store
                o Sterilization pushed heavily on minorities; framed as an economically liberating choice for them
                o In ambiguous gray areas, systematic and implicit biases push toward significant racial disparities
       -   Post-WWII Conception of the Person = PREFERENCES AND CHOICES
                o This ideology serves the same function – legitimizing inequality in favor of the powerful by
                    ignoring/denying structures that continue to reproduce themselves [rhetoric of choice]
       -   In either case, the doctor pays or the patients pay … why raise so bar SO high on consent for plaintiffs?
                o We resist liability here; but in other contexts move money from A  B all the time for doing
                    certain things … why so intuitively predisposed against liability
                o Hard to get plaintiffs attorneys to take these cases
                o Patients lose more than doctors given their limited resources
                o We might raise consent standards when we face irreversible procedures like sterilization



                                                         40
Kerans v. Porter Paint (workers’ compensation, sexual harassment)

        -    Main Themes: Workers’ compensation, feminism, sexual harassment, respondeat superior
        -    Respondeat Superior: Servant or Independent Contractor? Within scope of employment?
                  o Can also sue a co-employee for a tort; in some cases can also sue employer for negligence
                  o Focus on (1) time/place of wrongdoing; (2) foreseeability; (3) did employer put the wrong-doer in
                      a position to commit harms [employer can’t sit idly by if it knows that an employee is dangerous]
        -    At the time of this case, no Title VII protection
        -    History of Workers’ Compensation
        -    Feminist Critique: Double Bind
        -    Feminist Analysis of Sexual Harassment

Indiana Harbor v. Cyanamid: Why L&E Fails to Identify What Truly Moves Tort Law

General Background:

        -    Two decisions: 1987 (strict liability) and 1990 (negligence)
        -    A chemical company with lots of extra chemicals needs to do something with them
                 o As a profit maximizing strategy, goal would be to externalize the costs (i.e. dump them)
                 o A number of examples from Cyanamid show just this behavior – destroyed parts of RI and NJ
        -    The relevant part of Chicago is fairly industrial, a rough neighborhood with poverty, gangs, projects, etc.
        -    Chicago suffers a relatively high number of railroad accidents per year b/c railroads converge there

Facts of the Case:

Cyanamid loaded 20,000 gallons of acrylonitrile in a railroad tank car leased from the North American Car Corporation
on January 2, 1979. The next day, a train if the Missouri Pacific Railroad picked up this car at Cyanamid’s siding and
departed for the Blue Island Railroad Yard of Indiana Harbor Belt Railroad, a small switching line that switches cars
from other trains to Conrail (in this case, so that Conrail could complete the delivery of acrylonitrile to New Jersey).

Shortly after arriving at the BIRR, the car leaked ¼ of its contents. This caused a brief evacuation and long-term
environmental concerns (acrylonitrile is flammable, toxic, and possible carcinogenic). The Illinois Dept. of
Environmental Protection required a $981,022,75 clean-up by IHB.

IHB has sued Cyanamid for this amount, alleging (a) negligence in maintaining the leased tank car and (b) that the
transportation of acrylonitrile in bulk through a metropolitan area is abnormally dangerous activity for which the
shipper is strictly liable to the switching line. The District Judge granted summary judgment on the strict liability claim
and dismissed the negligence claim with prejudice to facilitate appellate review. IHB appeals dismissal of the negligence
claim, Cyanamid appeals the finding of strict liability

Posner’s Facts:

        -    Moran: Suits exists because Cyanamid doesn’t want to reimburse IHB for the spill
        -    Posner: DEP ordered the switching line to pay $981,022,75 … rhetorically minimizes the resulting danger,
             trivializes leak and evacuation, takes an implicit swipe at the DEP, doesn’t even mention Cyanamid

Posner on the District Court Opinion:

        -    Says that this is a question of law, so shows no deference to the lower court
        -    A minor quibble: Seems to minimize the lower court’s reasoning

Posner on Illinois Appellate Court Opinion:

        -    This case draws on Illinois common law – and it seems like Illinois courts have to this issue in Fallon and
             Continental (both holding strict liability)
        -    Posner says this is just dicta – and “careless” dicta too, b/c relied on an earlier case’s motion to dismiss
        -    Objections to Posner re: Illinois Appellate Opinions:

                                                            41
                 o   He could easily have taken these appellate court opinions as persuasive authority, chose not to
                 o   Illinois Courts believes that there had been a final decision that this was “abnormally dangerous”
                           Indeed, used the Indiana Harbor facts to say “yes, there was SL in that case” while
                               distinguishing to reject claims of strict liability in different cases
                           It seems like they “blessed” the district court’s logic by doing this
                           Continental: district court “correctly interpreted Illinois law”
                           Hardly dicta! This issue was at the heart of the Illinois Appellate Courts’ reasoning
                           Posner could, had he chosen, deferred to these cases and held strict liability

Posner on Other State Opinions:

        -   Iowa: Strict Liability (but different standard)
        -   Georgia: No Strict Liability (but different standard)
        -   Arkansas: Actually “abnormally dangerous” to pump propane, so fine that strict liability was not ruled out
        -   Washington: Siegler v. Kuhlman
               o Here, Posner says the circumstances are different b/c evidence was destroyed
               o But the opinion’s conclusion did not rest at all on that fact!
                          Even if it had, could have easily used res ipsa loquitur
               o This case creates SL – and is strikingly similar to this one in its focus on dangerous substances
               o Posner makes a big deal about the storer of chemicals have more control than the shipper
                          Shipper < Storer < Transporter < Carrier
                          Deterrence: Whoever has the most control is usually the lease cost-avoider
                                    Posner treats Cyanamid as a shipper and so distinguishes it from similar cases
                                       that hold strict liability for storerers
                                            o But this an entirely novel distinction
                                            o Previous cases did not rely on this distinction at all
                                            o In those cases, even with negligence, the court found strict liability
                                                anyway and rejected “assumption of risk” argument re: local landowners
                                            o This is consistent with Rylands v. Fletcher, which also rejects the
                                                owner/agent distinction and assumption of risk defense
        -   AND SO, CONCLUDES POSNER, PRECEDENT TELLS US NOTHING
               o Even though it is arguably hostile, either explicitly or implicitly, to Posner’s analysis

Posner on the Restatement (Second) of Torts: §520

        -   He uses Guille v. Swan to illustrate [he calls it a “paradigmatic case”]
        -   But is it really “paradigmatic”? Nope …
                o Is a slow-moving giant balloon really dangerous?
                o How significant could the harm have really been?
                            Note that “potential damages” matter here [he later switches on this point]
                o Was Swan to powerless to control without due care [could have just flown elsewhere, thus making
                      this more of a negligence issues]?
                o Not a matter of common usage, so presumed not to be highly valuable … but this was cutting-edge
                      technology at the time, clear potential value
                o Why not change the location of activity with a reasonable person negligence standard?
                o Did Posner really assess value to activity versus risk? Or just assert it?
        -   The actual paradigmatic case is Rylands v. Fletcher
                o Guille is not illuminating; Rylands much more famous/helpful [but not to Posner!]
                o In Rylands, a master held strictly liable for actions of agent [like Cyanamid … ] for activity that was
                      a threat to the nearby neighborhood [like our case!]

Posner’s Law and Economics Analysis

“The baseline common law rule of tort liability is negligence” – Posner uses this to burden an argument for SL

        -   Negligence: B < PL [according to L&E]
        -   Chavell distinguishes levels of care (modifies P) from levels of activity (modifies P too!)


                                                          42
        o   According to L&E, SL is efficient because it modifies both care and activity, whereas negligence is
            only assessed with reference to care [costs of activities are externalized in negligence analysis]
        o Both are equally hard to calculate, says Hanson, even though the conventional wisdom is that care
            is significantly easier to assess than activity
                  Just as easy to see how much someone drives as how much attention they paid
                  Regardless, we only look at the marginal unit of activity immediately relevant to the
                      accident to measure against resulting harm/burden
-   SL does a better job of internalizing costs
        o Changes both activity and care levels
        o Places burden on parties with the best information
                  Courts aren’t good at determining a standard of “activity”
                  “Activity level” is more situational than “care” [which is why L&E avoid it]
                           Even the activities of activity v. care don’t remain distinct under pressure
-   SL removes Court from the business of Cost/Benefit analysis, which they’re bad at anyway, and
    leaves parties with the most information to change their conduct and internalize cost
        o So why now always use this? Why is negligence the default?
        o The §520 analysis in the Restatement (Second) is really hard for courts to do well because
            of the extremely high information cost
-   Posner cites Chavell to say that we like SL when care won’t avoid harm, and we like negligence when we
    can take due care … but does this really stand up to scrutiny?
        o Sometimes we can move to another locale or decrease activity as a way of reducing harm [this
            requires a SL standard in tort law]
        o ↑ Cost + ↑ Probability (↑ PL)  Incentive to ↓ Activity  Need for SL
        o Negligence is fine w/ accidents not caused by activity levels and determined largely by care levels,
        o But if L&E assume that courts can’t judge activity levels well, then why not use SL to do so?
-   Posner’s Risk Analysis:
        o He compares acrylonitrile, not do “hot air balloons” [his “paradigmatic case”], but to other toxic
            chemicals … if 52 are worse, how big a risk can this really be, he wonders.
        o “No cases recognize so sweeping a liability” for so many toxic chemicals
                  Except for Kuhlman, but let’s forget about that for now
                  Also, we’ve suddenly abandoned Guille’s “potential harm” rule, because here he
                      says that, absent “actual harm” there is no good reason to create strict liability [he
                      doesn’t look at this chemical’s potential for “potential harm”]
        o Posner also insists that the leak here was caused by “carelessness”
                  But L&E contradicts this – it is a question of efficiency, not human action
                  Also, the defendant (says Posner) should be indifferent between negligence and SL b/c
                      most accidents are caused by N, and that this is somehow a reason for N, not SL
                           But judges don’t really have this information!
                           If Posner was right, we’d predict that Cyanamid wouldn’t care … but it does!
                           And it has a lot more information than Posner!
                                   o It seems to see a huge difference in the incentives created by N v. SL;
                                        argued with amici that SL would impose major costs
                           Who knows better what costs will be impaired? Posner or the industry?
                                   o If Posner is right, no effect on industry
                                   o If Posner is wrong, then a huge effect … and by his own logic that’s a good
                                        thing (b/c negligence was failing to force internalization of cost) (and he
                                        wants that to happen)
                  Posner never tells us why no SL … he just says that negligence is the norm, and that we
                      must meet an unclear burden to get SL [fly a hot air balloon?]
-   Then Posner conducts “Hypocritical Negligence Analysis of Strict Liability”
        o After saying that courts aren’t good at analysis re: internalizing costs, he does just that
        o Posner argues that there is “no substitute” … WTF does he know? Create SL incentives and see
            what the industry comes up with? [technology-forcing, anyone?]
        o Too costly to reroute, he tells us … well, maybe with a RR system anchored in Chicago BECAUSE
            we externalize costs … let the market figure out the least cost method of transit AFTER it
            internalizes costs [us SL to incentivize a hard look at this issue]



                                                   43
                          The burden is on plaintiff to show that a change in legal rules will reduce costs and
                           activity? What??? Maybe SL w/ internalized costs will or won’t work, buy why would we
                           ask plaintiffs to figure this all out?
               o Posner: Because I won’t be sure there will be savings, I won’t create strict liability here …
                   he uses the very same “negligence” analysis that he’s told us courts are bad at [and,
                   arguably, has proven himself right on that account!]
        -   The Shipper/Carrier Distinction
               o Argues that shippers can’t properly reroute, only carriers can
               o Suppose this is true
               o Isn’t there a problem with holding carriers strictly liable to change their activity level?
                        Yes – the shipper has more control (over where to locate themselves, how much chemical
                           is produced and shipped, etc.)
                        Also, there is a complex contract between shipper and carrier
                        Carriers aren’t subject to SL because they can’t refuse to carry legal products
               o Posner says that the Carrier is better to hold SL, but we can’t do this
                        So then why not create SL for shippers? And let contract w/ Carrier do the work?
                                 Posner: Because other states hold the carrier strictly liable
                                         o WHAT? This makes NO sense!
               o Posner says this is unlike Guille, Rylands, and Siegal b/c agents are involved
                        But some of these cases did involve agents and that didn’t seem to matter!
                        And respondeat superior is a well-established doctrine
                                 Posner: But Carrier has more control here than S
                                         o No! The Bill of Lading actually gives the Shipper tons of control – in the
                                               instant case, Shipper can even designate the route!
                                                    Posner: This is unrealistic
                                                              But then he concedes that Cyanamid is a transporter,
                                                                 not a shipper
                                                                     o So then why aren’t all the precedents
                                                                          distinguished on the shipper/carrier basis not
                                                                          relevant? Why not say that defendant here is
                                                                          more like a storer?
                                                                                Because the lower courts did not use
                                                                                  the distinction that I just invented for
                                                                                  the first time in the history of common
                                                                                  law, and even though I am not even
                                                                                  applying that distinction here, I will
                                                                                  consider the plaintiff to have waived
                                                                                  this part of the case
                                                                                WTF WTF WTF WTF WTF
               o Posner also tells us that the chemical industry would NEVER assert control over a shipper/carrier
                        But after the district court decision, plenty of reports of exactly this
                        Plus, plenty of studies on this subject have already been done
                        But there is no incentive to use this data to change activity w/o SL!!!

So what is happening here really? Its clearly not Posner’s L&E that compels this result. His conclusions don’t connect to
his authorities [L&E, Restatement, Precedent]. What is moving this decision?

        -   Distribution !!!
                o Now these costs are externalized from the industry to the people who live near the spill [and to
                    IHB] … indeed the big corporation gains slightly b/c can continue to do this
                o Are we bothered by this?
                o Posner does touch on distribution
                          IHB has a big parent corporation, he says, so no worry that they’re screwed here
                                  But in Corporate Law, parents corporation has no obligation to aid IHB
                          More importantly, says Posner, such distribution are irrelevant and impossible to assess
                             b/c we don’t know how to trace costs
                                  Hanson: But if we can’t trace costs, then how do we talk about efficiency?
                          Oh, and fuck the people who chose to live near the railroads

                                                           44
                                      Their disposition, their preference as inferred from their idiot choice to live in a
                                       place like that, justifies the burden we will make them bear

Most policy happens in cases like this … no fault on either side … justifications pretend to sanction in ideology,
efficiency, and rights, but what is really is happening is DISTRIBUTION.

------------------------- General Torts Exam Strategies -------------------------
Refuting efficiency analyses

1) A similar analysis could justify alternative holdings
2) Efficiency analysis ignores language of opinion
3) Check for important elements of efficiency analysis
        i) Is B>/<PL?
        ii) Who is cheapest cost-avoider?
        iii) Care level vs. activity level?
        iv) Contracting costs high or low?
        v) Information costs: market actors vs. the court

Attribution theory

4) Focus on locus, knowledge, control, intent, bad motive (attributional blame?)
5) Counterfactual thinking
6) Custom, conventional wisdom
7) “Observers draw attributional inferences about others by determining whether or not a given behavior is freely
   chosen, socially desirable, or consistent with social roles or prior expectations”
8) Focus on reasoning and rhetoric of opinion while also thinking about deeper issues

CRITIQUING CASES

9) Look at how the facts are described
        i) Rhetoric/perspective/stereotypes
10) Look at the arguments given for/against possible outcomes
        i) Policy, precedent, statutes
11) Ask if these arguments hold up?
        i) Are they consistent?
        ii) Do they make sense? (look for puzzles, contradictions, weak assumptions…)
        iii) If not, is there a bias?

             1.   What kind of analysis is the court using? (see steps outlined above)
             2.   If it doesn’t make sense, is their opinion more consistent w/attribution theory?
             3.   What could be causing them to make such attributions?
             4.   What would have been a better (more situationist) outcome?




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