Civil recourse theory's reductionism

Indiana Law Journal

Volumn 88, Issue 2, 2013, Pages 449-468

  Calabresi, Guido ^a  

^a YALE UNIVERSITY   (United States)

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EID: 84878218505     PISSN: 00196665     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (108)

1. Friedrich Kessler, one of the grand theorists of contract law, taught at Yale Law School first from 1935-1938 and again from 1947-1970. His classic article, Contracts of Adhesion-Some Thoughts About Freedom of Contract, 43 COLUM. L. REV. 629(1943), has a continuing vitality in contract law scholarship;
2. see also John K. McNulty, A Student's Tribute to Fritz Kessler, 104 YALE L. J. 2133 (1995).
3. Desiano v. Warner-Lambert & Co., 467 F.3d 85 (2d Cir. 2006).
4. John C. P. Goldberg & Benjamin C. Zipursky, Torts as Wrongs, 88 TEX. L. REV. 917, 929 (2010) [hereinafter Torts as Wrongs];
5. see also John C. P. Goldberg & Benjamin C. Zipursky, The Restatement (Third) and the Place of Duty in Negligence Law, 54 VAND. L. REV. 657, 747 (2001); (Pubitemid 33656597)
6. John C. P. Goldberg & Benjamin C. Zipursky, Unrealized Torts, 88 VA. L. REV. 1625 (2002).
7. Torts as Wrongs, supra note 4, at 919.
8. Torts is not unidimensional, nor is accident law only about the allocation of loss. See GUIDO CALABRESI, THE COSTS OF ACCIDENTS: A LEGAL AND ECONOMIC ANALYSIS 26 (1970) [hereinafter The Costs of Accidents] (acknowledging the need to consider individual views of what seems just and not economic considerations only);
9. see generally Guido Calabresi, The Complexity of Torts-The Case of Punitive Damages, in EXPLORING TORT LAW (M. Stuart Madden ed., 2005) [hereinafter The Complexity of Torts] (arguing that torts is not one dimensional but fulfills multiple functions as evidenced by punitive damages' role in (1) enforcing social norms through the use of private attorneys general, (2) fulfilling a deterrent role by punitive damages' multiplier role, (3) the Tragic Choice function as reflected in the Ford Pinto products liability case, (4) enabling recovery of generally nonrecoverable compensatory damages, and (5) permitting the righting of public wrongs);
10. cf. Guido Calabresi, Neologisms Revisited, 64 MD. L. REV. 736, 743 (2005) (explaining four functions of tort law as I saw them to be when I wrote The Costs of Accidents: " (1) the reduction of the sum of accident costs and of safety costs; (2) distributional equity; (3) achieving most effectively the desired degree of interpersonal and intertemporal spreading; and, (4) the minimization of the administrative costs of achieving (1), (2), and (3) ");
11. John C. P. Goldberg & Benjamin C. Zipursky, Accidents of the Great Society, 64 MD. L. REV. 364 (2005) (arguing that The Cost of Accidents was about primary cost reduction rather than the norms of responsibility).
12. Guido Calabresi, An Introduction to Legal Thought: Four Approaches to Law and to the Allocation of Body Parts, 55 STAN. L. REV. 2113, 2151 (2003).
13. "Generally speaking, courts are unlikely to be reductionist. Judges derive law from many sources. The problem arises from the ever-increasing incursions by federal courts into the tort process, and is worsened when the incursion is by the Supreme Court." The Complexity of Torts, supra note 6, at 333 (criticizing the U. S. Supreme Court's reduction of the multiple functions of punitive damages to the single factor of retributory justice).
14. See generally JULES L. COLEMAN, RISKS AND WRONGS (1992);
15. Jules Coleman, Corrective Justice and Wrongful Gain, 11 J. LEGAL STUD. 421 (1982) (explaining corrective justice theory of tort law).
16. See generally John C. P. Goldberg & Benjamin C. Zipursky, Civil Recourse Revisited, 39 FLA. ST. U. L. REV. 341 (2011);
17. Torts as Wrongs, supra note 4.
18. Barbara H. Fried, The Limits of a Nonconsequentialist Approach to Torts, 18 LEGAL THEORY 231, 231 (2012).
19. See Ernest J. Weinrib, Corrective Justice, 77 IOWA L. REV. 403, 403 (1992) (noting that Aristotle coined the term "corrective justice").
20. Sir William Blackstone published Commentaries on the Laws of England from 1765-1769. Volume III of the Commentaries, entitled Private Wrongs, covers the tort law of the mid-eighteenth century. See John H. Langbein, Introduction to Book III, in 3 WILLIAM BLACKSTONE, COMMENTARIES iii (photo, reprint 1979) (describing private wrongs that prefigure intentional torts);
21. see also John C. P. Goldberg, The Constitutional Status of Tort Law: Due Process and the Right to a Law for the Redress of Wrongs, 115 YALE L. J. 524, 560 (2005) ("With certain heresies excised, the Commentaries provided the basic text for late-colonial and early-American legal education and practice. American jurists were thus quite familiar with the principle that government owes its citizens laws and institutions for declaring and vindicating basic rights, including the right to a law for the redress of wrongs.").
22. Compare Harless v. Boyle-Midway Div., 594 F.2d 1051 (5th Cir. 1979)
23. (holding manufacturer liable for death of teenager from sniffing PAM, a non-stick spray used in cooking, because manufacturer was aware of a large number of prior similar deaths and injuries), Spruill v. Boyle-Midway, Inc., 308 F.2d 79 (4th Cir. 1962) (finding it to be foreseeable that an unwarned mother would use highly toxic furniture polish and an infant would drink it and be poisoned)
24. Bigbee v. Pac. Tel. & Tel. Co., 665 P.2d 947 (Cal. 1983) (holding that the telephone company owed a duty to a customer in locating the telephone booth too close to a busy Los Angeles street where plaintiff was struck by a drunk driver)
25. Easton v. Strassburger, 199 Cal. Rptr. 383 (Cal. Ct. App. 1984) (recognizing that real estate brokers have an affirmative duty to inspect homes that they sell and must disclose all material facts affecting property values)
26. Ollison v. Weinberg Racing Ass'n, 688 P.2d 847 (Or. Ct. App. 1984) (imposing dram shop liability on racetrack that celebrated fan appreciation night by selling beer at its concession stand for less than half the usual price)
27. and Ueland v. Reynolds Metals Co., 691 P.2d 190 (Wash. 1984) (recognizing a child's cause of action for negligent loss of parental consortium)
28. with THC Holdings Corp. v. Tishman, Nos. 93 Civ. 5393 (KMW), 95 Civ. 4422
29. 1998 U. S. Dist. LEXIS 8538
30. 1998 WL 305639 (S. D. N. Y. June 9, 1998) (holding no special relationship existed between investment bank and corporate client giving rise to tort-based duty independent of parties' contractual obligations)
31. Holdampf v. A. C. & S., Inc., 840 N. E.2d 115 (N. Y. 2005) (holding that the Port Authority of New York and New Jersey owed no duty of care to the wife of an employee exposed to asbestos while laundering her husband's clothing)
32. Hamilton v. Beretta U. S. A. Corp., 750 N. E.2d 1055 (N. Y. 2001) (holding that a manufacturer of firearms owed no duty to persons harmed by their misuse)
33. Purdy v. Pub. Adm'r, 526 N. E.2d 4, 7 (N. Y. 1988) (noting that "common law in the State of New York does not impose a duty to control the conduct of third persons to prevent them from causing injury to others.... This is so... even where 'as a practical matter' defendant could have exercised such control")
34. Becker v. Schwartz, 386 N. E.2d 807 (N. Y. 1978) (declining to recognize an action for wrongful life)
35. and Yania v. Bigan, 155 A.2d 343 (Pa. 1959) (holding that the defendant was not liable for encouraging another to jump into a pit and then refusing to help him escape drowning).
36. Pulka v. Edelman, 358 N. E.2d 1019 (N. Y. 1976).
37. Strauss v. Belle Realty Co., 482 N. E.2d 34, 36 (N. Y. 1985) (citations omitted).
38. [1875] 10 L. R. Exch. 261 (Eng.).
39. In England the requirement of fault in cases of direct injury to plaintiffs by defendants is generally dated to Baron Bramwell's opinion in Holmes, 10 L. R. Exch. 261.
40. In many of the states of the United States the requirement was imposed earlier. The opinion most frequently cited is that of Chief Justice Lemuel Shaw in Brown v. Kendall, 60 Mass. (6 Cush.) 292 (1850).
41. Ken Oliphant, Rylands v Fletcher and the Emergence of Enterprise Liability in the Common Law, in EUROPEAN TORT LAW 2004, at 81, 106 (Helmut Koziol & Barbara C. Steininger eds., 2004) (discussing the dicta in Holmes v. Mather).
42. Holmes, 10 L. R. Exch. at 267.
43. "David Ricardo (1772-1823), a student of James Mill, is a pivotal figure in the history of economic thought" and was a leading utilitarian. MARK PERLMAN & CHARLES R. MCCANN JR., THE PILLARS OF ECONOMIC UNDERSTANDING: IDEAS AND TRADITIONS 263-64 (1998) (discussing David Ricardo's utilitarianism as "steeped in the Utilitarianism of Bentham and James Mill").
44. CHRIS GOODRICH, ANARCHY AND ELEGANCE: CONFESSIONS OF A JOURNALIST AT YALE LAW SCHOOL 78-79 (1991).
45. 733 N. E.2d 184 (N. Y. 2000).
46. See Torts as Wrongs, supra note 4.
47. For a preliminary description of that explanation, see GUIDO CALABRESI, IDEALS, BELIEFS, ATTITUDES, AND THE LAW: PRIVATE LAW PERSPECTIVES ON A PUBLIC LAW PROBLEM (1985).
48. See generally Charles Nesson, Agent Orange Meets the Blue Bus: Factfinding at the Frontier of Knowledge, 66 B. U. L. REV. 521 (1986) (discussing the problem of probabilistic proof).
49. See Berry v. Sugar Notch Borough, 43 A. 240 (Pa. 1899).
50. See, e.g., Moore v. Paine Webber, Inc., 189 F.3d 165, 173 (2d Cir. 1999) (Calabresi, J., concurring) (explaining the distinction between loss causation and transaction causation);
51. see also Schlick v. Penn-Dixie Cement Corp., 507 F.2d 374, 380 (2d Cir. 1974) (stating that a plaintiff in a securities fraud case had to prove "loss causation-that the misrepresentations or omissions caused the economic harm-and transaction causation-that the violations in question caused the appellant to engage in the transaction in question").
52. But see Bastian v. Petren Res. Corp., 892 F.2d 680, 685 (7th Cir. 1990) (Posner, J.) ('"Loss causation' is an exotic name-perhaps an unhappy one... for the standard rule of tort law that the plaintiff must allege and prove that, but for the defendant's wrongdoing, the plaintiff would not have incurred the harm of which he complains." (citation omitted)).
53. "Loss causation connects the defendant's misrepresentation or omission and the plaintiff's economic loss.... The mere purchase of a security at an inflated price does not by itself prove loss causation. " Randy C. Joshi, Catherine F. Madrid & Lee-Anne V. Mulholland, Causation Issues and Expert Testimony, in LITIGATION SERVICES HANDBOOK: THE ROLE OF THE FINANCIAL EXPERT 3. 10 (Roman L. Weil, Daniel G. Lentz & David P. Hoffman eds., 5th ed. 2012).
54. Cf. "Loss causation requires the plaintiff show that the alleged misrepresentations or omissions resulted in the claimed losses to the plaintiff-a foreseeability or a proximate cause requirement." ALAN R. PALMITER, SECURITIES REGULATION: EXAMPLES AND EXPLANATIONS 375 (2008) (emphasis in original).
55. See John C. P. Goldberg & Benjamin C. Zipursky, The Easy Case for Products Liability Law: A Response to Professors Polinsky and Shavell, 123 HARV. L. REV. 1919, 1943 (2010).
56. Caterpillar Tractor Co. v. Beck, 593 P.2d 871, 879 (Alaska 1979) (footnotes omitted). The burden is placed on the manufacturer when the victims were powerless to protect themselves.
57. (quoting Roger J. Traynor, The Ways and Meanings of Defective Products and Strict Liability, 32 TENN. L. REV. 363, 366-67 (1965)).
58. "Where an injury is caused by a risk or a misuse of the product which was not reasonably foreseeable to the manufacturer and supplier, they are not liable." Smith ex rel. Smith v. Bryco Arms, 33 P.3d 638, 645 (N. M. Ct. App. 2001) (holding that the manufacturer was not liable for a company's unauthorized modifications to a handgun's design). Civil recourse theory's inordinate emphasis on the bilateral relationship between plaintiff and defendant does not explain why courts sometimes place the burden on the defendant manufacturer and sometimes on the injured plaintiff.
59. See generally Guido Calabresi & Jon T. Hirschoff, Towards a Test for Strict Liability in Torts, 81 YALE L. J. 1055 (1972) (explaining that courts consider factors such as the victim's knowledge of the risk and whether the plaintiff could have avoided the injury; that is, which party was in the best position to avoid the accident risk (was the least cost avoider/best decider), the manufacturer or the injured plaintiff). This question draws its answer from doctrines like assumption of risk and those defining product defect.
60. See generally THE COSTS OF ACCIDENTS, supra note 6 (developing theory that the sum of accident and safety costs may be minimized by placing liability on the "least cost avoider").
61. Cf. Show v. Ford Motor Co., 659 F.3d 584, 587 (7th Cir. 2011) ("This formulation of the risk-utility test is an 'integrated' test.... Under this formulation, consumer expectations are included within the scope of the broader risk-utility test. In addition, the test refines the consumer-expectation factor by specifically allowing for advertising and marketing messages to be used to assess consumer expectations"
62. (quoting Mikolajczyk v. Ford Motor Co., 901 N. E.2d 329, 352 (Ill. 2008))).
63. See RESTATEMENT (THIRD) OF TORTS: PRODUCT LIABILITY § 2 (b) (1998) (defining a product as "defective in design if the foreseeable risks of harm could have been reduced by a reasonable alternative design is based on the common-sense notion that liability for harm caused by product designs should attach only when harm is reasonably preventable").
64. Fred R. Shapiro, The Most-Cited Articles from the Yale Law Journal, 100 YALE L. J. 1449, 1501 (1991) (commentary by Guido Calabresi).
65. See, e.g., Castro v. QVC Network, Inc., 139 F.3d 114, 119 (2d Cir. 1998) (Calabresi, J.) (applying New York law and ruling that a jury should have been instructed on consumer expectations under warranty law in addition to the risk/utility instruction in strict products liability because a turkey pan with handles that were too small was widely advertised on television and created a consumer expectation: "The jury could have found that the roasting pan's overall utility for cooking low-volume foods outweighed the risk of injury when cooking heavier foods, but that the product was nonetheless unsafe for the purpose for which it was marketed and sold-roasting a twenty-five pound turkey-and, as such, was defective under the consumer expectations test. That being so, the appellants were entitled to a separate breach of warranty charge.").
66. Barker v. Lull Eng'g Co., 573 P.2d 443, 453 (Cal. 1978).
67. Caterpillar Tractor Co. v. Beck, 593 P.2d 871, 880 (Alaska 1979) (footnotes omitted).
68. RESTATEMENT (SECOND) OF TORTS § 402A (1965).
69. RESTATEMENT (THIRD) OF TORTS: PRODUCTS LIABILITY § 2 (b) (1998);
70. Caterpillar, 593 P.2d at 877 (footnotes omitted).
71. (quoting Clary v. Fifth Ave. Chrysler Ctr., Inc., 454 P.2d 244, 248 (Alaska 1969)).
72. Codling v. Paglia, 298 N. E.2d 622, 627-28 (N. Y. 1973).
73. "The problem with strict liability of products has been one of limitation. No one wants absolute liability where all the article has to do is to cause injury.... Strict liability imposes what amounts to constructive knowledge of the condition of the product." Phillips v. Kimwood Mach. Co., 525 P.2d 1033, 1036 (Or. 1974) (footnote omitted). Every products liability case requires the court to consider who had the better knowledge of a flaw and therefore was in the best position to avoid the product injury.
74. See generally Guido Calabresi & A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 HARV. L. REV. 1089 (1972).
75. Obituary, Leon Lipson, YALE BULL. & CALENDAR (Sept. 30-Oct. 7, 1996), http://www.yale. edu/opa/arc-ybc/ybc/v25.n6.obit.html.
76. See Stephen D. Sugarman, Doing Away with Tort Law, 73 CALIF. L. REV. 555, 632 (1985) ("The New Zealand Royal Commission first proposed a broad-based financing mechanism. It envisioned a flat levy on all employers of one-percent of wages and salaries because '[a]ll industrial activity is interdependent and there should be a general pooling of all the risks of accidents to workers.' As enacted, however, the legislation provided for both (1) 'classifications and rates of levy' that vary by occupation or industry, as well as (2) individual firm-level penalties and rebates. Both of these devices, at least in principle, could further Professor Calabresi's cost internalization goals." (footnotes omitted)).
77. Guido Calabresi, Torts-The Law of the Mixed Society, 56 TEX. L. REV. 519 (1978).
78. GUIDO CALABRESI & PHILIP BOBBITT, TRAGIC CHOICES (1978).
79. Conversely, the fury that followed the use of eminent domain in Kelo v. City of New London, 545 U. S. 469 (2005) might have been avoided if the collective price set for the takings had been at two or three times the supposed market price.
80. Lauer v. City of New York, 733 N. E.2d 184 (N. Y. 2000).
81. Palka v. Servicemaster Mgmt. Servs. Corp., 634 N. E.2d 189, 193 (N. Y. 1994) ("Courts traditionally and as part of the common-law process fix the duty point by balancing factors, including the reasonable expectations of parties and society generally, the proliferation of claims, the likelihood of unlimited or insurer-like liability, disproportionate risk and reparation allocation, and public policies affecting the expansion or limitation of new channels of liability.");
82. see also Hamilton v. Beretta U. S. A. Corp., 222 F.3d 36, 42 (2d Cir. 2000) ("New York's highest court expressly reserved a delicate balancing test for itself and for courts generally to apply, explaining that '[t]he common law of torts is, at its foundation, a means of apportioning risks and allocating the burden of loss', and that in addition to the moral and logical components of its analysis, a court must set the compass of a duty so that the social consequences of wrongs and exposure to liability are limited to a controllable degree"
83. (quoting Waters v. New York City Hous. Auth., 505 N. E.2d 922, 923 (N. Y. 1987))).
84. The Case of the Thorns, Y. B. 6 Edw. 4, fol. 7, Mich., pl. 18 (1466) (Eng.)
85. reprinted in C. H. S. FIFOOT, HISTORY AND SOURCES OF THE COMMON LAW: TORT AND CONTRACT 195, 196 (1949).
86. Scott v. Shepherd, (1773) 96 Eng. Rep. 525 (K. B.) (comparing trespass and actions on the case). In their evolution, the action of trespass remained as the remedy for intentional wrongs, and action on the case was extended to include injuries which were not intended but were merely negligently inflicted.
87. WILLIAM L. PROSSER, HANDBOOK OF THE LAW OF TORTS, § 7 (4th ed. 1971);
88. see also MORTON J. HORWITZ, THE TRANSFORMATION OF AMERICAN LAW, 1780-1860, at 89 (1977) ("Since the action for trespass was limited to direct injuries, so this argument goes, there could be no independent action for negligence until the strict liability-negligence distinction between trespass and case was obliterated.").
89. ARTHUR RIPSTEIN, EQUALITY, RESPONSIBILITY, AND THE LAW 114 (1999) (telling the tort story of Scott v. Shepherd).
90. For my view of this case and its significance to the relationship between economic and philosophical theories of torts, see Guido Calabresi, Toward a Unified Theory of Torts, J. TORT L., Oct. 2007, at 1, 3-8.
91. Lauer, 733 N. E.2d at 186-89 (ruling that the medical examiner, who learned of exonerating evidence that would have cleared the father, owed no duty to a father charged with homicide in the death of his infant son).
92. Desiano v. Warner-Lambert & Co., 467 F.3d 85 (2d Cir. 2006).
93. THE COSTS OF ACCIDENTS, supra note 6.
94. see also ALISON CLARKE & PAUL KOHLER, PROPERTY LAW: COMMENTARY AND MATERIALS 226 (2005) ("Finally, by other justice considerations, Calabresi and Melamed are referring to criteria that have neither an economic or distributional rational but are based on notions of fairness and morality such as making those who cause the nuisance liable even where this achieves no distributional preference and is not economically efficient.").
95. See Benjamin C. Zipursky, A Theory of Punitive Damages, 84 TEX. L. REV. 105, 107 (2005) ("[PJunitive damages law within state tort law today is not entirely about the plaintiffs right to be punitive; it is also about the need to punish a defendant whose conduct requires deterrence and retribution, according to the state.");
96. see also Benjamin C. Zipursky, Substantive Standing, Civil Recourse, and Corrective Justice, 39 FLA. ST. U. L. REV. 299, 300-01 (2011) ("[C]ivil recourse theory is fundamentally distinct both from corrective justice theories and from vengeance-based theories.").
97. See, e.g., Barbara A. Black, The Constitution of Empire: The Case for the Colonists, 124 U. PA. L. REV. 1157 (1976);
98. Barbara Aronstein Black, Massachusetts and the Judges: Judicial Independence in Perspective, 3 LAW & HIST. REV. 101 (1985).
99. HENRY CONSERVA, NATIONAL SLOGANS FROM AROUND THE WORLD 51 (2006) (emphasis in original).
100. See generally Robert Badinter, Preface-Moving Towards Universal Abolition of the Death Penalty, in THE DEATH PENALTY: BEYOND ABOLITION 7, 7-11 (2004) (describing the use of the death penalty in America despite strong abolition efforts worldwide).
101. See Thomas B. Colby, Beyond the Multiple Punishment Problem: Punitive Damages as Punishment for Individual, Private Wrongs, 87 MINN. L. REV. 583, 637-38 (2003);
102. cf Clarence Morris, Punitive Damages in Tort Cases, 44 HARV. L. REV. 1173, 1198 (1931) (describing punitive damages as the functional equivalent of an "orderly, legal retaliation... to be preferred to a private vengeance which will disturb the peace of the community").
103. See, e.g., Philip Morris USA v. Williams, 549 U. S. 346, 352-55 (2007) (explaining retribution rationale for punitive damages in reversing punitive damages based in part on harming nonparties);
104. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U. S. 408, 416-18 (2003) (reversing $145 million in punitive damages where compensatory damages comprised only $1 million).
105. See generally The Complexity of Torts, supra note 6 (criticizing the U. S. Supreme Court's reductionism in reducing punitive damages' multiple functions to one thing: retributory punishment).
106. See Mathias v. Accor Econ. Lodging, Inc., 347 F.3d 672, 677 (7th Cir. 2003) (upholding a $186, 000 punitive damages award where there were only $5, 000 in compensatory damages based upon economic considerations such as the net worth of the defendant and defendant's ability to pay).
107. See Ciraolo v. City of New York, 216 F.3d 236, 244-45 (2d Cir. 2000) (Calabresi, J., concurring) ("Many years ago, in an influential article that was in part responsible for his receipt of the Nobel Memorial Prize in economics, Professor Becker pointed out that charging a thief the cost of what he had stolen would not adequately deter theft unless the thief was caught every time. Since thieves will not always be caught, they must be penalized by more than the cost of the items stolen on the occasions on which they are caught. This 'multiplier' is essential to render theft unprofitable and properly to deter it.... More recently, scholars have recognized that punitive damages can serve the same function in tort law.... Although widely accepted by economists and acknowledged by some courts, the multiplier function of punitive damages has nonetheless been applied haphazardly at best. One reason this is so is that the twin goals of deterrence and retribution are often conflated, rather than recognized as analytically distinct objectives.
108. "In Finland, for example, as in other Scandinavian countries, the fines for speeding are imposed based on a person's earnings and net wealth...." KATHERINE VAN WORMER & FRED H. BESTHORN, HUMAN BEHAVIOR AND THE SOCIAL ENVIRONMENT, MACRO LEVEL: GROUPS, COMMUNITIES, AND ORGANIZATIONS 178 (2d ed. 2011).