The (hidden) risk of opportunistic precautions

Virginia Law Review

Volumn 93, Issue 6, 2007, Pages 1389-1435

  Guttel, Ehud ^a  

^a HEBREW UNIVERSITY OF JERUSALEM   (Israel)

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EID: 36249024385     PISSN: 00426601     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (132)

1. See, e.g., Michael D. Green, Negligence = Economic Efficiency: Doubts >, 75 Tex. L. Rev. 1605, 1612 (1997) ("[T]o employ a risk-benefit test in a tort case, some identified, untaken precaution must exist that, had it been employed by the defendant, would have prevented the plaintiff's injury . . . . [T]he economic cost of that untaken precaution and the expected accident toll if the precaution is not taken . . . must be compared with each other in a risk-benefit test.").
2. See, e.g., Bruce Chapman, Corporate Tort Liability and the Problem of Overcompliance, 69 S. Cal. L. Rev. 1679, 1690 (1996) ("[I]n a negligence action the plaintiff is required to show, first, that some untaken precaution would have prevented the injury had it been taken and, second, that it was reasonable to require that such a precaution be taken (for example, that the taking of the precaution would pass . . . a Learned Hand test) . . . .");
3. see also Mark F. Grady, Discontinuities and Information Burdens: A Review of The Economic Structure of Tort Law by William M. Landes and Richard A. Posner, 56 Geo. Wash. L. Rev. 658, 661 (1988) (showing that performing risk-utility analysis in tort cases is conventionally understood to require exploring the efficiency of untaken precautions).
4. "[T]he injurer is liable under the Hand rule when further precaution is cost-justified. Further precaution is cost-justified when precaution falls short of the efficient level . . . ." Robert Cooter & Thomas Ulen, Law & Economics 334 (4th ed. 2004) (explaining the efficiency of the Hand formula).
5. For a comprehensive discussion, see John Prather Brown, Learned Hand Rule, in 2 The New Palgrave Dictionary of Economics and The Law 514, 514-16 (Peter Newman ed., 1998) (demonstrating parties' incentives for optimal care under the Hand formula).
6. For the duty to eliminate risks created by the unreasonable behavior of others, see, for example, Prosser and Keeton on the Law of Torts 198-99 (W. Page Keeton ed., 5th ed. 1984): [A] person is required to realize that there will be a certain amount of negligence in the world . . . . The duty to take precautions against the negligence of others thus involves merely the usual process of multiplying the probability that such negligence will occur by the magnitude of the harm likely to result if it does, and weighing the result against the burden upon the defendant of exercising such care. On the scope of this duty in negligence and nuisance, see infra Part II.
7. For a comprehensive analysis concerning the risk of strategic suboptimal investments in prevention, see generally Steven Shavell, Torts in Which Victim and Injurer Act Sequentially, 26 J.L. & Econ. 589 (1983);
8. Harold Winter, Sequential Torts with Imperfect Information, 14 Int'l Rev. L. & Econ. 35 (1994);
9. Donald Wittman, Optimal Pricing of Sequential Inputs: Last Clear Chance, Mitigation of Damages, and Related Doctrines in the Law, 10 J. Legal Stud. 65 (1981). See also infra notes 64-65 (discussing additional literature addressing the risk of strategic behavior in the context of harm prevention). This scholarship has focused only on parties' incentives to avoid taking precautions in order to shift prevention costs to other parties; no reference, however, is made to the opposite alternative of strategic investments in prevention ("opportunistic precautions").
10. Richard A. Posner, Economic Analysis of Law 62 (6th ed. 2003);
11. see also William M. Landes & Richard A. Posner, The Economic Structure of Tort Law 49 (1987) (explaining that under "the standard of liability in private nuisance cases," liability is imposed where "the defendant (injurer) can eliminate the nuisance at a lower cost than the plaintiff (victim)").
12. See Prosser and Keeton on the Law of Torts, supra note 4, at 630-31, for an explanation of how the plaintiff in intentional nuisance cases, just as in negligence cases, is required to show "unreasonable" interference by the defendant and that "conduct is unreasonable only if the gravity of the harm caused outweighs the utility of the conduct." Unlike negligence cases, however, where the harm is severe, defendants in nuisance disputes might be required to compensate the plaintiffs even when their behavior is socially desirable. Nevertheless, where defendants' nuisance is efficient, victims in many cases "may well be required to absorb the loss." Id. at 630. Moreover, cost-benefit analysis is often applied in deciding a plaintiffs right for injunctive relief.
13. See, e.g., Dan B. Dobbs, 1 Law of Remedies 763 (2d ed. 1993) ("[E]ven though the defendant is clearly maintaining a nuisance, the injunction may still be denied because of the 'relative hardship' it may impose upon the defendant . . . Economic analysis of the relative costs and incentives also may become especially significant in balancing hardships and equities.").
14. See Clay Elec. Coop. v. Johnson, 873 So. 2d 1182, 1204 (Fla. 2003) ("[M]any courts have found a cost-benefit analysis helpful in determining whether to impose a duty."); Myers v. Dronet, 801 So. 2d 1097, 1109 (La. Q. App. 2001) ("To determine whether [a person] breached a duty or, in other words, acted unreasonably, courts often use Judge Hand's Carroll Towing balancing test, most commonly referred to as the 'Hand formula' . . . .");
15. James A. Henderson et al., The Torts Process 179 (5th ed. 1999) ("The proper balancing of costs and benefits suggested by Learned Hand in Carroll Towing has come to be recognized as the central inquiry in determining whether an actor has been negligent."); Prosser and Keeton on the Law of Torts, supra note 4, at 173 (referring to Judge Hand's decision in United States v. Carroll Towing, 159 F.2d 169 (2d Cir. 1947), and concluding that "negligence is usually determined upon a risk-benefit form of analysis").
16. See, e.g., Fashion 21 v. Coal, for Humane Immigrant Rights of L.A., 12 Cal. Rptr. 3d 493, 504-05 (Ct. App. 2004) ("In order to recover damages for nuisance the plaintiff must prove the defendant's . . . interference [with the use and enjoyment of his property is] ' . . . unreasonable.' The test . . . 'is whether the gravity of the harm outweighs the social utility of the defendant's conduct.'" (quoting San Diego Gas & Elec. Co. v. Superior Court, 55 Cal. Rptr. 2d 724, 752 (Ct. App. 1996)); Rattigan v. Wile, 841 N.E.2d 680, 687 (Mass. 2006) ("The general rule is that a trier of fact may find an intentional invasion of another's interest in the use and enjoyment of land to be unreasonable if the 'gravity of the harm' caused thereby 'outweighs the utility' of the actor's conduct." (quoting Restatement (Second) of Torts § 826(a) (1979))). Risk-utility analysis is also applied in public nuisance cases. See, e.g., County of Santa Clara v. Atlantic Richfield Co., 40 Cal. Rptr. 3d 313, 325 (Ct. App. 2006) (holding that public nuisances are substantial and unreasonable offenses against the exercise of rights common to the public and that public nuisance is unreasonable if "its social utility is outweighed by the gravity of the harm inflicted").
17. As torts scholarship has shown, activities that may inflict harm generate two major types of social loss: (1) the costs of care taken by the parties to decrease the risk of harm and (2) the damage suffered by the victims when the risk of harm materializes. Parties' investment in prevention is thus efficient when it allows the sum of these costs to be minimized. For the first comprehensive analysis of the costs of tort-related behaviors, see Guido Calabresi, The Costs of Accidents: A Legal and Economic Analysis 20 (1970) (arguing that tort liability must primarily minimize the costs of accidents and of accident avoidance and discussing other possible related social costs).
18. Strict liability makes the defendant internalize the full costs of the harm irrespective of the behavior of the victim. No liability makes the victims bear the full costs of the harm irrespective of the behavior of the injurer. Under either regime, therefore, only one of the parties is incentivized to invest in precautions. Where optimal prevention requires investments by both parties, strict liability and no liability are inefficient.
19. The first scholar to show how negligence standards can induce efficient levels of care both in unilateral and joint-care cases was John Prather Brown, Toward an Economic Theory of Liability, 2 J. Legal Stud. 323 (1973).
20. Subsequent writing exploring the efficiency of liability regimes has largely followed Brown's basic model. See, e.g., Landes & Posner, supra note 6, at 54-84; Steven Shavell, Economic Analysis of Accident Law 54-72 (1987).
21. In addition to the rule of simple negligence, reasonable-conduct regimes include negligence and strict liability with either contributory or comparative negligence. Under any of these regimes, one of the litigants can avoid liability by behaving according to the legal standard. An efficient legal standard, therefore, will make this litigant invest efficiently in prevention. Consequently, the other litigant faces the risk of bearing the harm and therefore also profits from investment in efficient precautions. So long as the legal standards correspond to efficient precaution, reasonable-conduct rules provide the incentives for optimal investment in avoidance. See, e.g., Landes & Posner, supra note 6, at 54-84; Brown, supra note 12, at 341-43; Shavell, supra note 12, at 5-32.
22. In his article, Brown himself indicates courts' possible difficulty in obtaining the necessary information for establishing efficient levels of care. Brown, supra note 12, at 343-47 (exploring the "Limited Information" model "where the court no longer knows what the social optimum is"). Addressing this concern, the law and economics literature that followed Brown has suggested that courts can solve the problem by a process in which the utility of untaken precautions is continuously evaluated. See, e.g., Landes & Posner, supra note 6, at 87 (describing courts' actual application of the Hand formula as "focus[ing] on the particular accident and on the particular inputs that could have prevented it" and arguing that such an approach allows courts to achieve optimal investment in precautions); Robert Cooter et al., Liability Rules, Limited Information, and the Role of Precedent, 10 Bell J. Econ. 366, 370 (1979) (arguing that under such a process "[t]he court eventually reaches the efficient standard by successive revisions");
23. Mark F. Grady, A New Positive Economic Theory of Negligence, 92 Yale L.J. 799, 814-18 (1983) (explaining that consistently applying a risk-utility test with respect to parties' neglected precautions allows courts to reach utility maximization without first identifying the efficient levels of care);
24. Claus Ott & Hans-Bernd Schäfer, Negligence as Untaken Precaution, Limited Information, and Efficient Standard Formation in the Civil Liability System, 17 Int'l Rev. L. & Econ. 15 (1997) (demonstrating that deciding liability based only on the utility of the parties' untaken precautions enables courts to maximize utility despite having no preexisting knowledge as to the efficient level of care).
25. Grady, supra note 2, at 661; see also Robert D. Cooter, Decentralized Law for a Complex Economy: The Structural Approach to Adjudicating the New Law Merchant, 144 U. Pa. L. Rev. 1643, 1679 (1996) ("According to [the Hand] rule, a defendant's untaken precaution is negligent if the burden of precaution is less than the expected savings in liability . . . ."); Grady, supra note 14, at 824 (explaining the informational and efficacy-based advantages of the untaken-precautions approach);
26. Reid Hastie & W. Kip Viscusi, What Juries Can't Do Well: The Jury's Performance as a Risk Manager, 40 Ariz. L. Rev. 901, 907 (1998) (explaining that, according to the Hand formula, "[i]f an accident's cost multiplied by its probability of occurrence exceeds the cost of untaken precautions, then in the event of a mishap, the defendant should be judged at least negligent"). In his recent writing, Brown seems to have accepted this answer, explaining that [t]o decide a case, it is not necessary to identify the standard of care; it is sufficient to determine whether or not the standard was met. Of course, one way for a plaintiff to meet his responsibility and show that a duty was breached is to find a precaution untaken, which, if taken, would have had a greater marginal benefit than its marginal cost. Brown, supra note 3, at 516.
27. Cooter & Ulen, supra note 3, at 335. Schäfer and Schönenberger have also argued that courts should use the untaken-precautions approach to determine the appropriate level of care: [I]t is very difficult for courts . . . to identify the efficient level of care in order to establish it as the legal standard . . . . Therefore, an alternative to decide whether an injurer was negligent or not without a specific standard of care would be, first, to ask what an injurer could have done (alternatively or in addition) to prevent the damage or to reduce the probability that it occurs. Then, the costs of the alternative or of the additional precaution activity are determined. If either the difference between the actual precaution costs and the costs of the alternative precaution activity or the costs of the additional precaution activity are less than the reduction in the total amount of expected damages as a result of the alternative or additional activity, the injurer will be liable. Hans-Bernd Schäfer & Andreas Schönenberger, Strict Liability Versus Negligence, in 2 Encyclopedia of Law and Economics 602 (Boudewijn Bouckaert & Gerrit De Geest eds., 2000);
28. see also Richard Craswell, Offer, Acceptance, and Efficient Reliance, 48 Stan. L. Rev. 481, 503 n.66 (1996) (arguing that in negligence cases, "rather than trying to assess the entire range of possible precautions" courts should "consider the efficiency of [the] untaken precaution" that the parties claim would have avoided the harm).
29. See, e.g., Richard A. Epstein, Cases and Materials on Torts 154-55 (Aspen Publishers 7th ed. 2000) ("[T]he skillful lawyer typically [proves unreasonable behavior] by pointing to some specific 'untaken precaution' that, if taken, could have prevented the accident that actually occurred.").
30. Professor Philip G. Peters has shown that the same approach characterizes jury decisions: Plaintiffs typically narrow the scope of the jury's inquiry by focusing upon an "untaken precaution" and alleging that a reasonable person would have undertaken it. With the task so confined, the jury need not determine the precise combination of safety precautions that would optimize social welfare. Instead, jurors examine the defendant's failure to take the specific precaution recommended by the plaintiff. Philip G. Peters, Jr., The Role of the Jury in Modern Malpractice Law, 87 Iowa L. Rev. 909, 948 (2002)
31. (quoting Mark F. Grady, Untaken Precautions, 18 J. Legal Stud. 139 (1989));
32. see also Timothy D. Lytton, Rules and Relationships: The Varieties of Wrongdoing in Tort Law, 28 Seton Hall L. Rev. 359, 375 (1997) (explaining that in practice "[t]he Hand formula . . . evaluates the cost-effectiveness of an untaken precaution").
33. Stephen G. Gilles, The Invisible Hand Formula, 80 Va. L. Rev. 1015, 1028-29 (1994).
34. Absent transaction costs, the factory can save investing $50 in the filter by "bribing" Pete to abstain from painting the house; any amount that is above Pete's expected net benefit of $20 and less than $50 will make both parties better off. In the context of tortious behaviors, however, transaction costs are prevalent and often prohibitive. Possible harm-doers in many cases cannot identify their potential victims ex ante; in other cases, the large number of parties makes negotiation especially costly. Even in our example, involving a single victim and a single defendant who might know each other prior to the occurrence of the harm, transaction costs characterizing such a "bilateral monopoly" situation may thwart the bargain. For discussion of possible transaction costs in such cases and for some empirical illustrations, see, for example, Ward Farnsworth, Do Parties to Nuisance Cases Bargain After Judgment? A Glimpse Inside the Cathedral, 66 U. Chi. L. Rev. 373 (1999) (examining twenty nuisance cases and finding no bargaining between the parties).
35. See Steven Shavell, Strict Liability Versus Negligence, 9 J. Legal Stud. 1, 2 (1980) (explaining that "level of care" defines the extent of a party's carefulness in carrying out his activity, whereas "level of activity" refers to the party's "choice of whether to engage in his activity or, more generally, . . . the level at which to engage in his activity"). Although both care and activity levels determine the number of accidents, Professor Shavell shows that courts usually focus only on the parties' level of care. As Shavell explains, to evaluate parties' level of activity, "courts would likely have to know much more than would normally have to be known to decide whether care, conventionally interpreted, was adequate." Id. at 23.
36. See Posner, supra note 6, at 178 (using the example of trains that may inflict harm to illustrate investments in "care" and "activity").
37. The $20 loss on the part of society is arrived at by subtracting the total social utility from the total social cost. The social cost is the cost of the precautions, which totals $120. Because the factory only produces $100, society loses $20, assuming that Pete behaves as a rational maximizer. If he does not and fails to invest in the precaution (painting), the social cost will be $180, which is the sum of the damage to his house ($130) and the (useless) filter ($50).
38. As noted earlier, conventional scholarship attributes courts' incompetence in determining the efficient level of activity to information insufficiency. See supra note 20. Hypothetical 2, however, suggests that parties' strategic behavior may also lead to socially undesirable levels of activity. At least in this context, courts might be able to provide the parties with incentives for efficient behavior by adjusting their conventional risk-utility analysis. See infra Part II.
39. As for the type of inefficiency, this example is an extension of the first hypothetical; the factory's production is socially desirable, and no investment in precautions should be made. Strategic investments aimed at increasing the effectiveness of other litigants' precautions may similarly involve the other two types of inefficiency (production is inefficient; investment in precautions is justified but excessive).
40. Assume, for example, that the damage to Pete's house is worth $200, the filter's cost is $50, and that the filter independently reduces the expected harm to Pete's house by $40. If Pete paints his house at a cost of $70, however, the filter is able to reduce the harm by $100. Painting the house and installing the filter is socially undesirable ($50 + $70 > $100). Yet, once Pete paints his house, the filter becomes cost-justified. By painting his house, Pete avoids a harm of $100 by investing only $70.
41. The hypotheticals of Pete and the factory demonstrate the risk that plaintiffs and defendants may attempt to shift prevention costs to one another. Strategic investments in prevention can also occur among potential harm-doers. See infra text accompanying note 95.
42. Professor Alan J. Meese discusses cases where investment in precaution by one party affects the prevention costs of other parties. See Alan J. Meese, The Externality of Victim Care, 68 U. Chi. L. Rev. 1201 (2001).
43. Focusing on instances where the marginal costs and benefits of possible precautions or activity levels are not fixed, Meese shows that "no regime of tort liability will cause injurers or victims to make proper activity choices in a joint care setting." Id. at 1229 (emphasis added). As the various hypotheticals concerning Pete and the factory have illustrated, where parties' preventions costs are interrelated, social disutility can also occur as a result of parties' inefficient levels of care where marginal costs and benefits are fixed and where unilateral investment or no investment is most efficient. Professors Dharmapala and Hoffman have also analyzed cases where parties' prevention costs are correlated, showing that parties may often choose among several "technologies," each of which is considered "due care" (for example, driving an SUV safely or driving a small car safely). Dhammika Dharmapala & Sandra A. Hoffman, Bilateral Accidents with Intrinsically Interdependent Costs of Precaution, 34 J. Legal Stud. 239, 240-41 (2005). Every such technology affects the prevention costs of other parties differently (the driver of a car behind an SUV has less visibility and hence must incur extra precaution costs). As Dharmapala and Hoffman demonstrate, since each party bears only his costs of prevention - the SUV driver does not consider the costs he imposes on other drivers - inefficiency may occur. Dharmapala and Hoffman thus discuss the possible problem of parties who may take precautions that inefficiently increase the prevention costs of other parties. Id. In contrast, as the above hypotheticals demonstrate, the risk of opportunistic precautions shows that parties may have an incentive to invest in precautions that reduce other parties' costs of prevention.
44. In their recent article, Professors Feldman and Kim discuss a case in which the defendant's conduct creates a 10% risk of $1000 harm (that is, expected damage of $100) that the plaintiff can reduce by half at a cost of $40, and the defendant can unilaterally eliminate at a cost of $60. Allan M. Feldman & Jeonghyun Kim, The Hand Rule and United States v. Carroll Towing Co. Reconsidered, 7 Am. L. & Econ. Rev. 523, 530-31 (2005). Using this example, Feldman and Kim show that under the conventional untaken-precautions approach (termed by Feldman and Kim the "conditional application"), defendants may escape liability despite their negligence. In this example, utility requires the defendant to invest $60 in prevention and the plaintiff to invest nothing. If the plaintiff invests $40, however, the defendant's precaution appears inefficient ($60 > $50); thus, where the plaintiff invests beyond the efficient level, the untaken-precautions approach may protect negligent defendants. Id. While highlighting the latter problem, Feldman and Kim do not discuss the alternative possibility where plaintiffs excessive investment may force the defendant to invest in inefficient precautions. Furthermore, Feldman and Kim's hypothetical does not explain the incentive for the plaintiff to take precautions beyond the efficient level. The preceding analysis concerning the risk of opportunistic precautions shows why, and under what circumstances, such behavior is likely.
45. 111 F.2d 611 (2d Cir. 1940).
46. Id. at 612 (emphasis added); see also Steven Shavell, Foundations of Economic Analysis of Law 191 n.22 (2004) ("Hand said that a party is negligent if he failed to take a precaution when its cost, which he called its 'burden,' was less than its expected benefit . . . .") (emphasis added). Shavell argues that the Hand formula is an exception from courts' general inclination not to think "in terms of the mathematical goal of minimizing" social costs. Id. at 191. Shavell, at any rate, does not discuss the problem of opportunistic precautions.
47. For an overview of these decisions, see Stephen G. Gilles, United States v. Carroll Towing Co.: The Hand Formula's Home Port, in Torts Stories 11, 18-19 (Robert L. Rabin & Stephen D. Sugarman eds., 2003). In none of the discussions of his risk-utility test did Hand consider the risk that parties might strategically invest in inefficient precautions. As his decision in Carroll Towing indicates, in evaluating the behavior of one party, Judge Hand applied his test "contingent on the actual behavior of the other party." Feldman & Kim, supra note 28, at 537-38.
48. Mesman v. Crane Pro Servs., 409 F.3d 846, 849 (7th Cir. 2005) (quoting United States v. Carroll Towing Co., 159 F.2d 169, 173 (2d Cir. 1947)).
49. See, e.g., Bhd. Shipping Co. v. St. Paul Fire & Marine Ins. Co., 985 F.2d 323, 327 (7th Cir. 1993) (holding that a litigant is negligent where "the burden (cost) of the precautions that he could have taken to avoid the accident . . . is less than the loss that the accident could reasonably be anticipated to cause . . . , discounted . . . by the probability that the accident would occur unless the precautions were taken"); see also Richard A. Posner, Tort Law: Cases and Economic Analysis 4 (1982) (explaining that under the Hand formula, assuming no more efficient precautions are available to the victim, "the injurer is liable only for those accidents that he could have avoided at a lower cost than the expected accident cost").
50. Black's Law Dictionary, citing Judge Posner, defines the "Hand formula" as "[a] balancing test" under which "the defendant is guilty of negligence if the loss caused by the accident, multiplied by the probability of the accident's occurring, exceeds the burden of the precautions that the defendant might have taken to avert it." Black's Law Dictionary 732 (8th ed. 2004).
51. Judge Posner's oversight is especially conspicuous considering his analysis of the opposite scenario, namely, cases where a party may take an efficient precaution after another party has failed to invest in prevention. Judge Posner and Professor Landes show that the former party often has a duty to eliminate the risk and explain the economic advantages of such a duty. See Landes & Posner, supra note 6, at 76 ("[W]here care is sequential and the injurer acts first - a defense of contributory negligence provides an incentive for the victim to take due care even though the injurer has been negligent."); see also infra note 67 (addressing Judge Posner and Landes's economic explanation of the scope of the duty to eliminate risks created by others). In contrast, Judge Posner and Landes do not discuss anywhere in their analysis the case in which efficient prevention of one party becomes possible only as a result of others' strategically inefficient investments.
52. Braun v. Soldier of Fortune Magazine, 968 F.2d 1110, 1115 (11th Cir. 1992). For similar language, see, for example, Trustant v. Cumberland & York Distributors, 538 A.2d 258, 264 (Me. 1988) ("[The risk-benefit] method of analysis requires a balancing of the importance of the societal interest and the probability and burden of potential injury to a plaintiff against the burden placed on a defendant if he were required to take precautions to prevent injury.").
53. Gen. Foods Corp. v. Valley Lea Dairies, 771 F.2d 1093, 1103 (7th Cir. 1985); see also McCall v. Wilder, 913 S.W.2d 150, 153 (Tenn. 1995) ("[A] risk is unreasonable and gives rise to a duty to act with due care if the foreseeable probability and gravity of harm posed by defendant's conduct outweigh the burden upon defendant to engage in alternative conduct that would have prevented the harm.").
54. 510 So. 2d 387, 387-88 (La. Ct. App. 1987).
55. Id. at 392.
56. Id. at 402 ("Under the circumstances of this record, we recognize . . . the duty of the shopping center owner to undertake reasonable efforts to shut and lock the door of the utility equipment room of the shopping center. The cost of reasonably maintaining a locked door is insignificant when compared to the injury that the open and unlocked door facilitated or contributed to.").
57. No. 88 C.A. 181, 1990 Ohio. App. LEXIS 2747, at *1-2 (Ohio Ct. App. June 29, 1990).
58. Id. at *4-5 (citing Thompson v. Ohio Fuel Gas Co., 224 N.E.2d 131, 136 (Ohio 1967)). Thompson, in turn, cited Conway v. O'Brien, 111 F.2d 611 (2d Cir. 1940). The Ohio Bell court implied that the burden on the plaintiff in drilling "test holes" to verify the location of the cable was lower than the possible damage. 1990 Ohio. App. LEXIS 2747 at *5.
59. No. 91-1695, 1992 WL 50196, at *1 (Wis. Ct. App. Jan. 14, 1992).
60. Id. at *1, *3.
61. Id. at *1-3. The actual pruning was done by Gagner, who had been hired by White and failed to appear in the lawsuit. The court found White liable for not taking cost-effective precautions to avoid the harm and for not inspecting the actual work (in addition to his negligence for failing to find out whether Gagner had the required insurance). Id. at *3.
62. In a recent article, Professors Robert Cooter and Ariel Porat have demonstrated another oversight in courts' conventional risk-utility analysis. Robert Cooter & Ariel Porat, Does Risk to Oneself Increase the Care Owed to Others? Law and Economics in Conflict, 29 J. Legal Stud. 19, 20-21 (2000). Cooter and Porat show that in calculating the benefit from a precaution that a party failed to take, courts only consider how this precaution could reduce the risk to others. Since many risky activities also incur "self risk," Cooter and Porat argue that a proper assessment of the precaution's utility also requires considering any benefit to the injurer himself. In failing to incorporate this benefit into the analysis, Cooter and Porat show that courts bring about suboptimal investment in precautions. At the same time, Cooter and Porat themselves appear to disregard the risk of opportunistic investments. Following the conventional articulation, Cooter and Porat urge courts to compare the costs of possible neglected precautions and their corresponding expected reduction in the risk of harm (including "risk to oneself"). See id.
63. See Restatement (Third) of Torts: Liability for Physical Harm §§1-3 (Proposed Final Draft No. 1, 2005).
64. See Steven Hetcher, The Jury's Out: Social Norms' Misunderstood Role in Negligence Law, 91 Geo. L.J. 633, 648 (2003) ("[T]he proposed Restatement explicitly evinces a utilitarian or economic conception of balancing . . . [and] explicitly equates its suggested balancing approach with the Hand Test . . . .");
65. Kenneth W. Simons, The Hand Formula in the Draft Restatement (Third) of Torts: Encompassing Fairness as Well as Efficiency Values, 54 Vand. L. Rev. 901, 902 (2001) (arguing that the drafters of the new Restatement have adopted the Hand formula as the definition for negligence).
66. The Restatement, following the conventional division in tort law, distinguishes between intentional harms (in which the wrongdoer desires to cause harm) and unintentional harms (in which harm is an unwanted result of the wrongdoer's behavior); recklessness and negligence comprise the category of unintentional harms. Under the proposed new draft of the Restatement, both recklessness and negligence are analyzed according to a cost-benefit analysis. Negligence refers to cases where the expected costs of certain conduct are higher than the expected benefits, and recklessness refers to cases where the costs are substantially higher. See Restatement (Third) of Torts: Liability for Physical Harm §§ 1-3 (Proposed Final Draft No. 1, 2005). Negligence is generally sufficient for the imposition of liability. In several contexts, however, courts and legislatures have established recklessness as the appropriate standard of tort liability. See, e.g., Kenneth W. Simons, A Restatement (Third) of Intentional Torts?, 48 Ariz. L. Rev. 1061, 1082 (2006) (discussing the conventional tort doctrine that absolves participants in recreational and sporting activities "from liability for ordinary negligence, and to permit liability only if they have acted 'recklessly or intentionally.'").
67. Finding the behavior of the injurer "reckless" is also often the basis for the imposition of over-compensatory damages. See, e.g., Victor E. Schwartz et al., Toward Neutral Principles of Stare Decisis in Tort Law, 58 S.C. L. Rev. 317, 356-57 (2006) (noting that since the late 1960s "'[r]eckless disregard' [has become] a popular standard for punitive damages liability").
68. Restatement (Third) of Torts: Liability for Physical Harm § 2 (Proposed Final Draft No. 1, 2005).
69. Id. § 3 cmt. e.
70. Id. § 3, Reporter's Note, cmt. i.
71. Id.
72. See id.
73. The hypotheticals in Part I assume a simple prevention model, in which parties' possible strategic behavior may occur in only a single stage. Harm prevention may involve more complicated cases, with a longer causal sequence of potential strategic investments; in such cases, courts' exploration regarding the character of the parties' investments may seem prohibitively costly. Complicated cases involving multiple stages of investments are, however, unlikely to raise the risk of strategic behavior. For illustration, consider an elaboration of Hypothetical 1: Assume that Pete must invest in two stages (rather than in only one) in order to allow the factory to prevent the harm by installing a filter. Assume, for example, that Pete cannot paint his house unless the nearby electric poles are relocated further from the house. Assume that if Pete invests $1 in moving the pole on his side, the factory may also move its pole at a cost of $1. Since Pete's investment in moving his pole does not yet allow the factory to prevent the harm, no efficient untaken precaution exists, and the factory has no incentive to make a similar investment. Moreover, a profit-maximizing factory would avoid moving its electric pole to ensure that Pete will not be able to paint his house.
74. See infra text accompanying notes 56-60.
75. See Posner, supra note 6, at 173 ("The law defines due care . . . as the care that is optimal if the other party is exercising due care.").
76. For example, § 466(a) of the Restatement (Second) of Torts states that "[t]he plaintiffs contributory negligence may be . . . intentional and unreasonable exposure of himself to danger created by the defendant's negligence, of which danger the plaintiff knows or has reason to know." Section 302 A similarly holds that "[a]n act or an omission may be negligent if the actor realizes or should realize that it involves an unreasonable risk of harm to another through the negligent or reckless conduct of the other or a third person." See also Judge Posner's decision in Davis v. Consolidated Rail Corp., which expresses the same principle: [W]e were careful to qualify our statement of the rule that a potential injurer is entitled to assume that potential victims will exercise due care, by saying that this was true "in general." A certain amount of negligence is unavoidable . . . . Potential injurers may therefore be required to take some care for the protection of the negligent, especially when the probability of negligence is high or the costs of care very low. 788 F.2d 1260, 1266 (7th Cir. 1986).
77. For an overview of cases in which courts imposed such a duty, see generally David W. Barnes & Rosemary McCool, Reasonable Care in Tort Law: The Duty to Take Corrective Precautions, 36 Ariz. L. Rev. 357 (1994).
78. See, e.g., Bd. of Water Works Trustees v. Alvord, Burdick & Howson, 706 F.2d 820, 825 n.6 (8th Cir. 1983) ("A defendant who owes a duty of care to another is often required to anticipate that the other will be negligent, and the defendant often has a duty to take precautions against the negligence of the other.").
79. See, e.g., Turner v. Roesner, 549 N.E.2d 1287, 1291 (Ill. App. Ct. 1990) ("[E]ven though he was within his own lane and driving at less than the posted speed limit, the defendant was under a duty to exercise due care under the circumstances to avoid a collision with a driver proceeding on the wrong side of the road."); Recommended Arizona Jury Instructions (Civil) 41 (2d ed. 1991) ("A driver is entitled to assume that another motorist will proceed in a lawful manner . . . unless it should become apparent to him, acting as a reasonably careful person, that the other motorist is not going to obey the laws of the road."). For more examples, see Barnes & McCool, supra note 58, at 362 n.12, 373 n.46.
80. The decision of the court in United States v. Carroll Towing Co., 159 F.2d 169 (2d Cir. 1947), discusses such a duty in the maritime context. Judge Hand found the plaintiff (the company that owned the barge) liable after it failed to take compensating precautions, given the expected negligence of the defendant: [B]arges were being constantly 'drilled' in and out. Certainly it was not beyond reasonable expectation that, with the inevitable haste and bustle, the work might not be done with adequate care. In such circumstances we hold . . . that it was a fair requirement that the Conners Company should have a bargee aboard . . . . Id. at 174; see also Garr v. Union Carbide Corp., 589 F.2d 147, 150 (3d Cir. 1978) (discussing the responsibility of a municipality for injuries resulting from a defective sidewalk and holding that a person has a duty to foresee the negligence of others "where the injured party had prior knowledge of the defendant's negligence").
81. Under jurisdictions that apply the doctrine of "last clear chance," parties who fail to eliminate risks created by others often shoulder the entire liability. In most jurisdictions, last clear chance was replaced by the general doctrine of "comparative negligence." Under the latter doctrine, the exact division of liability depends on the relative fault of the parties. See Prosser and Keeton on the Law of Torts, supra note 4, at §§ 66-67 (discussing the distribution of liability under last clear chance and comparative negligence).
82. Landes and Judge Posner describe this advantage: But there is an important (and efficient) exception to the principle that the victim's duty of due care is limited to taking the care that would be optimal to prevent injuries by non-negligent injurers: if the danger posed by the injurer's activity is very conspicuous, the potential victim may not ignore the danger without being deemed contributorily negligent. Landes & Posner, supra note 6, at 90.
83. For an early observation concerning the risk of strategic conduct under the duty to take "compensatory precautions," see Gary T. Schwartz, Contributory and Comparative Negligence: A Reappraisal, 87 Yale L.J. 697, 708 (1978) (commenting that under a duty to avert a risk created by the negligence of another party, "the party with the earlier opportunity, knowing of the rule, might deliberately err so as to shift the safety expense to the party with the subsequent opportunity" and concluding that where the costs of prevention of the first party are lower, such a rule results in inefficiency (footnote omitted)).
84. For a detailed recent economic analysis of the risk, see Thomas J. Miceli, Sequential Care Torts and Strategic Behavior, in Economics of the Law 58-70 (1997).
85. Mark F. Grady, Common Law Control of Strategic Behavior: Railroad Sparks and the Farmer, 17 J. Legal Stud. 15, 18 (1988); see also Miceli, supra note 64, at 64-65 (demonstrating how courts have limited the application of the duty to take compensatory precautions only to cases where risk was created inadvertently).
86. Grady, supra note 65, at 19.
87. See, e.g., Mark F. Grady, Multiple Tortfeasors and the Economy of Prevention, 19 J. Legal Stud. 653, 665 ("A purely legal control on strategic behavior was for the courts to make the second party's obligation to use corrective precaution dependent on the first party's having been inadvertently rather than willfully negligent."); see also Landes & Posner, supra note 6, at 90 ("The temptation of potential injurers deliberately to create palpable dangers in order to induce potential victims to take excessive precautions is held in check by the fact that contributory negligence is not a defense to intentional or reckless conduct.").
88. See, for example, Anderson v. Payne, 54 S.E.2d 82, 86 (Va. 1949), in which the court refused to find a negligent driver liable as "[t]he plaintiff, possessing the full use of her faculties, was at all times able to prevent the mishap by the exercise of ordinary prudence." Rather than acting to prevent the accident, "she deliberately and knowingly elected to walk on the forbidden side of the road, and thus actively exposed herself to danger." Id.; see also Westbrook v. Washington Gas & Light Co., 748 A.2d 437, 441-42 (D.C. 2000) (rejecting restaurant owner's negligence case against gas company based on the claim that the gas company's employee saw the owner in the restaurant during the gas leak and did not make him leave, as there was "no evidence that he was physically unable to leave the restaurant, . . . or that someone instructed him to remain inside the restaurant"); Watson v. White, 298 S.E.2d 174, 176 (N.C. Ct. App. 1982), rev'd, 308 S.E.2d 268 (N.C. 1983) (discussing the various factors of last-clear chance and holding that a defendant-driver has a duty to eliminate a risk created by the plain tiff-pedestrian only when the latter put himself in "a position of peril to which he was inadvertent").
89. See, e.g., Venzor v. Santa Barbara Elks Lodge No. 613, 128 Cal. Rptr. 353, 359 (Ct. App. 1976) (holding that the defendant has a duty to take compensatory precautions only where the plaintiff "is totally unaware of his danger" and that where the plaintiff created the risk deliberately, the defendant's negligence is not a proximate cause when injury occurs (internal citation omitted)).
90. See, e.g., Sinai v. Polinger Co., 498 A.2d 520, 524 (D.C. 1985) (explaining that under assumption of risk doctrine, where a plaintiff "elects to proceed in the face of a known danger, the plaintiff is regarded as having consciously relieved the defendant of any duty which he otherwise owed the plaintiff").
91. See Donald Wittman, First Come, First Served: An Economic Analysis of "Coming to the Nuisance," 9 J. Legal Stud. 557, 566 (1980)
92. [hereinafter Wittman, First Come]; see also Donald Wittman, Coming to the Nuisance, in 1 The New Palgrave Dictionary of Economics and the Law 292 (1998).
93. For a similar discussion, see Landes & Posner, supra note 6, at 50-51 (discussing a nuisance dispute involving homeowners moving next to a factory and demonstrating that applying an ex post risk-utility analysis, where homeowners could have located elsewhere, might encourage strategic behavior on the part of the homeowners).
94. See, e.g., Wittman, First Come, supra note 71, at 558-66 (demonstrating that courts' adjudication in nuisance disputes deters strategic behavior on the part of both potential plaintiffs and defendants).
95. 321 N.W.2d 182, 184-85 (Wis. 1982).
96. Id. at 192 (holding that whether the "plaintiff could have avoided any harm by locating his own house in a better place" is a relevant factor in deciding the case).
97. See Wittman, First Come, supra note 71, at 564 ("[W]hen economic efficiency dictates that the prior activity should not have the right, the courts often reject the doctrine of coming to the nuisance and give little weight to priority of occupation . . . . [W]hen economic efficiency dictates that the prior activity should have the right to continue, priority of occupation is given substantial weight in the court's deliberations.").
98. In both cases of strategic conduct (avoiding investments in efficient precautions and investments in inefficient precautions), the information that the plaintiff must possess to undertake her strategic behavior is identical. The plaintiff is only required to anticipate that, subsequent to her own strategic behavior, the defendant will be able to avert the harm at least cost.
99. Courts' decisions with respect to another related form of opportunistic behavior lend further support to their ability to discourage strategic conduct. The preceding analysis has demonstrated parties' incentives in making inefficient investments in precaution in order to affect other parties' burden of avoidance. Potential litigants, however, may also attempt to avoid responsibility by manipulating their own prevention costs. Consider, for illustration, the facts of a recent nuisance case, Penland v. Redwood Sanitary Sewer Service District, 965 P.2d 433 (Or. Ct. App. 1998). The defendants, district officials, ran a composting operation at a sewage treatment facility. The composting operation resulted in an unpleasant odor. The plaintiffs, nearby residents, demanded that the facility be relocated. Given the large size of the facility, relocation costs were especially high. Nevertheless, and despite its support for a balancing test, the court decided in favor of the plaintiffs. As it turned out, the defendants anticipated the risk of nuisance claims and therefore augmented their prevention costs by expanding their original investments in the facility. Finding no objective justifications for defendants' additional investments, the court disapproved the nuisance. Id. at 439-40.
100. See, e.g., Dharmapala & Hoffman, supra note 27, at 242 ("[T]ort rules allow for accident losses to be shifted between the parties but make no such provision for shifting precaution costs. In particular, there is no cause of action for one party to recover its precautions costs, or part thereof, from the other.").
101. See, e.g., Emily Sherwin & Maimon Schwarzschild, Epstein and Levmore: Objections from the Right?, 67 S. Cal. L. Rev. 1451, 1460-61 (1994) ("[A] restitution remedy would come into play more often than a damage remedy, and hence would be more costly to administer in the long run. With a damage rule in place, most actors would take precautions as required by the rule, and so avoid legal sanctions. Under a regime of restitution, many would take precautions and claim reimbursement . . . .").
102. While discouraging strategic behavior, applying a rule of restitution does not affect parties' incentives to take precautions where prevention is efficient. In such cases, it affects only the distribution of the prevention costs between the parties. Consider first a simple case in which efficient prevention requires that the defendant invests $30 unilaterally to avoid a harm of $100. The combined regime increases the incentive of the defendant to avoid the harm, not only because he escapes liability, but also because the defendant may also collect for his investment. Similarly, the combined regime will lead to efficient prevention in bilateral precaution cases. Consider a case where a harm of $100 can be prevented if the plaintiff and the defendant invest $20 and $30, respectively. Courts' focus on the utility of untaken precautions mandates that the plaintiff invest in prevention. Only if the plaintiff invests the $20 can she show that the defendant is able to prevent the harm at a cost lower than the expected harm. Under the combined regime the defendant will be entitled to recovery, given that his $30 investment in precautions eliminates $100 of harm. From the plaintiff's perspective, however, paying the defendant is not prohibitive. The plaintiff is better off paying $50 ($20 + $30) in prevention than suffering $100 in harm.
103. Guido Calabresi & A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 Harv. L. Rev. 1089 (1972).
104. Id. at 1116-20.
105. Judge Calabresi and Melamed's example involves a case where the defendant refrains from his harm-causing activity. Rule four may equally be applied in cases where the plaintiff is entitled to force the defendant to take precautions (rather than stopping the activity) while reimbursing the defendant for the costs of the precautions. For such an extension of rule four, see, for example, Saul Levmore, Unifying Remedies: Property Rules, Liability Rules, and Startling Rules, 106 Yale L.J. 2149, 2152 (1997).
106. Calabresi & Melamed, supra note 82, at 1117-21 (demonstrating the advantage of rule four).
107. See generally Alon Harel & Assaf Jacob, An Economic Rationale for the Legal Treatment of Omissions in Tort Law: The Principle of Salience, in 3 Theoretical Inquiries in Law 413, 448-49 (2002) (discussing the incentives structure in cases in which efficient prevention can be carried out by one of many individuals and demonstrating the risk of dilution of liability).
108. Rescue cases (such as a drowning person at the beach) provide a paradigmatic example of circumstances in which any of several individuals can efficiently, and with equal costs, prevent the harm. As Professor Harel and Jacob show, the problem of "dilution of liability" in such cases may explain the special treatment of omissions in tort law. Because making all potential rescuers responsible for the harm may provide insufficient incentives, tort rules avoid imposing liability on all rescuers. Instead, different tort doctrines identify a "salient" individual and make only her liable for the harm. Id. at 432-45.
109. Id. at 449.
110. "If both these principles are adopted, the actual rescuer's cost will be only 0.1, which will be equal to the cost borne by every other individual potential rescuer. If all potential injurers fail to take preventive measures, the cost to each one of them will be 0.5." Id. The combined regime creates incentives for each party to eliminate the risk. Risk abatement still might not happen, however, if each of the individuals on the beach assumes that (given the incentives) others will save the drowning person.
111. Wittman, supra note 5, at 72-74 (demonstrating that imposing a duty on the first party to compensate the second party for her "compensatory precautions" costs removes the risk of deliberate risky behavior by the first party); see also Susan Rose-Ackerman, Dikes, Dams, and Vicious Hogs: Entitlement and Efficiency in Tort Law, 18 J. Legal Stud. 25, 27-33 (1989) (discussing reimbursement for investments in efficient precautions as a means to solve the risk of deliberate negligent conduct).
112. In Spur Industries v. Del E. Webb Development Co., 494 P.2d 700, 708 (Ariz. 1972), the Arizona Supreme Court required the plaintiff developer to pay damages to the defendant feedlot that would be shut down by an injunction in its nuisance suit. Yet, "Rule 4 has never been used in a nuisance case since Spur." Henry E. Smith, Exclusion and Property Rules in the Law of Nuisance, 90 Va. L. Rev. 965, 1010 (2004).
113. See Wittman, supra note 5, at 77-82 (showing that, as opposed to contract law, conventional tort doctrines require individuals to compensate for the unsafe behavior of others but grant them no right to reimbursement). Nevertheless, Professor Wittman argues that the existence of criminal sanctions removes the risk of strategic behavior in the context of sequential conduct. Although the first party is not required to compensate the second party for his prevention costs, she might well be required to pay a fine for her negligent behavior. According to Wittman, this combination of criminal sanctions on the one hand and a duty to take compensatory precautions on the other hand creates an optimal incentives system. The risk of criminal sanctions serves to encourage the first party to behave with due care. Where the first party acts unreasonably, tort liability motivates the second party to invest in prevention. Id. at 80-82. While correct, Wittman's argument again illustrates the oversight in tort law scholarship concerning the risk of opportunistic precautions. The first party's negligent behavior may trigger criminal liability only when it involves a failure to invest in efficient precautions; in contrast, criminal liability is unlikely where the first party deliberately invests in inefficient precautions. Wittman's argument therefore is relevant only in the case of strategic negligence.
114. Calabresi & Melamed, supra note 82, at 1119 (discussing the difficulty of applying rule four in cases involving multiple victims).
115. The combined regime might also be opposed on corrective justice grounds. Under the suggested regime, victims might be required not only to bear their harm but also to reimburse the defendants for their investments in efficient precaution. From an efficiency perspective, however, fair distribution concerns are postponed to a second stage. After implementing rules ensuring the maximum social utility, lawmakers are free to redistribute wealth as they please. See Louis Kaplow & Steven Shavell, Fairness Versus Welfare, 144 Harv. L. Rev. 961, 1028-38 (2001) (arguing that tort doctrines should maximize social welfare before addressing fairness considerations).
116. Since X does not raise its smokestack, the victim can show that X ceasing its production, at a cost of $70, is the most efficient untaken precaution. If X does not stop its activity, it will be required to pay $90 in compensation.
117. Rejecting the decisions of previous courts, the Second Circuit held that we find no basis for reading into this language a distinction between so-called "innocent" parties and parties that, if sued, would be held liable under section 107(a). Section 107(a) makes its cost recovery remedy available, in quite simple language, to any person that has incurred necessary costs of response, and nowhere does the plain language of section 107(a) require that the party seeking necessary costs of response be innocent of wrongdoing. Consol. Edison Co. of N.Y. v. UGI Utils., 423 F.3d 90, 99-100 (2d Cir. 2005) (citation omitted). Other courts, however, have expressed a different opinion. See, e.g., United Techs. Corp. v. Browning-Ferris Indus., 33 F.3d 96, 100 (1st Cir. 1994) ("[I]t is sensible to assume that Congress intended only innocent parties - not parties who were themselves liable - to be permitted to recoup the whole of their expenditures.").
118. For a similar state law, see Connecticut Water Pollution Control Act - Reimbursement for Containment or Removal Costs: Liability for Certain Acts or Omissions, Conn. Gen. Stat. Ann. § 22a-452 (West 2006) (allowing parties who mitigate the effects of hazardous material to collect for their mitigation costs).
119. Lester Brickman, Ethical Issues in Asbestos Litigation, 33 Hofstra L. Rev. 833, 894-95 (2005) ("[D]efendants in asbestos litigation may be divided into two classes: 1) manufacturers, installers or sellers of asbestos-containing products; and 2) owners of premises which have asbestos-containing products on their premises, exposures to which have allegedly resulted in injury." (footnote omitted)).
120. See, e.g., 80 S. Eighth St. Ltd. P'ship v. Carey-Canada, Inc., 486 N.W.2d 393, 398 (Minn. 1992) ("We believe that allowing 80 South Eighth to proceed in tort for damages relating to the maintenance, removal and replacement of asbestos-containing fireproofing advances both the rationale and public policy objectives of tort law...."). For a comprehensive discussion, see generally Richard C. Ausness, Tort Liability for Asbestos Removal Costs, 73 Or. L. Rev. 505 (1994).
121. See, e.g., 57 Am. Jur. 2d Municipal, Etc. Tort Liability § 136 (2006) (discussing the duty of municipalities to abate nuisance created by the negligent behavior of private parties).
122. See David C. McIntyer, Note, Tortfeasor Liability for Disaster Response Costs: Accounting for the True Costs of Accidents, 55 Fordham L. Rev. 1001, 1019-34 (1987) (discussing public authorities' right to reimbursement for costs incurred in the process of eliminating risks created by the negligent behavior of private citizens and companies).
123. For a comprehensive overview, see Timothy D. Lytton, Should Government Be Allowed to Recover the Costs of Public Services from Tortfeasors?: Tort Subsidies, the Limits of Loss Spreading, and the Free Public Services Doctrine, 76 Tul. L. Rev. 727, 731-45 (2002) (discussing common law doctrines and statutes under which public authorities have been able to collect prevention costs from tortfeasors).
124. Americans with Disabilities Act, 42 U.S.C. §§ 12101,12111-12117 (2000). On the employers' duty to provide accommodation, see Stewart J. Schwab & Steven L. Willborn, Reasonable Accommodation of Workplace Disabilities, 44 Wm. & Mary L. Rev. 1197 (2003);
125. Michael Ashley Stein, The Law and Economics of Disability Accommodations, 53 Duke L.J. 79, 81-102 (2003).
126. See, e.g., Van Stan v. Fancy Colours & Co., 125 F.3d 563,570 (7th Cir. 1997) ("A plaintiff cannot recover under the ADA if through his own fault he fails to control an otherwise controllable illness."); Siefken v. Vill. of Arlington Heights, 65 F.3d 664, 667 (7th Cir. 1995) (holding that if an employee's impairment is "due to his failure to control a controllable disability, he cannot state a cause of action under the ADA"); Tangires v. Johns Hopkins Hosp., 79 F. Supp. 2d 587,596 (D. Md. 2000) ("A plaintiff who does not avail herself of proper treatment is not a 'qualified individual' under the ADA."). For a review of similar decisions, see Jill Elaine Hasday, Mitigation and the Americans with Disabilities Act, 103 Mich. L. Rev. 217, 237-39 (2004).
127. See, e.g., Hasday, supra note 104, at 219 (claiming that plaintiffs seeking Title I protection should be under a duty to take only "reasonable" mitigating measures); Stephanie A. Fishman, Note, Individuals with Disabilities but Without Mitigating Measures, 46 Wayne L. Rev. 2013, 2041 (2000) (arguing that individuals forfeit ADA protection only if their failure to mitigate is unreasonable).
128. See, e.g., Debra Burke & Malcolm Abel, Ameliorating Medication and ADA Protection: Use it and Lose it or Refuse it and Lose it?, 38 Am. Bus. L.J. 785, 814 (2001) (suggesting that in "correctable disabilities" cases, courts should apply a test that "balances the burden on the employer versus the responsibility of the employee");
129. Lisa E. Key, Voluntary Disabilities and the ADA: A Reasonable Interpretation of "Reasonable Accommodations," 48 Hastings L.J. 75, 96-98 (1996) (arguing that courts should apply a cost-benefit analysis and require employees seeking the protection of the ADA to invest only in "reasonable" accommodation);
130. Lawrence D. Rosenthal, Requiring Individuals to Use Mitigating Measures in Reasonable Accommodation Cases After the Sutton Trilogy: Putting the Brakes on a Potential Runaway Train, 54 S.C. L. Rev. 421, 466-67 (2002) (advocating a test that would balance the employees' and employers' interests).
131. But cf. Sarah Shaw, Comment, Why Courts Cannot Deny ADA Protection to Plaintiffs Who Do Not Use Available Mitigating Measures for Their Impairments, 90 Cal. L. Rev. 1981, 2007-08 (2002) (arguing that employees should not be required to invest in mitigation, even when the employer's cost of accommodation is higher).
132. A full scale evaluation of the ways the risk of strategic investments under the ADA could be resolved is beyond the scope of this Article, but the preceding discussion does suggest that a version of one of the two alternatives to the untaken-precautions approach could be applied. First, courts could remove the incentives for "opportunistic accommodation" by extending the suggested test in "correctable" disability cases. Under this extended test, courts will evaluate not only the advantages of "untaken accommodation" but also the desirability of the accommodation in which the employers have already invested. Second, requiring the employers to reimburse qualified employees for their mitigation costs will make strategic investments in accommodation ineffective. For an exploration of a possible regime of a duty to mitigate with a right to reimbursement, see, for example, Key, supra note 106, at 98 (suggesting a rule of reimbursement for certain types of mitigating measures).